<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1998
REGISTRATION NO. 333-65371
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
<TABLE>
<S> <C> <C>
MEDIAONE GROUP, INC. DELAWARE 84-0926774
MEDIAONE GROUP FUNDING, INC. DELAWARE 84-1028672
MEDIAONE FINANCE TRUST III DELAWARE APPLIED FOR
MEDIAONE FINANCE TRUST IV DELAWARE APPLIED FOR
MEDIAONE FINANCE TRUST V DELAWARE APPLIED FOR
MEDIAONE FINANCE TRUST VI DELAWARE APPLIED FOR
(Exact name of Registrant as (State or other Jurisdiction (I.R.S. Employer
of
Specified in its Charter) Incorporation or Organization) Identification Number)
</TABLE>
188 INVERNESS DRIVE WEST
ENGLEWOOD, COLORADO 80112
(303) 858-3000
(Name, address, including zip code, and telephone number, including
area code, of each registrant's principal executive offices)
--------------------------
STEPHEN E. BRILZ, ESQ. Please send copies of all
MEDIAONE GROUP, INC. communications to:
5613 DTC PARKWAY AKIKO MIKUMO, ESQ.
ENGLEWOOD, COLORADO 80155 WEIL, GOTSHAL & MANGES LLP
(303) 858-3511 767 FIFTH AVENUE
(Name, address, including zip code, NEW YORK, NEW YORK 10153
and telephone (212) 310-8000
number of agent for service for each
registrant)
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT, AS
DETERMINED BY MARKET CONDITIONS.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / / _________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE CANNOT
SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL
THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 15, 1998
PROSPECTUS
$700,000,000
<TABLE>
<S> <C>
MEDIAONE GROUP MEDIAONE FINANCE TRUST III
FUNDING, INC. MEDIAONE FINANCE TRUST IV
SUBORDINATED NOTES FULLY AND MEDIAONE FINANCE TRUST V
UNCONDITIONALLY GUARANTEED AS TO MEDIAONE FINANCE TRUST VI
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
AND INTEREST BY MEDIAONE GROUP, INC. GUARANTEED, BASED ON SEVERAL OBLIGATIONS, BY
MEDIAONE GROUP, INC.
</TABLE>
- --------------------------------------------------------------------------------
THE TRUSTS
MediaOne Finance Trust III, MediaOne Finance Trust IV, MediaOne Finance Trust V
and MediaOne Finance Trust VI are Delaware business trusts. Each trust will
- - sell preferred securities (representing undivided beneficial interests in the
trust) to the public.
- - sell common securities (representing undivided beneficial interests in the
trust) to MediaOne Group.
- - use the proceeds from these sales to buy an equal amount of subordinated notes
of MediaOne Group Funding, Inc., a subsidiary of MediaOne Group.
- - distribute the cash payments it receives on the subordinated notes it owns to
the holders of the preferred and common securities.
MEDIAONE GROUP FUNDING
- - will pay principal, premium (if any) and interest on its subordinated notes,
subject to payment on its more senior debt.
- - may choose to distribute the subordinated notes pro rata to the preferred and
common security holders.
MEDIAONE GROUP
- - will fully and unconditionally guarantee the payment by each trust of the
preferred securities based on several obligations described in this
prospectus.
- - will fully and unconditionally guarantee the subordinated notes on a
subordinated basis.
WE URGE YOU TO READ THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT,
WHICH WILL DESCRIBE THE SPECIFIC TERMS OF THE PREFERRED SECURITIES, THE
SUBORDINATED NOTES AND THE NOTE GUARANTEE, CAREFULLY BEFORE YOU MAKE YOUR
INVESTMENT DECISION.
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
THIS PROSPECTUS MAY NOT BE USED TO SELL SECURITIES UNLESS ACCOMPANIED BY A
PROSPECTUS SUPPLEMENT.
The date of this prospectus is , 1998
<PAGE>
WHERE YOU CAN FIND
MORE INFORMATION
MediaOne Group files reports, proxy statements, and other information with the
Securities and Exchange Commission ("SEC"). Such reports, proxy statements, and
other information concerning MediaOne Group can be read and copied at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Room. The SEC maintains an internet site at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
issuers that file electronically with the SEC, including MediaOne Group.
MediaOne Group's Common Stock is listed and traded on the New York Stock
Exchange ("NYSE") and the Pacific Stock Exchange ("PSE"). These reports, proxy
statements and other information are also available for inspection at the
offices of the NYSE, 20 Broad Street, New York, New York 10005 and at the
offices of PSE, 115 Sansome Street, 2nd Floor, San Francisco, California 94104.
This prospectus is part of a registration statement filed with the SEC by
MediaOne Group, MediaOne Group Funding and the trusts. The full registration
statement can be obtained from the SEC as indicated above, or from MediaOne
Group.
The SEC allows MediaOne Group to "incorporate by reference" the information it
files with the SEC. This permits MediaOne Group to disclose important
information to you by referencing these filed documents. Any information
referenced this way is considered part of this prospectus, and any information
filed with the SEC subsequent to this prospectus will automatically be deemed to
update and supersede this information. MediaOne Group incorporates by reference
the following documents which have been filed with the SEC:
- - Annual Report on Form 10-K for the year ended December 31, 1997, as amended by
Form 10-K/A filed April 13, 1998;
- - Current Reports on Form 8-K dated January 29, 1998, February 17, 1998, March
25, 1998 (as amended by Form 8-K/A filed April 13, 1998), April 17, 1998, May
5, 1998, June 18, 1998, June 24, 1998, July 29, 1998 and July 30, 1998;
- - Proxy Statement on Schedule 14A filed with the Commission on April 20, 1998;
and
- - Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998.
All reports filed on or prior to June 12, 1998 were filed by MediaOne Group
under the name of U S WEST, Inc.
MediaOne Group incorporates by reference the documents listed above and any
future filings made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act of 1934 (the "Exchange Act") until the trusts sell all of
the preferred securities.
MediaOne Group will provide without charge upon written or oral request, a copy
of any or all of the documents which are incorporated by reference to this
prospectus, other than exhibits which are specifically incorporated by reference
into such documents. Requests should be directed to Investor Relations, MediaOne
Group, Inc., 188 Inverness Drive West, Englewood, Colorado 80112 (telephone
number (303) 858-3677).
There are no separate financial statements of MediaOne Group Funding or the
trusts in this prospectus. MediaOne Group does
2
<PAGE>
not believe such financial statements would be helpful because:
- - MediaOne Group Funding and the trusts are direct or indirect wholly-owned
subsidiaries of MediaOne Group, which files consolidated financial information
under the Exchange Act.
- - MediaOne Group Funding does not have any independent operations other than
issuing debt securities guaranteed by MediaOne Group.
- - The trusts do not have any independent operations other than issuing the
preferred and common securities and purchasing the subordinated notes.
- - The obligations of MediaOne Group Funding under the subordinated notes are
fully and unconditionally guaranteed by MediaOne Group and the obligations of
MediaOne Group under the Preferred Securities Guarantees, the Declarations,
the note guarantees and the Indenture (each as defined herein) have the effect
of providing a full, irrevocable and unconditional guarantee of the trusts'
obligations under their preferred securities. See "Description of the
Subordinated Notes and the Note Guarantees," "Description of the Preferred
Securities Guarantees" and "Relationship Among the Preferred Securities, the
Preferred Securities Guarantee, the Subordinated Notes and the Note Guarantee
Held by Each Trust."
MEDIAONE GROUP, INC.
MediaOne Group is a diversified global media and broadband communications
company. MediaOne Group has operations and investments in two principal areas:
(1) domestic broadband communications and (2) international broadband and
wireless communications. MediaOne Group is the third largest cable television
system operator in the United States with large clusters in Atlanta, Georgia,
Eastern Massachusetts, Southern California, Southern Florida, Detroit, Michigan
and Minneapolis/St. Paul, Minnesota. As of June 30, 1998, MediaOne Group's
domestic cable television systems passed approximately 8.4 million homes and
provided services to approximately 5.0 million basic cable subscribers. MediaOne
Group also owns an approximately 25% capital interest in Time Warner
Entertainment Company, L.P., which provides cable programming, filmed
entertainment and broadband communications services and is the second largest
cable television system operator in the United States. Outside of the United
States, MediaOne Group owns interests in various providers of broadband and
wireless communications services in markets in continental Europe, the United
Kingdom and Asia, including an approximately 22% interest in Telewest
Communications plc, the second largest provider of combined cable and
telecommunications services in the United Kingdom, and a 50% interest in One 2
One, a provider of personal communications services in the United Kingdom.
THE SEPARATION
Prior to June 12, 1998, MediaOne Group
was known as "U S WEST, Inc." ("Old U S WEST"). On June 12, 1998, Old U S WEST
separated its businesses into two independent companies (the "Separation").
Until the Separation, Old U S WEST conducted its businesses through two groups:
the U S WEST Communications Group (the "Communications Group") and the U S WEST
Media Group (the "Media Group"). In the Separation, the Communications Group and
the domestic directories business of the Media Group were combined to form a new
corporation ("New U S WEST"). The shares of New
3
<PAGE>
U S WEST were issued to the shareholders of Old U S WEST. New U S WEST has
changed its name to "U S WEST, Inc." The rest of Old U S WEST, consisting of the
remainder of the Media Group, was re-named "MediaOne Group, Inc."
THE AIRTOUCH TRANSACTION
On April 6, 1998, MediaOne Group sold its domestic wireless business to AirTouch
Communications, Inc. (the "AirTouch Transaction"). In the AirTouch Transaction,
MediaOne Group received from AirTouch (after closing adjustments):
- - 59,313,621 shares of AirTouch common stock; and
- - two classes of AirTouch preferred stock having an aggregate liquidation
preference of $1.65 billion.
In addition, AirTouch assumed $1.35 billion of indebtedness of MediaOne Group's
domestic wireless business. Prior to the AirTouch Transaction, MediaOne Group
and AirTouch were parties to a joint venture pursuant to which the parties had
agreed to combine their domestic wireless businesses. The AirTouch Transaction
was consummated instead of such joint venture.
In August 1998, MediaOne Group issued approximately $1.7 billion principal
amount of 6 1/4% exchangeable notes due August 15, 2001. The exchangeable notes
are mandatorily exchangeable into a number of shares of AirTouch common stock
(or at MediaOne Group's option, the cash equivalent of such stock) according to
an exchange rate formula based on the then market price of AirTouch common
stock. Under the terms of the exchangeable notes, the holders of the
exchangeable notes could receive up to a maximum of 29,900,000 shares of
AirTouch common stock at maturity.
MEDIAONE GROUP FUNDING, INC.
MediaOne Group Funding is a wholly owned subsidiary of MediaOne Group. MediaOne
Group Funding has no independent operations. MediaOne Group Funding's sole
purpose is to provide financing to MediaOne Group and its affiliates through the
issuance of indebtedness guaranteed by MediaOne Group.
THE TRUSTS
MediaOne Group created four Delaware business trusts pursuant to four
Declarations of Trust executed by MediaOne Group as sponsor for each trust and
five appointed trustees for each trust. The trusts are named MediaOne Finance
Trust III, MediaOne Finance Trust IV, MediaOne Finance Trust V and MediaOne
Finance Trust VI. MediaOne Group will file an Amended and Restated Declaration
of Trust (a "Declaration") for each trust, which will state the terms and
conditions for each trust to issue and sell its preferred securities and common
securities. A form of Declaration is filed as an exhibit to the registration
statement of which this prospectus forms a part.
Each trust will exist solely to:
- - issue and sell its preferred and common securities;
- - use the proceeds from the sale of its preferred and common securities to
purchase a series of MediaOne Group Funding's subordinated notes;
- - maintain its status as a grantor trust for federal income tax purposes; and
- - engage in other activities that are necessary or incidental to these purposes.
MediaOne Group will purchase all of the common securities of each trust. The
common securities will represent an aggregate liquidation amount equal to at
least 3% of each trust's total capitalization. The preferred securities will
represent the remaining 97% of such trust's total
4
<PAGE>
capitalization. The common securities will have terms substantially identical
to, and will rank equal in priority of payment with, the preferred securities.
However, if MediaOne Group Funding defaults on the related subordinated notes,
then cash distributions and liquidation, redemption and other amounts payable on
the common securities will be subordinate to the preferred securities in
priority of payment.
The preferred securities will be guaranteed by MediaOne Group as described later
in this prospectus.
MediaOne Group has appointed five trustees to conduct each trust's business and
affairs:
- - The First National Bank of Chicago ("Property Trustee")
- - An affiliate of The First National Bank of Chicago ("Delaware Trustee")
- - Three MediaOne Group officers ("Regular Trustees")
Only MediaOne Group, as owner of the common securities, can remove or replace
the trustees. In addition, MediaOne Group can increase or decrease the number of
trustees. However, the majority of trustees will always be Regular Trustees.
MediaOne Group Funding will pay all fees and expenses related to each trust and
each offering of the related preferred securities and will pay all ongoing costs
and expenses of each trust, except such trust's obligations under the related
preferred and common securities. MediaOne Group will fully and unconditionally
guarantee the payment of such fees and expenses.
The trusts will not have separate financial statements. The statements would not
be material to holders of the preferred securities because no trust will have
any independent operations. Each trust exists solely for the reasons summarized
above.
USE OF PROCEEDS
The proceeds of the sale of the common and preferred securities issued by each
trust will be invested by such trust in the related series of subordinated notes
of MediaOne Group Funding. MediaOne Group Funding will loan the proceeds from
the issuance of the subordinated notes to MediaOne Group and its affiliates to
be used for general corporate purposes, including working capital, acquisitions,
the refinancing of short-term and long-term borrowings and other business
opportunities.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed charges
and preferred stock dividends for MediaOne Group based on the historical results
of MediaOne Group, which have been restated to reflect the Separation of Old U S
WEST into MediaOne Group and New U S WEST for the periods indicated. For the
purpose of calculating this ratio, earnings consist of income from continuing
operations before income taxes and fixed charges. Fixed charges include interest
on indebtedness and the portion of rentals representative of the interest
factor.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
-- 1.67 -- -- -- -- 9.45
</TABLE>
Earnings for the year ended December 31, 1993, 1995, 1996 and 1997 were
insufficient to cover fixed charges and preferred stock dividends by $217
million, $64 million, $421 million and $629 million, respectively, and for the
six months ended June 30, 1997 by $349 million. Earnings for the six months
ended June 30, 1998 include a $3,869 million gain from the sale of domestic
wireless operations. Without the gain, earnings were insufficient to cover fixed
charges and preferred stock dividends by $414 million.
5
<PAGE>
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the preferred securities, the subordinated
notes, the note guarantee and the preferred securities guarantee relating to
each trust. Such securities will be identical with respect to each trust except
as otherwise described in the prospectus supplement for such securities. These
summaries are not meant to be a complete description of each security. However,
this prospectus and the accompanying prospectus supplement contain the material
terms and conditions for each security. For more information please refer to (1)
the Declaration for each trust, (2) the indenture (the "Indenture") among
MediaOne Group, MediaOne Group Funding and Norwest Bank Minnesota, N.A., as
trustee ("Debenture Trustee"), as supplemented by a supplemental indenture (a
"Supplemental Indenture") relating to issuance of each series of subordinated
notes and the related note guarantee, and (3) MediaOne Group's guarantee of the
preferred securities issued by each trust (the "Preferred Securities
Guarantees"). Forms of these documents are filed as exhibits to the registration
statement, which includes this prospectus. Capitalized terms used in this
prospectus that are not defined will have the meanings given them in these
documents.
DESCRIPTION OF THE
PREFERRED SECURITIES
GENERAL
Each Declaration authorizes the Regular Trustees to issue on behalf of each
trust one series of preferred securities which will have the terms described in
a prospectus supplement. The proceeds from the sale of a trust's preferred and
common securities will be used by such trust to purchase a series of
subordinated notes issued by MediaOne Group Funding and a note guarantee issued
by MediaOne Group. The subordinated notes and note guarantee will be held in
trust by the Property Trustee for the benefit of the holders of such preferred
and common securities.
Under each Preferred Securities Guarantee, MediaOne Group will agree to make
payments of distributions and payments on redemption or liquidation with respect
to a trust's preferred securities, but only to the extent such trust has funds
available to make those payments and has not made such payments. See
"Description of the Preferred Securities Guarantees."
The assets of a trust available for distribution to the holders of its preferred
securities will be limited to payments from MediaOne Group Funding under the
series of subordinated notes held by such trust and from MediaOne Group under
the related note guarantee. If MediaOne Group Funding fails to make a payment on
such subordinated notes and MediaOne Group fails to make a payment under such
note guarantee, such trust will not have sufficient funds to make related
payments, including distributions, on its preferred securities.
Each Preferred Securities Guarantee, when taken together with MediaOne Group
Funding's obligations under the related series of subordinated notes and the
Indenture and MediaOne Group's obligations under the related note guarantee, the
Indenture and the related Declaration, will provide a full and unconditional
guarantee of amounts due on the preferred securities issued by a trust.
Each Declaration will be qualified as an indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). Each Property Trustee will act
as indenture trustee for the preferred securities to be issued by the applicable
trust, in order
6
<PAGE>
to comply with the provisions of the Trust Indenture Act.
Each series of preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as described in the
relevant Declaration or made part of such Declaration by the Trust Indenture Act
or the Delaware Business Trust Act. The terms of such preferred securities will
mirror the terms of the subordinated notes held by the trust.
The prospectus supplement relating to the preferred securities of a trust will
describe the specific terms of such preferred securities, including:
- - the name of such preferred securities;
- - the dollar amount and number of securities issued;
- - the annual distribution rate(s) (or method of determining such rate(s)), the
payment date(s) and the record dates used to determine the holders who are to
receive distributions;
- - the date from which distributions shall be cumulative;
- - the optional redemption provisions, if any, including the prices, time periods
and other terms and conditions for which such preferred securities shall be
purchased or redeemed, in whole or in part;
- - the terms and conditions, if any, upon which the applicable series of
subordinated notes and the related note guarantee may be distributed to
holders of such preferred securities;
- - any securities exchange on which such preferred securities will be listed;
- - whether such preferred securities are to be issued in book-entry form and
represented by one or more global certificates, and if so, the depository for
such global certificates and the specific terms of the depositary
arrangements; and
- - any other relevant rights, preferences, privileges, limitations or
restrictions of such preferred securities.
Each prospectus supplement will describe certain United States federal income
tax considerations applicable to the purchase, holding and disposition of the
series of preferred securities covered by such prospectus supplement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Each Declaration states that the related trust shall be dissolved:
- - on the expiration of the term of such trust;
- - upon the bankruptcy of MediaOne Group or MediaOne Group Funding;
- - upon the filing of a certificate of dissolution or its equivalent with respect
to MediaOne Group or MediaOne Group Funding;
- - upon the filing of a certificate of cancellation with respect to such trust
after obtaining the consent of at least a majority in liquidation amount of
the preferred and common securities of such trust, voting together as a single
class;
- - 90 days after the revocation of the charter of MediaOne Group or MediaOne
Group Funding (but only if the charter is not reinstated during that 90-day
period);
- - upon the distribution of the related subordinated notes and note guarantee
directly to the holders of the preferred and common securities of such trust;
- - upon the redemption of all of the common and preferred securities of such
trust; or
7
<PAGE>
- - upon entry of a court order for the dissolution of MediaOne Group, MediaOne
Group Funding or such trust.
In the event of a dissolution, after the trust pays all amounts owed to
creditors, the holders of the preferred and common securities will be entitled
to receive:
- - cash equal to the aggregate liquidation amount of each preferred and common
security specified in an accompanying prospectus supplement, plus accumulated
and unpaid distributions to the date of payment; unless
- - subordinated notes in an aggregate principal amount equal to the aggregate
liquidation amount of the preferred and common securities are distributed to
the holders of the preferred and common securities.
If such trust cannot pay the full amount due on its preferred and common
securities because insufficient assets are available for payment, then the
amounts payable by the trust on its preferred and common securities shall be
paid pro rata. However, if an event of default under the related Declaration has
occurred, the total amounts due on such preferred securities will be paid before
any distribution on such common securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture relating to a series of subordinated
notes and the related note guarantee is an event of default under the
Declaration of the trust that owns these subordinated notes and note guarantee
(a "Declaration Event of Default"). See "Description of the Subordinated Notes
and the Note Guarantees--Events of Default Under the Indenture."
MediaOne Group and the Regular Trustees of a trust must file annually with the
Property Trustee for such trust a certificate stating whether or not they are in
compliance with all the applicable conditions and covenants under the related
Declaration.
Upon the occurrence of a Declaration Event of Default, the Property Trustee of
the applicable trust, as the sole holder of the subordinated notes held by such
trust, will have the right under the Indenture to declare the principal of,
premium, if any, and interest on such subordinated notes to be immediately due
and payable.
If a Property Trustee fails to enforce its rights under the related Declaration
or the Indenture to the fullest extent permitted by law and subject to the terms
of such Declaration and the Indenture, any holder of the preferred securities
issued by the related trust may sue MediaOne Group or MediaOne Group Funding, or
seek other remedies, to enforce the Property Trustee's rights under the
Declaration or the Indenture without first instituting a legal proceeding
against such Property Trustee or any other person.
If MediaOne Group Funding fails to pay principal, premium, if any, or interest
on a series of subordinated notes and MediaOne Group fails to make payments on
the related note guarantee, in either case when payable, then a holder of such
preferred securities may directly sue MediaOne Group Funding or MediaOne Group
or seek other remedies, to collect its pro rata share of payments owned.
REMOVAL AND REPLACEMENT OF TRUSTEES
Only the holder of a trust's common securities has the right to remove or
replace the trustees of such trust. The resignation or removal of any trustee
and the appointment of a successor trustee shall be effective only on the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration for such trust.
8
<PAGE>
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS OF THE TRUSTS
A trust may not consolidate, amalgamate, merge with or into, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to any other corporation or other body ("Merger Event"), except as
described below. A trust may, with the consent of a majority of its Regular
Trustees and without the consent of the holders of its preferred and common
securities, consolidate, amalgamate, merge with or into, or be replaced by
another trust, provided that:
- - the successor entity either
(1) assumes all of the obligations of the trust relating to its preferred
and common securities or
(2) substitutes for such trust's preferred and common securities other
securities substantially similar to such preferred and common securities
("successor securities"), so long as the successor securities rank the
same as such preferred and common securities for distributions and
payments upon liquidation, redemption and otherwise;
- - MediaOne Group Funding acknowledges a trustee of such successor entity who has
the same powers and duties as the Property Trustee of such trust as the holder
of the particular series of subordinated notes and MediaOne Group expressly
acknowledges such trustee as the holder of the related note guarantee;
- - the preferred securities are listed, or any successor securities will be
listed upon notice of issuance, on the same national securities exchange or
other organization that the preferred securities are then listed;
- - the Merger Event does not cause its preferred securities or successor
securities to be downgraded by any national rating agency;
- - the Merger Event does not adversely affect the rights, preferences and
privileges of the holders of its preferred and common securities or successor
securities in any material way (other than with respect to any dilution of the
holders' interest in the new entity);
- - the successor entity has a purpose identical to that of the trust;
- - prior to the Merger Event, MediaOne Group has received an opinion of counsel
from a nationally recognized law firm stating that
(1) such Merger Event does not adversely affect the rights of the holders of
the trust's preferred securities or any successor securities in any
material way (other than with respect to any dilution of the holders'
interest in the new entity) and
(2) following the Merger Event, neither the trust nor the successor entity
will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company
Act"); and
- - MediaOne Group guarantees the obligations of the successor entity under the
successor securities in the same manner as in the applicable Preferred
Securities Guarantee and the guarantee of the common securities for such
trust.
In addition, unless all of the holders of the preferred and common securities
approve otherwise, a trust shall not consolidate, amalgamate, merge with or
into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate,
9
<PAGE>
merge with or into, or replace it, if such transaction would cause the trust or
the successor entity to be classified other than as a grantor trust for United
States federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF DECLARATIONS
The holders of preferred securities have no voting rights except as discussed
under "--Mergers, Consolidations, Amalgamations or Replacements of the Trust"
and "Description of the Preferred Securities Guarantees--Amendments and
Assignment," and as otherwise required by law and the Declaration for such
trust.
A Declaration may be amended if approved by a majority of the Regular Trustees
of the applicable trust. However, if any proposed amendment provides for, or
such Regular Trustees otherwise propose to effect,
(1) any action that would adversely affect the powers, preferences or special
rights of the trust's preferred and common securities, whether by way of
amendment to such Declaration or otherwise or
(2) the dissolution, winding-up or termination of such trust other than pursuant
to the terms of its Declaration,
then the holders of the trust's preferred and common securities as a single
class will be entitled to vote on such amendment or proposal. In that case, the
amendment or proposal will only be effective if approved by at least a majority
in liquidation amount of the preferred and common securities affected by such
amendment or proposal.
If any amendment or proposal referred to in clause (1) above would adversely
affect only the preferred securities or the common securities of a trust, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal will only be effective with the approval of at
least a majority in liquidation amount of such affected class.
No amendment may be made to a Declaration if such amendment would:
- - cause the related trust to be characterized as other than a grantor trust for
United States federal income tax purposes;
- - reduce or otherwise adversely affect the powers of the Property Trustee; or
- - cause the related trust to be deemed to be an "investment company" which is
required to be registered under the Investment Company Act.
The holders of a majority in aggregate liquidation amount of the preferred
securities of each trust have the right to:
- - direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee of the trust; or
- - direct the exercise of any trust or power conferred upon such Property Trustee
under that trust's Declaration, including the right to direct the Property
Trustee, as the holder of a series of subordinated notes and a note guarantee,
to
(1) exercise the remedies available under the Indenture with respect to such
subordinated notes and note guarantee,
(2) waive any event of default under the Indenture that is waivable or
(3) cancel an acceleration of the principal of the subordinated notes.
However, if the Indenture requires the consent of the holders of more than a
majority in aggregate principal amount of a series of subordinated notes (a
"super-
10
<PAGE>
majority"), then the Property Trustee for such series must get approval of the
holders of a super-majority in liquidation amount of such series of preferred
securities.
In addition, before taking any of the foregoing actions, the Property Trustee
must obtain an opinion of counsel stating that, as a result of such action, the
trust will continue to be classified as a grantor trust for United States
federal income tax purposes.
The Property Trustee of a trust will notify all preferred securities holders of
such trust of any notice received from the Debenture Trustee with respect to the
subordinated notes and note guarantee held by such trust.
As described in each Declaration, the Property Trustee may hold a meeting to
have preferred securities holders vote on a change or have them approve the
change by written consent.
If a vote of preferred securities holders is taken or a consent is obtained, any
preferred securities that are owned by MediaOne Group or any of its affiliates
will, for purposes of the vote or consent, be treated as if they were not
outstanding. This means
(1) MediaOne Group and any of its affiliates will not be able to vote on or
consent to matters requiring the vote or consent of holders of preferred
securities and
(2) any preferred securities owned by MediaOne Group or any of its affiliates
will not be counted in determining whether the required percentage of votes
or consents has been obtained.
INFORMATION CONCERNING THE PROPERTY TRUSTEES
For matters relating to compliance with the Trust Indenture Act, the Property
Trustee of each trust will have all of the duties and responsibilities of an
indenture trustee under the Trust Indenture Act. Each Property Trustee, other
than during the occurrence and continuance of a Declaration Event of Default
under the applicable trust, undertakes to perform only such duties as are
specifically set forth in the applicable Declaration and, upon a Declaration
Event of Default, must use the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, a Property Trustee is under no obligation to exercise any of the
powers given it by the applicable Declaration at the request of any holder of
preferred securities unless it is offered reasonable security or indemnity
against the costs, expenses and liabilities that it might incur. However, the
holders of the preferred securities will not be required to offer such an
indemnity where the holders, by exercising their voting rights, direct the
Property Trustee to take any action following a Declaration Event of Default.
MediaOne Group and certain of its affiliates maintain a deposit account and
banking relationship with The First National Bank of Chicago. The First National
Bank of Chicago serves as trustee under other indentures pursuant to which
unsecured debt securities of MediaOne Group and its affiliates are outstanding.
MISCELLANEOUS
The Regular Trustees of each trust are authorized and directed to conduct the
affairs of and to operate such trust in such a way that
- - it will not be deemed to be an "investment company" required to be registered
under the Investment Company Act;
11
<PAGE>
- - it will be classified as a grantor trust for United States federal income tax
purposes; and
- - the subordinated notes held by it will be treated as indebtedness of MediaOne
Group Funding for United States federal income tax purposes.
MediaOne Group Funding and the Regular Trustees of a trust are authorized to
take any action (so long as it is consistent with applicable law or the
applicable certificate of trust or Declaration) that MediaOne Group Funding and
the Regular Trustees of such trust determine to be necessary or desirable for
such purposes.
Holders of preferred securities have no preemptive or similar rights.
A trust may not borrow money, issue debt, execute mortgages or pledge any of its
assets.
GOVERNING LAW
Each Declaration and the related preferred securities will be governed by and
construed in accordance with the laws of the State of Delaware.
DESCRIPTION OF THE SUBORDINATED NOTES AND THE NOTE GUARANTEES
GENERAL
MediaOne Group Funding plans to sell one series of subordinated notes to each
trust pursuant to this prospectus. MediaOne Group will fully and unconditionally
guarantee each series of subordinated notes under a note guarantee.
Below is a description of certain general terms of the subordinated notes and
note guarantees. The particular terms of a series of subordinated notes and the
related note guarantee will be described in a prospectus supplement.
MediaOne Group Funding will issue the subordinated notes under a Supplemental
Indenture. The Indenture will be qualified under the Trust Indenture Act. The
Indenture and form of Supplemental Indenture is filed as an exhibit to the
registration statement to which this prospectus forms a part.
Each series of subordinated notes will be unsecured and will be subordinate and
junior in priority of payment to certain of MediaOne Group Funding's other
indebtedness to the extent described in a prospectus supplement. MediaOne Group
will fully and unconditionally guarantee the payment of principal, premium, if
any, and interest on each series of subordinated notes under the related note
guarantee. The note guarantees will be unsecured and will be subordinate and
junior in priority of payment to certain of MediaOne Group's other indebtedness
to the extent described in a prospectus supplement. The Indenture does not limit
the amount of subordinated notes which MediaOne Group Funding may issue, nor
does it limit MediaOne Group Funding from issuing any other secured or unsecured
debt.
Each prospectus supplement will describe the following terms relating to a
series of subordinated notes:
- - the title;
- - any limit on the amount that may be issued;
- - whether or not such series of subordinated notes will be issued in global
form, the terms and who the depository will be;
- - the maturity date(s);
- - the annual interest rate(s) (which may be fixed or variable) or the method for
12
<PAGE>
determining the rate(s) and the date(s) interest will begin to accrue, the
date(s) interest will be payable and the regular record dates for interest
payment dates or the method for determining such date(s);
- - the place(s) where payments shall be payable;
- - MediaOne Group Funding's right, if any, to defer payment of interest and the
maximum length of any such deferral period;
- - the date, if any, after which, and the price(s) at which, such series of
subordinated notes may, pursuant to any optional redemption provisions, be
redeemed at MediaOne Group Funding's option, and other related terms and
provisions;
- - the date(s), if any, on which, and the price(s) at which MediaOne Group
Funding is obligated, pursuant to any mandatory sinking fund provisions or
otherwise, to redeem, or at the Holder's option to purchase, such series of
subordinated notes and other related terms and provisions;
- - the denominations in which such series of subordinated notes will be issued,
if other than denominations of $25 and any integral multiple thereof; and
- - any other terms (which terms shall not be inconsistent with the Indenture).
CONSOLIDATION, MERGER OR SALE
The Indenture does not contain any covenant which restricts the ability of
MediaOne Group or MediaOne Group Funding to merge or consolidate, or sell,
convey, transfer or otherwise dispose of all or substantially all of their
assets. However, any successor or acquiror of such assets must assume all of the
obligations of MediaOne Group or MediaOne Group Funding under the Indenture, the
subordinated notes or the note guarantees, as appropriate.
EVENTS OF DEFAULT UNDER THE INDENTURE
The following are events of default under the Indenture with respect to any
series of subordinated notes issued:
- - failure to pay interest when due and such failure continues for 90 days and
the time for payment has not been extended or deferred;
- - failure to pay the principal (or premium, if any) when due;
- - failure to observe or perform any other covenant contained in the subordinated
notes or the Indenture (other than a covenant specifically relating to another
series of subordinated notes), and such failure continues for 90 days after
MediaOne Group Funding receives notice from the Debenture Trustee or holders
of at least 25% in aggregate principal amount of the outstanding subordinated
notes of that series;
- - certain events of bankruptcy, insolvency or reorganization of MediaOne Group
or MediaOne Group Funding; and
- - the voluntary or involuntary dissolution, winding up or termination of the
trust that owns the series of subordinated notes, except in connection with
(1) the distribution of such subordinated notes to holders of preferred and
common securities of such trust,
(2) the redemption of all of the preferred and common securities of such
trust or
(3) mergers, consolidations or amalgamations permitted by the Declaration of
such trust.
13
<PAGE>
If an event of default with respect to subordinated notes of any series occurs
and is continuing, the Debenture Trustee or the holders of at least 25% in
aggregate principal amount of the outstanding subordinated notes of that series,
by notice in writing to MediaOne Group Funding (and to the Debenture Trustee if
notice is given by such holders), may declare the unpaid principal of, premium,
if any, and accrued interest, if any, due and payable immediately.
The holders of a majority in principal amount of the outstanding subordinated
notes of an affected series (or if such subordinated notes are held by a trust,
the holders of at least a majority in aggregate liquidation amount of the
trust's preferred securities) may waive any default or event of default with
respect to such series and its consequences, except defaults or events of
default regarding:
- - payment of principal, premium, if any, or interest; or
- - certain covenants containing limitations on MediaOne Group's and MediaOne
Group Funding's ability to pay dividends and make payments on subordinated
debt securities in certain circumstances.
Any such waiver shall cure such default or event of default.
If the subordinated notes of any series are held by a trust, and a Declaration
Event of Default has occurred and is attributable to the failure of MediaOne
Group Funding or MediaOne Group to pay principal, premium, if any, or interest
on, such subordinated notes, then each holder of the preferred securities of
such trust may sue MediaOne Group or MediaOne Group Funding, or seek other
remedies, to force payment to such holder of the principal of, premium, if any,
or interest on, such subordinated notes having a principal amount equal to the
aggregate liquidation amount of the preferred securities held by such holder.
Subject to the terms of the Indenture, if an event of default under the
Indenture shall occur and be continuing, the Debenture Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of the applicable series of
subordinated notes, unless such holders have offered the Debenture Trustee
reasonable indemnity. The holders of a majority in principal amount of the
outstanding subordinated notes of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the
Debenture Trustee, with respect to the subordinated notes of that series,
provided that:
- - it is not in conflict with any law or the Indenture;
- - the Debenture Trustee may take any other action deemed proper by it which is
not inconsistent with such direction; and
- - subject to its duties under the Trust Indenture Act, the Debenture Trustee
need not take any action that might involve it in personal liability or might
be unduly prejudicial to the holders not involved in the proceeding.
A holder of the subordinated notes of any series will only have the right to
institute a proceeding under the Indenture or to appoint a receiver or trustee,
or to seek other remedies if:
- - the holder has given written notice to the Debenture Trustee of a continuing
event of default with respect to that series;
- - the holders of at least 25% in aggregate principal amount of the outstanding
subordinated notes of that series have made written request, and such holders
14
<PAGE>
have offered reasonable indemnity to the Debenture Trustee to institute such
proceedings as trustee; and
- - the Debenture Trustee does not institute such proceeding, and does not receive
from the holders of a majority in aggregate principal amount of the
outstanding subordinated notes of that series other conflicting directions
within 60 days after such notice, request and offer.
These limitations do not apply to a suit instituted by a holder of subordinated
notes if MediaOne Group Funding defaults in the payment of the principal,
premium, if any, or interest on, the subordinated notes and MediaOne Group
defaults in its payment obligations on the note guarantee.
MediaOne Group Funding and MediaOne Group will periodically file statements with
the Debenture Trustee regarding its compliance with certain of the covenants in
the Indenture.
MODIFICATION OF INDENTURE; WAIVER
MediaOne Group, MediaOne Group Funding and the Debenture Trustee may change the
Indenture without the consent of any holders with respect to certain matters,
including:
- - to fix any ambiguity, defect or inconsistency in the Indenture; and
- - to change anything that does not materially adversely affect the interests of
any holder of subordinated notes of any series.
In addition, under the Indenture, the rights of holders of a series of
subordinated notes may be changed by MediaOne Group Funding, MediaOne Group and
the Debenture Trustee with the written consent of the holders of at least a
majority in aggregate principal amount of the outstanding subordinated notes of
each series that is affected. However, the following changes may only be made
with the consent of each holder of any outstanding subordinated notes affected:
- - extending the fixed maturity of such series of subordinated notes;
- - reducing the principal amount, reducing the rate of or extending the time of
payment of interest, or any premium payable upon the redemption of any such
subordinated notes; or
- - reducing the percentage of subordinated notes, the holders of which are
required to consent to any amendment.
If the consent of the Property Trustee of a trust as holder of subordinated
notes is required to consent to any amendment, modification or termination of
the Indenture, the Property Trustee will request directions from the holders of
the preferred securities of the applicable trust.
FORM, EXCHANGE, AND TRANSFER
The subordinated notes of each series will be issuable only in fully registered
form without coupons and, unless otherwise specified in the applicable
prospectus supplement, in denominations of $25 and any integral multiple
thereof.
At the option of the holder, subject to the terms of the Indenture and the
limitations applicable to global securities described in the applicable
prospectus supplement, subordinated notes of any series will be exchangeable for
other subordinated notes of the same series, in any authorized denomination and
of like tenor and aggregate principal amount.
Subject to the terms of the Indenture and the limitations applicable to global
securities set forth in the applicable prospectus supplement, subordinated notes
may be presented for exchange or for registration of transfer (duly endorsed or
with the form of
15
<PAGE>
transfer endorsed thereon duly executed if so required by MediaOne Group Funding
or the Debenture Trustee) at the office of the Security Registrar or at the
office of any transfer agent designated by MediaOne Group Funding for such
purpose. Unless otherwise provided in the subordinated notes to be transferred
or exchanged, no service charge will be made for any registration of transfer or
exchange, but MediaOne Group Funding may require payment of any taxes or other
governmental charges. MediaOne Group Funding has appointed the Debenture Trustee
as Security Registrar. Any transfer agent (in addition to the Security
Registrar) initially designated by MediaOne Group Funding for any subordinated
notes will be named in the applicable prospectus supplement. MediaOne Group
Funding may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that MediaOne Group Funding will be
required to maintain a transfer agent in each place of payment for the
subordinated notes of each series.
If the subordinated notes of any series are to be redeemed, MediaOne Group
Funding will not be required to:
- - issue, register the transfer of, or exchange any subordinated notes of that
series during a period beginning at the opening of business 15 days before the
day of mailing of a notice of redemption of any such subordinated notes that
may be selected for redemption and ending at the close of business on the day
of such mailing; or
- - register the transfer of or exchange any subordinated notes so selected for
redemption, in whole or in part, except the unredeemed portion of any such
subordinated notes being redeemed in part.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of an
event of default under the Indenture, undertakes to perform only such duties as
are specifically set forth in the Indenture and, upon an event of default under
the Indenture, must use the same degree of care as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Debenture Trustee is under no obligation to exercise any of the
powers given it by the Indenture at the request of any holder of subordinated
notes unless it is offered reasonable security and indemnity against the costs,
expenses and liabilities that it might incur. The Debenture Trustee is not
required to spend or risk its own money or otherwise become financially liable
while performing its duties unless it reasonably believes that it will be repaid
or receive adequate indemnity.
MediaOne Group and its affiliates maintain a deposit account and banking
relationship with Norwest Bank Minnesota, N.A. Norwest Bank Minnesota, N.A.
serves as trustee under other indentures pursuant to which unsecured debt
securities of MediaOne Group and its affiliates are outstanding.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment of
the interest on any subordinated notes on any interest payment date will be made
to the person in whose name such subordinated notes (or one or more predecessor
securities) are registered at the close of business on the regular record date
for such interest.
Principal of and any premium and interest on the subordinated notes of a
particular series will be payable at the office of the
16
<PAGE>
paying agents designated by MediaOne Group Funding, except that unless otherwise
indicated in the applicable prospectus supplement, interest payments may be made
by check mailed to the holder. Unless otherwise indicated in such prospectus
supplement, the corporate trust office of the Debenture Trustee in The City of
New York will be designated as MediaOne Group Funding's sole paying agent for
payments with respect to subordinated notes of each series. Any other paying
agents initially designated by MediaOne Group Funding for the subordinated notes
of a particular series will be named in the applicable prospectus supplement.
MediaOne Group Funding will be required to maintain a paying agent in each place
of payment for the subordinated notes of a particular series.
All moneys paid by MediaOne Group Funding or MediaOne Group to a paying agent or
the Debenture Trustee for the payment of the principal of or any premium or
interest on any subordinated notes which remains unclaimed at the end of two
years after such principal, premium or interest has become due and payable will
be repaid to MediaOne Group Funding or MediaOne Group, as the case may be, and
the holder of the security thereafter may look only to MediaOne Group Funding or
MediaOne Group for payment thereof.
GOVERNING LAW
The Indenture, subordinated notes and note guarantees will be governed by and
construed in accordance with the laws of the State of New York except to the
extent that the Trust Indenture Act shall be applicable.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
GENERAL
MediaOne Group will execute a Preferred Securities Guarantee, which benefits the
holders of preferred securities, at the time that a trust issues those preferred
securities. Each Preferred Securities Guarantee will be qualified as an
indenture under the Trust Indenture Act. The First National Bank of Chicago will
act as indenture trustee ("Preferred Guarantee Trustee") under each Preferred
Securities Guarantee for the purposes of compliance with the Trust Indenture
Act. The Preferred Guarantee Trustee will hold each Preferred Securities
Guarantee for the benefit of the preferred securities holders of the applicable
trust.
MediaOne Group will irrevocably agree, as described in each Preferred Securities
Guarantee, to pay in full, to the holders of the preferred securities issued by
the applicable trust, the Preferred Securities Guarantee Payments (as defined
below) (except to the extent previously paid), when and as due, regardless of
any defense, right of set-off or counterclaim which such trust may have or
assert. The following payments, to the extent not paid by a trust ("Preferred
Securities Guarantee Payments"), will be covered by the applicable Preferred
Securities Guarantee:
- - any accrued and unpaid distributions required to be paid on the applicable
preferred securities, to the extent that the trust has funds available to make
the payment;
- - the redemption price, to the extent that the trust has funds available to make
the payment; and
- - upon a voluntary or involuntary dissolution and liquidation of the trust
(other than in connection with a distribution of subordinated notes and a note
guarantee to holders of such preferred securities or the redemption of all
such preferred securities), the lesser of
(1) the aggregate of the liquidation amount specified in the prospectus
supplement for each preferred
17
<PAGE>
security plus all accrued and unpaid distributions on the preferred
securities to the date of payment, to the extent the trust has funds
available to make the payment and
(2) the amount of assets of the trust remaining available for distribution
to holders of its preferred securities upon a dissolution and
liquidation of the trust ("Liquidation Payment").
MediaOne Group's obligation to make a Preferred Securities Guarantee Payment may
be satisfied by directly paying the required amounts to the holders of the
preferred securities or by causing the trust to pay the amounts to the holders.
No single document executed by MediaOne Group relating to the issuance of
preferred securities will provide for its full, irrevocable and unconditional
guarantee of the preferred securities. It is only the combined operation of
MediaOne Group's obligations under the Indenture and the applicable Preferred
Securities Guarantee, Declaration and note guarantee that has the effect of
providing a full, irrevocable and unconditional guarantee of a trust's
obligations under its preferred securities.
STATUS OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will constitute an unsecured obligation of
MediaOne Group and will rank:
- - subordinate and junior in right of payment to all of MediaOne Group's other
liabilities (except those obligations made equal or junior to its obligations
under a Preferred Securities Guarantee);
- - equal with the senior most preferred or preference stock now or hereafter
issued by MediaOne Group, and with any guarantee now or hereafter issued by it
in respect of any preferred or preference stock of any of its affiliates
(including MediaOne's guarantee of the outstanding preferred securities of
MediaOne Financing A, MediaOne Financing B, MediaOne Finance Trust I and
MediaOne Finance Trust II); and
- - senior to MediaOne Group's common stock.
Each Declaration will require that the holder of preferred securities accept the
subordination provisions and other terms of the Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee of payment and
not of collection (in other words the holder of the guaranteed security may sue
MediaOne Group, or seek other remedies, to enforce its rights under the
Preferred Securities Guarantee without first suing any other person or entity).
A Preferred Securities Guarantee will not be discharged except by payment of the
Preferred Securities Guarantee Payments in full to the extent not previously
paid or upon distribution to the applicable preferred securities holders of the
corresponding series of subordinated notes pursuant to the appropriate
Declaration.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights of
holders of a series of preferred securities in any material respect (in which
case no consent of such holders will be required), a Preferred Securities
Guarantee may only be amended with the prior approval of the holders of at least
a majority in aggregate liquidation amount of such preferred securities
(excluding any such preferred securities held by MediaOne Group or any of its
affiliates). A description of the way to obtain any approval is described under
"Description of the Preferred Securities--
18
<PAGE>
Voting Rights; Amendment of Trust Agreement." All guarantees and agreements
contained in a Preferred Securities Guarantee will be binding on MediaOne
Group's successors, assigns, receivers, trustees and representatives and are for
the benefit of the holders of the applicable preferred securities.
PREFERRED SECURITIES GUARANTEE EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee occurs if MediaOne
Group fails to make any of its required payments or perform its obligations
under such Preferred Securities Guarantee.
The holders of at least a majority in aggregate liquidation amount of the
preferred securities relating to each Preferred Securities Guarantee (excluding
any preferred securities held by MediaOne Group or any of its affiliates) will
have the right to direct the time, method and place of conducing any proceeding
for any remedy available to the Preferred Guarantee Trustee relating to such
Preferred Securities Guarantee or to direct the exercise of any trust or power
given to the Preferred Guarantee Trustee under such Preferred Securities
Guarantee.
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEES
The Preferred Guarantee Trustee under a Preferred Securities Guarantee, other
than during the occurrence and continuance of a default under such Preferred
Securities Guarantee, will only perform the duties that are specifically
described in such Preferred Securities Guarantee. After such a default, the
Preferred Guarantee Trustee will exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, a Preferred Guarantee Trustee is under no obligation
to exercise any of its powers as described in the applicable Preferred
Securities Guarantee at the request of any holder of covered preferred
securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that it might incur.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will terminate once the applicable preferred
securities are paid in full or upon distribution of the corresponding series of
subordinated notes to the holders of such preferred securities. Each Preferred
Securities Guarantee will continue to be effective or will be reinstated if at
any time any holder of preferred securities issued by the applicable trust must
restore payment of any sums paid under such preferred securities or such
Preferred Securities Guarantee.
GOVERNING LAW
The Preferred Securities Guarantees will be governed by and construed in
accordance with the laws of the State of New York.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE,
THE SUBORDINATED NOTES AND THE NOTE GUARANTEE HELD BY EACH TRUST
Payments of distributions and redemption and liquidation payments due on each
series of preferred securities (to the extent the applicable trust has funds
available for the payments) will be guaranteed by MediaOne Group to the extent
described under "Description of the Preferred Securities Guarantees." No single
document executed by MediaOne Group in connection with the
19
<PAGE>
issuance of any series of preferred securities will provide for its full,
irrevocable and unconditional guarantee of such preferred securities. It is only
the combined operation of MediaOne Group's obligations under the applicable
Preferred Securities Guarantee, Declaration and note guarantee and the Indenture
that has the effect of providing a full, irrevocable and unconditional guarantee
of a trust's obligations under its preferred securities.
As long as MediaOne Group Funding makes payments of interest and other payments
when due on the subordinated notes held by a trust or, if MediaOne Group Funding
defaults in making such payments, MediaOne Group makes payments when due under
the related note guarantee, such payments will be sufficient to cover the
payment of distributions and redemption and liquidation payments due on the
preferred securities issued by that trust, primarily because:
- - the aggregate principal amount of the subordinated notes will be equal to the
sum of the aggregate liquidation amount of the preferred and common
securities;
- - the interest rate and interest and other payment dates on the subordinated
notes will match the distribution rate and distribution and other payment
dates for the preferred securities;
- - MediaOne Group Funding shall pay for any and all costs, expenses and
liabilities of each trust except such trust's obligations under its preferred
securities (and MediaOne Group has agreed to guarantee such payment); and
- - each Declaration provides that the related trust will not engage in any
activity that is not consistent with the limited purposes of the trust.
If and to the extent that MediaOne Group Funding does not make payments on such
subordinated notes and MediaOne Group does not make payments on the related note
guarantee, such trust will not have funds available to make payments of
distributions or other amounts due on its preferred securities. In those
circumstances, you will not be able to rely upon the Preferred Securities
Guarantee for payment of these amounts. Instead, you may directly sue MediaOne
Group Funding or MediaOne Group or seek other remedies to collect your pro rata
share of payments owed. If you sue MediaOne Group Funding or MediaOne Group to
collect payment, then MediaOne Group Funding or MediaOne Group will assume your
rights as a holder of preferred securities under such trust's Declaration to the
extent MediaOne Group Funding or MediaOne Group makes a payment to you in any
such legal action.
A holder of any preferred security may sue MediaOne Group, or seek other
remedies, to enforce its rights under the applicable Preferred Securities
Guarantee without first suing the applicable Preferred Guarantee Trustee, the
trust which issued the preferred security or any other person or entity.
PLAN OF DISTRIBUTION
MediaOne Group Funding may sell the subordinated notes and a trust may sell its
preferred securities being offered hereby in one or more of the following ways
from time to time:
- - to underwriters for resale to the public or to institutional investors;
- - directly to institutional investors; or
- - through agents to the public or to institutional investors.
The prospectus supplements will set forth the terms of the offering of each
series of preferred securities, including the name or names of any underwriters
or agents, the purchase price of such preferred securities and the proceeds to
MediaOne Group
20
<PAGE>
Funding or the applicable trust, as the case may be, from such sale, any
underwriting discounts or agency fees and other item's constituting
underwriters' or agents' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such preferred securities may be listed.
If underwriters are used in the sale, the preferred securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
Unless otherwise set forth in a prospectus supplement, the obligations of the
underwriters to purchase any series of preferred securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of such series of preferred securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
MediaOne Group, MediaOne Group Funding and/or a trust to indemnification by
MediaOne Group, MediaOne Group Funding and/or such trust against certain civil
liabilities, including liabilities under the Securities Act of 1933, or to
contribution with respect to payments which the underwriters or agents may be
required to make in respect thereof. Underwriters and agents may be customers
of, engage in transactions with, or perform services for MediaOne Group and its
affiliates in the ordinary course of business.
Each series of preferred securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom preferred
securities are sold by MediaOne Group Funding or by the trusts for public
offering and sale may make a market in the preferred securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. The preferred securities may or may not be
listed on a national securities exchange.
LEGAL OPINIONS
Certain matters of Delaware law relating to the validity of the preferred
securities will be passed on for each trust by Morris, Nichols, Arsht & Tunnell,
Wilmington, Delaware, special Delaware counsel to the trusts. The validity of
the subordinated notes, the Preferred Securities Guarantees, the note guarantees
and certain matters relating thereto will be passed on for MediaOne Group and
MediaOne Group Funding by Weil, Gotshal & Manges LLP, New York, New York and for
the underwriters by Skadden, Arps, Meagher & Flom LLP, New York, New York.
Certain matters will be passed upon for MediaOne Group and MediaOne Group
Funding by Stephen E. Brilz, Corporate Counsel and Assistant Secretary of
MediaOne Group.
EXPERTS
Arthur Andersen LLP, independent public accountants, audited Old U S WEST's and
MediaOne Group's financial statements and schedules for the years ended December
31, 1996 and 1997, as indicated in their reports. PricewaterhouseCoopers LLP,
independent public accountants, audited Old U S WEST's and MediaOne Group's
financial statements and related schedules for the year ended December 31, 1995,
as indicated in their reports. All such documents are incorporated by reference
in this prospectus and elsewhere in the registration statement in reliance on
the reports of Arthur Andersen LLP and PricewaterhouseCoopers LLP and upon the
authority of Arthur Andersen LLP and PricewaterhouseCoopers LLP as experts in
accounting and auditing.
21
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee..................... $ 206,500
Rating Agency Fees................................................ 10,000*
Blue Sky Fees and Expenses........................................ 20,000*
Trustees' Expenses................................................ 30,000*
Printing and Engraving Fees....................................... 60,000*
Accounting Fees and Expenses...................................... 25,000*
Legal Fees and Expenses........................................... 100,000*
Miscellaneous..................................................... 8,500*
---------
Total 460,000*
---------
---------
</TABLE>
- ------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (DGCL) permits the Board
of Directors of each of MediaOne Group and MediaOne Group Funding to indemnify
any person against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with any threatened, pending or completed action, suit or proceeding in which
such person is made a party by reason of his being or having been a director,
officer, employee or agent of MediaOne Group or MediaOne Group Funding, as the
case may be, in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the Securities
Act). The statute provides that indemnification pursuant to its provisions is
not exclusive of other rights of indemnification to which a person may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise.
The Certificate of Incorporation and Bylaws of each of MediaOne Group and
MediaOne Group Funding provides for indemnification of its directors and
officers to the fullest extent permitted by law.
As permitted by Section 102 of the DGCL, the Certificate of Incorporation of
each of MediaOne Group and MediaOne Group Funding eliminates a person's
liability to MediaOne Group or MediaOne Group Funding, as the case may be, or
its stockholders for monetary damages for breach of fiduciary duty as a
director, including without limitation, for serving on a committee of the Board
of Directors of MediaOne Group or MediaOne Group Funding; provided, however,
that the foregoing does not eliminate or limit liability (i) for any breach of
the director's duty of loyalty to MediaOne Group or MediaOne Group Funding or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the DGCL or (iv) for any transaction from which the director derived an improper
personal benefit.
The Declaration of each trust provides that no Regular Trustee, affiliate of
any Regular Trustee, or any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Regular Trustee, or any
employee or agent of such trust or its affiliates (each an Indemnified Person)
shall be liable, responsible or accountable in damages or otherwise to such
trust or any employee or agent of the trust or its affiliates for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of such trust and in a manner
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by such Declaration or by law,
except that an Indemnified Person shall be liable for
II-1
<PAGE>
any such loss, damage or claim incurred by reason of such Indemnified Person's
gross negligence or willful misconduct with respect to such acts or omission.
The Declaration of each trust also provides that to the fullest extent
permitted by applicable law, MediaOne Group shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted by
such Indemnified Person in good faith on behalf of such trust and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by such Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of gross
negligence or willful misconduct with respect to such act or omissions. The
Declaration of each trust further provides that, to the fullest extent permitted
by applicable law, expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by MediaOne Group prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by of an undertaking
by or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified for the
underlying cause of action as authorized by such Declaration.
The directors and officers of MediaOne Group, MediaOne Group Funding and the
Regular Trustees of each trust are covered by insurance policies indemnifying
against certain liabilities, including certain liabilities arising under the
Securities Act, which might be incurred by them in such capacities and against
which they cannot be indemnified by MediaOne Group, MediaOne Group Funding and
the trusts.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
3-A -- Certificate of Trust of MediaOne Finance Trust III.
<S> <C> <C>
3-B -- Certificate of Trust of MediaOne Finance Trust IV.
3-C -- Certificate of Trust of MediaOne Finance Trust V.
3-D -- Certificate of Trust of MediaOne Finance Trust VI.
4-A -- Declaration of Trust of MediaOne Finance Trust III.
4-B -- Declaration of Trust of MediaOne Finance Trust IV.
4-C -- Declaration of Trust of MediaOne Finance Trust V.
4-D -- Declaration of Trust of MediaOne Finance Trust VI.
4-E -- Form of Amended and Restated Declaration of Trust.
4-F -- Indenture dated June 12, 1998 among MediaOne Group Funding, Inc., MediaOne
Group, Inc. and Norwest Bank Minnesota, National Association, as Trustee.
4-G -- Form of Supplemental Indenture to be used in connection with the issuance of
the subordinated notes.
4-H -- Form of Preferred Security (included in Exhibit 4-E).
4-I -- Form of subordinated notes and note guarantee (included in Exhibit 4-G).
4-J -- Form of Preferred Securities Guarantee.
5-A -- Opinion of Morris, Nichols, Arsht & Tunnell.
5-B -- Opinion of Weil, Gotshal & Manges LLP.
12-A -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends.*
23-A -- Consent of Arthur Andersen LLP.*
23-B -- Consent of PricewaterhouseCoopers LLP.*
23-C -- Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5-A).
23-D -- Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5-B).
24-A -- Powers of Attorney.*
25-A -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of Norwest Bank Minnesota, National Association, as Trustee under the
Indenture.
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C> <C>
25-B -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Property Trustee under the
Declaration of Trust of MediaOne Finance Trust III.*
25-C -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Property Trustee under the
Declaration of Trust of MediaOne Finance Trust IV.*
25-D -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Property Trustee under the
Declaration of Trust of MediaOne Finance Trust V.*
25-E -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Property Trustee under the
Declaration of Trust of MediaOne Finance Trust VI.*
25-F -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under the Preferred
Securities Guarantee for MediaOne Finance Trust III, MediaOne Finance Trust IV,
MediaOne Finance Trust V and MediaOne Finance Trust VI.*
</TABLE>
- ------------------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
The Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrants pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (the Exchange Act) that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities Act,
each filing of a Registrant's Annual Report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions referred to in Item 15 (other than the
insurance policies referred to therein), or otherwise, the Registrants have been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the respective Registrant of
expenses incurred or paid by a director, officer or controlling person of such
Registrant in the successful defense of any action, suit or proceeding) is
asserted against such Registrant by such director, officer or controlling person
in connection with the securities being registered, such Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MediaOne Group,
Inc. certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Englewood, State of Colorado, on the 15th day of
October, 1998.
<TABLE>
<S> <C> <C>
MEDIAONE GROUP, INC.
By: /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz
ASSISTANT SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
Charles M. Lillis* President and Chief
Executive Officer
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER:
Richard A. Post* Executive Vice President
and Chief Financial
Officer
DIRECTORS:
Kathleen A. Cote*
Robert L. Crandall*
Grant A. Dove*
Allan D. Gilmour*
Pierson M. Grieve*
Charles M. Lillis*
Charles P. Russ, III*
Louis A. Simpson*
John "Jack" Slevin*
Daniel W. Yohannes*
</TABLE>
<TABLE>
<S> <C>
*By /s/ STEPHEN E. BRILZ
---------------------------------
Stephen E. Brilz
ASSISTANT SECRETARY
</TABLE>
Dated: October 15, 1998
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MediaOne Group
Funding, Inc. certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Englewood, State of Colorado, on the
15th day of October, 1998.
<TABLE>
<S> <C> <C>
MEDIAONE GROUP FUNDING, INC.
By: /s/ STEPHEN E. BRILZ
---------------------------------
Stephen E. Brilz
SECRETARY
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
Constance P. Campbell* President
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER
Rahn K. Porter* Vice President and Chief
Financial Officer
DIRECTORS:
Constance P. Campbell*
</TABLE>
<TABLE>
<S> <C>
*By /s/ STEPHEN E. BRILZ
---------------------------------
Stephen E. Brilz
SECRETARY
</TABLE>
Dated: October 15, 1998
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MediaOne Finance
Trust III certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Englewood, State of Colorado, on the
15th day of October, 1998.
<TABLE>
<S> <C> <C>
MEDIAONE FINANCE TRUST III
By /s/ CONSTANCE P. CAMPBELL
-----------------------------------------
Constance P. Campbell, Trustee
By /s/ RAHN K. PORTER
-----------------------------------------
Rahn K. Porter, Trustee
By /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz, Trustee
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MediaOne Finance
Trust IV certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Englewood, State of Colorado, on the
15th day of October, 1998.
<TABLE>
<S> <C> <C>
MEDIAONE FINANCE TRUST IV
By /s/ CONSTANCE P. CAMPBELL
-----------------------------------------
Constance P. Campbell, Trustee
By /s/ RAHN K. PORTER
-----------------------------------------
Rahn K. Porter, Trustee
By /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz, Trustee
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MediaOne Finance
Trust V certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Englewood, State of Colorado, on the
15th day of October, 1998.
<TABLE>
<S> <C> <C>
MEDIAONE FINANCE TRUST V
By /s/ CONSTANCE P. CAMPBELL
-----------------------------------------
Constance P. Campbell, Trustee
By /s/ RAHN K. PORTER
-----------------------------------------
Rahn K. Porter, Trustee
By /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz, Trustee
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MediaOne Finance
Trust VI certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Englewood, State of Colorado, on the
15th day of October, 1998.
<TABLE>
<S> <C> <C>
MEDIAONE FINANCE TRUST VI
By /s/ CONSTANCE P. CAMPBELL
-----------------------------------------
Constance P. Campbell, Trustee
By /s/ RAHN K. PORTER
-----------------------------------------
Rahn K. Porter, Trustee
By /s/ STEPHEN E. BRILZ
-----------------------------------------
Stephen E. Brilz, Trustee
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------- ---------
<S> <C> <C> <C>
3-A -- Certificate of Trust of MediaOne Finance Trust III.
3-B -- Certificate of Trust of MediaOne Finance Trust IV.
3-C -- Certificate of Trust of MediaOne Finance Trust V.
3-D -- Certificate of Trust of MediaOne Finance Trust VI.
4-A -- Declaration of Trust of MediaOne Finance Trust III.
4-B -- Declaration of Trust of MediaOne Finance Trust IV.
4-C -- Declaration of Trust of MediaOne Finance Trust V.
4-D -- Declaration of Trust of MediaOne Finance Trust VI.
4-E -- Form of Amended and Restated Declaration of Trust.
4-F -- Indenture dated June 12, 1998 among MediaOne Group Funding, Inc., MediaOne Group, Inc. and
Norwest Bank Minnesota, National Association, as Trustee.
4-G -- Form of Supplemental Indenture to be used in connection with the issuance of the
subordinated notes.
4-H -- Form of Preferred Security (included in Exhibit 4-E).
4-I -- Form of subordinated notes and note guarantee (included in Exhibit 4-G).
4-J -- Form of Preferred Securities Guarantee.
5-A -- Opinion of Morris, Nichols, Arsht & Tunnell.
5-B -- Opinion of Weil, Gotshal & Manges LLP.
12-A -- Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends.*
23-A -- Consent of Arthur Andersen LLP.*
23-B -- Consent of PricewaterhouseCoopers LLP.*
23-C -- Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5-A).
23-D -- Consent of Weil, Gotshal & Manges LLP (included in Exhibit 5-B).
24-A -- Powers of Attorney.*
25-A -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
Norwest Bank Minnesota, National Association, as Trustee under the Indenture.
25-B -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
The First National Bank of Chicago, as Property Trustee under the Declaration of Trust of
MediaOne Finance Trust III.*
25-C -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
The First National Bank of Chicago, as Property Trustee under the Declaration of Trust of
MediaOne Finance Trust IV.*
25-D -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
The First National Bank of Chicago, as Property Trustee under the Declaration of Trust of
MediaOne Finance Trust V.*
25-E -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
The First National Bank of Chicago, as Property Trustee under the Declaration of Trust of
MediaOne Finance Trust VI.*
25-F -- Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, as amended, of
The First National Bank of Chicago, as Trustee under the Preferred Securities Guarantee for
MediaOne Finance Trust III, MediaOne Finance Trust IV, MediaOne Finance Trust V and
MediaOne Finance Trust VI.*
</TABLE>
- ------------------------
* Previously filed.
<PAGE>
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST III
This Certificate of Trust of MediaOne Finance Trust III (the
"Trust"), dated October 5, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust III.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
------------------------------
Name: Steven M. Wagner
Title: Vice President
2
<PAGE>
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST IV
This Certificate of Trust of MediaOne Finance Trust IV (the
"Trust"), dated October 5, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust IV.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
-------------------------------
Name: Steven M. Wagner
Title: Vice President
2
<PAGE>
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST V
This Certificate of Trust of MediaOne Finance Trust V (the "Trust"),
dated October 5, 1998, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act
(12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust V.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
-------------------------------
Name: Steven M. Wagner
Title: Vice President
2
<PAGE>
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST VI
This Certificate of Trust of MediaOne Finance Trust VI (the
"Trust"), dated October 5, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust VI.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Stephen M. Wagner
-------------------------------
Name: Stephen M. Wagner
Title: Vice President
2
<PAGE>
DECLARATION OF TRUST
OF
MEDIAONE FINANCE TRUST III
October 5, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of
October 5, 1998 by the undersigned trustees (together with all other Persons
(as defined herein) from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"), the
Parent (as defined herein) as trust sponsor (the "Sponsor"), and by the
holders, from time to time, of undivided beneficial interests in the Trust
(as defined herein) to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act (as defined herein)
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures (as defined herein) of the Debenture
Issuer (as defined herein) and the Debenture Guarantees (as defined herein)
of the Parent endorsed thereon; and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Delaware Business Trust Act
and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of
the securities representing undivided beneficial interests issued hereunder,
subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified; and
<PAGE>
(e) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"COMMON SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"COVERED PERSON" means any employee or agent of the Trust or its
Affiliates.
"DEBENTURE GUARANTEE" means the guarantee by the Parent of the
Debentures to be issued by the Debenture Issuer.
"DEBENTURE ISSUER" means MediaOne Group Funding, Inc., a
Delaware corporation.
"DEBENTURES" means the series of Debentures to be issued by the
Debenture Issuer.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended
from time to time.
"DELAWARE TRUSTEE" has the meaning set forth in Section 3.1.
"INDEMNIFIED PERSON" means any Trustee, any Affiliate of any
Trustee or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee or any employee or agent
of the Trust or its Affiliates.
"PARENT" means, MediaOne Group, Inc., a Delaware corporation.
"PERSON" means any individual, joint venture, partnership,
corporation, association, joint stock company, limited liability company,
trust, unincorporated organization or other entity.
"PREFERRED SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"REGULAR TRUSTEE" means any Trustee other than the Delaware
Trustee.
"SECURITIES" means the Common Securities and the Preferred
Securities.
2
<PAGE>
"SPONSOR" means the Parent in its capacity as Sponsor of the
Trust.
"TRUSTEE" or "TRUSTEES" means each Person who has signed the
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and servicing as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME.
The Trust created by this Declaration is named "MediaOne Finance
Trust III." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 OFFICE.
The address of the principal office of the Trust is 188
Inverness Drive West, Englewood, Colorado 80112. At any time, the Regular
Trustees may designate another principal office.
SECTION 2.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures and the Debenture Guarantees endorsed thereon, and (b) except as
otherwise limited herein, to engage in only those other activities necessary
or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments or, other than as permitted
herein, pledge any of its assets.
SECTION 2.4 AUTHORITY.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust.
In dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Regular Trustees as set forth
in this Declaration.
SECTION 2.5 TITLE TO PROPERTY OF THE TRUST.
Legal title to all assets of the Trust shall be vested in the
Trust.
3
<PAGE>
SECTION 2.6 POWERS OF THE TRUSTEES.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell Preferred Securities and Common Securities in
accordance with this Declaration and, in connection with such
issue and sale, to cause the Trust to file with the Securities
and Exchange Commission a registration statement on Form S-3 in
relation to the Preferred Securities, including any amendments
thereto; provided, however, that the Trust may issue no more
than one series of Preferred Securities and no more than one
series of Common Securities;
(b) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable
compensation for such services;
(c) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Declaration;
(d) execute and enter into a Dealer Manager Agreement or
Underwriting Agreement in connection with the issuance of
Preferred Securities; and
(e) execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
SECTION 2.7 FILING OF CERTIFICATE OF TRUST.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 DURATION OF TRUST.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for 55 years from the date hereof.
ARTICLE III
TRUSTEES
SECTION 3.1 TRUSTEES.
The number of Trustees shall initially be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any
4
<PAGE>
time; PROVIDED, HOWEVER, that the number of Trustees shall in no event be
less than four (4); and PROVIDED FURTHER that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of Delaware
or which, if not a natural person, has its principal place of business in the
State of Delaware (the "Delaware Trustee"). Except as expressly set forth in
this Declaration, any power of the Regular Trustees may be exercised by, or
with the consent of, a majority of the Regular Trustees.
The initial Regular Trustees shall be:
Constance P. Campbell
188 Inverness Drive West
Englewood, Colorado 80112
Stephen E. Brilz
5613 DTC Parkway
Englewood, Colorado 80155
Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 3.2 DELAWARE TRUSTEE
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the responsibilities described in this
Declaration of the Regular Trustees. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Delaware Business Trust Act.
SECTION 3.3 EXECUTION OF DOCUMENTS
(a) Any two Regular Trustees are authorized to execute on
behalf of the Trust the Registration Statement referred to in Section 2.6(a)
and any amendments thereto and any other documents that the Regular Trustees
have the power and authority to execute pursuant to Section 2.6; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing the Registration Statement referred
to in Section 2.6(a) and any amendment thereto or making any other
governmental filing.
5
<PAGE>
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
holders of the Securities which shall be made solely
from assets of the Trust; and
(ii) the Sponsor shall not be required to pay to the Trust or
to any holder of Securities any deficit upon dissolution
or otherwise
(b) the Sponsor shall be liable for all debts and obligations of the
Trust (other than with respect to the Securities) to the extent
not satisfied out of the Trust's assets.
SECTION 4.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions; and
(b) an Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which distributions to holders of Securities might
properly be paid.
SECTION 4.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered
Person for its good faith reliance on the provisions of this Declaration. The
6
<PAGE>
provisions of this Declaration, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that
are, fair and reasonable to the Trust or any holder of
Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires,
including its own interests, and shall have no duty or
obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 4.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be
7
<PAGE>
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct with
respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 4.4(a).
SECTION 4.5 OUTSIDE BUSINESSES.
Any Covered Person and the Delaware Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person or the Delaware Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person and the Delaware Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 AMENDMENTS.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided no amendment may alter or affect
the Delaware Trustee's rights or duties hereunder without the Delaware
Trustee's prior written consent.
SECTION 5.2 TERMINATION OF TRUST.
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Debenture
Issuer or the revocation of the Sponsor or the Debenture
Issuer's charter or of the Trust's certificate of trust;
8
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, the Debenture Issuer or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event referred
to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.6 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed
a single signature page.
9
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
- -----------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
- -----------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
- -----------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
--------------------------
Name: Steven M. Wagner
Title: Vice President
MediaOne Group, Inc.
As Sponsor
By: /s/ Stephen E. Brilz
--------------------------
Name: Stephen E. Brilz
Title: Assistant Secretary
10
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST III
This Certificate of Trust of MediaOne Finance Trust III (the
"Trust"), dated October ___, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust III.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
1
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
----------------------------------
Stephen E. Brilz
As Trustee
----------------------------------
Rahn K. Porter
As Trustee
----------------------------------
First Chicago Delaware Inc.
As Trustee
By:
-------------------------------
Name:
Title:
2
<PAGE>
DECLARATION OF TRUST
OF
MEDIAONE FINANCE TRUST IV
October 5, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of
October 5, 1998 by the undersigned trustees (together with all other Persons
(as defined herein) from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"), the
Parent (as defined herein) as trust sponsor (the "Sponsor"), and by the
holders, from time to time, of undivided beneficial interests in the Trust
(as defined herein) to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act (as defined herein)
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures (as defined herein) of the Debenture
Issuer (as defined herein) and the Debenture Guarantees (as defined herein)
of the Parent endorsed thereon; and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Delaware Business Trust Act
and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of
the securities representing undivided beneficial interests issued hereunder,
subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified; and
<PAGE>
(e) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"COMMON SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"COVERED PERSON" means any employee or agent of the Trust or its
Affiliates.
"DEBENTURE GUARANTEE" means the guarantee by the Parent of the
Debentures to be issued by the Debenture Issuer.
"DEBENTURE ISSUER" means MediaOne Group Funding, Inc., a
Delaware corporation.
"DEBENTURES" means the series of Debentures to be issued by the
Debenture Issuer.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended
from time to time.
"DELAWARE TRUSTEE" has the meaning set forth in Section 3.1.
"INDEMNIFIED PERSON" means any Trustee, any Affiliate of any
Trustee or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee or any employee or agent
of the Trust or its Affiliates.
"PARENT" means, MediaOne Group, Inc., a Delaware corporation.
"PERSON" means any individual, joint venture, partnership,
corporation, association, joint stock company, limited liability company,
trust, unincorporated organization or other entity.
"PREFERRED SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"REGULAR TRUSTEE" means any Trustee other than the Delaware
Trustee.
"SECURITIES" means the Common Securities and the Preferred
Securities.
2
<PAGE>
"SPONSOR" means the Parent in its capacity as Sponsor of the
Trust.
"TRUSTEE" or "TRUSTEES" means each Person who has signed the
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and servicing as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME.
The Trust created by this Declaration is named "MediaOne Finance
Trust IV." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 OFFICE.
The address of the principal office of the Trust is 188
Inverness Drive West, Englewood, Colorado 80112. At any time, the Regular
Trustees may designate another principal office.
SECTION 2.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures and the Debenture Guarantees endorsed thereon, and (b) except as
otherwise limited herein, to engage in only those other activities necessary
or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments or, other than as permitted
herein, pledge any of its assets.
SECTION 2.4 AUTHORITY.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust.
In dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Regular Trustees as set forth
in this Declaration.
SECTION 2.5 TITLE TO PROPERTY OF THE TRUST.
Legal title to all assets of the Trust shall be vested in the
Trust.
3
<PAGE>
SECTION 2.6 POWERS OF THE TRUSTEES.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell Preferred Securities and Common Securities in
accordance with this Declaration and, in connection with such
issue and sale, to cause the Trust to file with the Securities
and Exchange Commission a registration statement on Form S-3 in
relation to the Preferred Securities, including any amendments
thereto; provided, however, that the Trust may issue no more
than one series of Preferred Securities and no more than one
series of Common Securities;
(b) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable
compensation for such services;
(c) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Declaration;
(d) execute and enter into a Dealer Manager Agreement or
Underwriting Agreement in connection with the issuance of
Preferred Securities; and
(e) execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
SECTION 2.7 FILING OF CERTIFICATE OF TRUST.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 DURATION OF TRUST.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for 55 years from the date hereof.
ARTICLE III
TRUSTEES
SECTION 3.1 TRUSTEES.
The number of Trustees shall initially be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any
4
<PAGE>
time; PROVIDED, HOWEVER, that the number of Trustees shall in no event be
less than four (4); and PROVIDED FURTHER that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of Delaware
or which, if not a natural person, has its principal place of business in the
State of Delaware (the "Delaware Trustee"). Except as expressly set forth in
this Declaration, any power of the Regular Trustees may be exercised by, or
with the consent of, a majority of the Regular Trustees.
The initial Regular Trustees shall be:
Constance P. Campbell
188 Inverness Drive West
Englewood, Colorado 80112
Stephen E. Brilz
5613 DTC Parkway
Englewood, Colorado 80155
Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 3.2 DELAWARE TRUSTEE
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the responsibilities described in this
Declaration of the Regular Trustees. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Delaware Business Trust Act.
SECTION 3.3 EXECUTION OF DOCUMENTS
(a) Any two Regular Trustees are authorized to execute on
behalf of the Trust the Registration Statement referred to in Section 2.6(a)
and any amendments thereto and any other documents that the Regular Trustees
have the power and authority to execute pursuant to Section 2.6; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing the Registration Statement referred
to in Section 2.6(a) and any amendment thereto or making any other
governmental filing.
5
<PAGE>
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
holders of the Securities which shall be made solely
from assets of the Trust; and
(ii) the Sponsor shall not be required to pay to the Trust or
to any holder of Securities any deficit upon dissolution
or otherwise
(b) the Sponsor shall be liable for all debts and obligations of the
Trust (other than with respect to the Securities) to the extent
not satisfied out of the Trust's assets.
SECTION 4.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions; and
(b) an Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which distributions to holders of Securities might
properly be paid.
SECTION 4.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The
6
<PAGE>
provisions of this Declaration, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires,
including its own interests, and shall have no duty or
obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 4.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be
7
<PAGE>
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct with
respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 4.4(a).
SECTION 4.5 OUTSIDE BUSINESSES.
Any Covered Person and the Delaware Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person or the Delaware Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person and the Delaware Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 AMENDMENTS.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided no amendment may alter or affect
the Delaware Trustee's rights or duties hereunder without the Delaware
Trustee's prior written consent.
SECTION 5.2 TERMINATION OF TRUST.
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Debenture
Issuer or the revocation of the Sponsor or the Debenture
Issuer's charter or of the Trust's certificate of trust;
8
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, the Debenture Issuer or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
SECTION 5.3 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.6 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed
a single signature page.
9
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
- ----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
- ----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
- ----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
-------------------------------
Name: Steven M. Wagner
Title: Vice President
MediaOne Group, Inc.
As Sponsor
By: /s/ Stephen E. Brilz
-------------------------------
Name: Stephen E. Brilz
Title: Assistant Secretary
10
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST IV
This Certificate of Trust of MediaOne Finance Trust IV (the
"Trust"), dated October ___, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust IV.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
1
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
----------------------------------
Stephen E. Brilz
As Trustee
----------------------------------
Rahn K. Porter
As Trustee
----------------------------------
First Chicago Delaware Inc.
As Trustee
By:
-------------------------------
Name:
Title:
2
<PAGE>
DECLARATION OF TRUST
OF
MEDIAONE FINANCE TRUST V
October 5, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of
October 5, 1998 by the undersigned trustees (together with all other Persons
(as defined herein) from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"), the
Parent (as defined herein) as trust sponsor (the "Sponsor"), and by the
holders, from time to time, of undivided beneficial interests in the Trust
(as defined herein) to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act (as defined herein)
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures (as defined herein) of the Debenture
Issuer (as defined herein) and the Debenture Guarantees (as defined herein)
of the Parent endorsed thereon; and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Delaware Business Trust Act
and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of
the securities representing undivided beneficial interests issued hereunder,
subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified; and
<PAGE>
(e) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"COMMON SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"COVERED PERSON" means any employee or agent of the Trust or its
Affiliates.
"DEBENTURE GUARANTEE" means the guarantee by the Parent of the
Debentures to be issued by the Debenture Issuer.
"DEBENTURE ISSUER" means MediaOne Group Funding, Inc., a
Delaware corporation.
"DEBENTURES" means the series of Debentures to be issued by the
Debenture Issuer.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended
from time to time.
"DELAWARE TRUSTEE" has the meaning set forth in Section 3.1.
"INDEMNIFIED PERSON" means any Trustee, any Affiliate of any
Trustee or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee or any employee or agent
of the Trust or its Affiliates.
"PARENT" means, MediaOne Group, Inc., a Delaware corporation.
"PERSON" means any individual, joint venture, partnership,
corporation, association, joint stock company, limited liability company,
trust, unincorporated organization or other entity.
"PREFERRED SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"REGULAR TRUSTEE" means any Trustee other than the Delaware
Trustee.
"SECURITIES" means the Common Securities and the Preferred
Securities.
2
<PAGE>
"SPONSOR" means the Parent in its capacity as Sponsor of the
Trust.
"TRUSTEE" or "TRUSTEES" means each Person who has signed the
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and servicing as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME.
The Trust created by this Declaration is named "MediaOne Finance
Trust V." The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 OFFICE.
The address of the principal office of the Trust is 188
Inverness Drive West, Englewood, Colorado 80112. At any time, the Regular
Trustees may designate another principal office.
SECTION 2.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures and the Debenture Guarantees endorsed thereon, and (b) except as
otherwise limited herein, to engage in only those other activities necessary
or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments or, other than as permitted
herein, pledge any of its assets.
SECTION 2.4 AUTHORITY.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust.
In dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Regular Trustees as set forth
in this Declaration.
SECTION 2.5 TITLE TO PROPERTY OF THE TRUST.
Legal title to all assets of the Trust shall be vested in the
Trust.
3
<PAGE>
SECTION 2.6 POWERS OF THE TRUSTEES.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell Preferred Securities and Common Securities in
accordance with this Declaration and, in connection with such
issue and sale, to cause the Trust to file with the Securities
and Exchange Commission a registration statement on Form S-3 in
relation to the Preferred Securities, including any amendments
thereto; provided, however, that the Trust may issue no more
than one series of Preferred Securities and no more than one
series of Common Securities;
(b) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable
compensation for such services;
(c) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Declaration;
(d) execute and enter into a Dealer Manager Agreement or
Underwriting Agreement in connection with the issuance of
Preferred Securities; and
(e) execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
SECTION 2.7 FILING OF CERTIFICATE OF TRUST.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 DURATION OF TRUST.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for 55 years from the date hereof.
ARTICLE III
TRUSTEES
SECTION 3.1 TRUSTEES.
The number of Trustees shall initially be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any
4
<PAGE>
time; PROVIDED, HOWEVER, that the number of Trustees shall in no event be
less than four (4); and PROVIDED FURTHER that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of Delaware
or which, if not a natural person, has its principal place of business in the
State of Delaware (the "Delaware Trustee"). Except as expressly set forth in
this Declaration, any power of the Regular Trustees may be exercised by, or
with the consent of, a majority of the Regular Trustees.
The initial Regular Trustees shall be:
Constance P. Campbell
188 Inverness Drive West
Englewood, Colorado 80112
Stephen E. Brilz
5613 DTC Parkway
Englewood, Colorado 80155
Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 3.2 DELAWARE TRUSTEE
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the responsibilities described in this
Declaration of the Regular Trustees. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Delaware Business Trust Act.
SECTION 3.3 EXECUTION OF DOCUMENTS
(a) Any two Regular Trustees are authorized to execute on
behalf of the Trust the Registration Statement referred to in Section 2.6(a)
and any amendments thereto and any other documents that the Regular Trustees
have the power and authority to execute pursuant to Section 2.6; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing the Registration Statement referred
to in Section 2.6(a) and any amendment thereto or making any other
governmental filing.
5
<PAGE>
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
holders of the Securities which shall be made solely
from assets of the Trust; and
(ii) the Sponsor shall not be required to pay to the Trust or
to any holder of Securities any deficit upon dissolution
or otherwise
(b) the Sponsor shall be liable for all debts and obligations of the
Trust (other than with respect to the Securities) to the extent
not satisfied out of the Trust's assets.
SECTION 4.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions; and
(b) an Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which distributions to holders of Securities might
properly be paid.
SECTION 4.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The
6
<PAGE>
provisions of this Declaration, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair
and reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires,
including its own interests, and shall have no duty or
obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 4.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be
7
<PAGE>
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct with
respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 4.4(a).
SECTION 4.5 OUTSIDE BUSINESSES.
Any Covered Person and the Delaware Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person or the Delaware Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person and the Delaware Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 AMENDMENTS.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided no amendment may alter or affect
the Delaware Trustee's rights or duties hereunder without the Delaware
Trustee's prior written consent.
SECTION 5.2 TERMINATION OF TRUST.
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Debenture
Issuer or the revocation of the Sponsor or the Debenture
Issuer's charter or of the Trust's certificate of trust;
8
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, the Debenture Issuer or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
SECTION 5.3 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.6 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed
a single signature page.
9
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
- ----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
- ----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
- ----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
-------------------------------
Name: Steven M. Wagner
Title: Vice President
MediaOne Group, Inc.
As Sponsor
By: /s/ Stephen E. Brilz
-------------------------------
Name: Stephen E. Brilz
Title: Assistant Secretary
10
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST V
This Certificate of Trust of MediaOne Finance Trust V (the "Trust"),
dated October ___, 1998, is being duly executed and filed by the undersigned,
as trustees, to form a business trust under the Delaware Business Trust Act
(12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust V.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
1
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
----------------------------------
Stephen E. Brilz
As Trustee
----------------------------------
Rahn K. Porter
As Trustee
----------------------------------
First Chicago Delaware Inc.
As Trustee
By:
-------------------------------
Name:
Title:
2
<PAGE>
DECLARATION OF TRUST
OF
MEDIAONE FINANCE TRUST VI
October 5, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of
October 5, 1998 by the undersigned trustees (together with all other Persons
(as defined herein) from time to time duly appointed and serving as trustees
in accordance with the provisions of this Declaration, the "Trustees"), the
Parent (as defined herein) as trust sponsor (the "Sponsor"), and by the
holders, from time to time, of undivided beneficial interests in the Trust
(as defined herein) to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act (as defined herein)
for the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures (as defined herein) of the Debenture
Issuer (as defined herein) and the Debenture Guarantees (as defined herein)
of the Parent endorsed thereon; and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Delaware Business Trust Act
and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of
the securities representing undivided beneficial interests issued hereunder,
subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified; and
<PAGE>
(e) a reference to the singular includes the plural and vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"COMMON SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"COVERED PERSON" means any employee or agent of the Trust or its
Affiliates.
"DEBENTURE GUARANTEE" means the guarantee by the Parent of the
Debentures to be issued by the Debenture Issuer.
"DEBENTURE ISSUER" means MediaOne Group Funding, Inc., a
Delaware corporation.
"DEBENTURES" means the series of Debentures to be issued by the
Debenture Issuer.
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended
from time to time.
"DELAWARE TRUSTEE" has the meaning set forth in Section 3.1.
"INDEMNIFIED PERSON" means any Trustee, any Affiliate of any
Trustee or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee or any employee or agent
of the Trust or its Affiliates.
"PARENT" means, MediaOne Group, Inc., a Delaware corporation.
"PERSON" means any individual, joint venture, partnership,
corporation, association, joint stock company, limited liability company,
trust, unincorporated organization or other entity.
"PREFERRED SECURITY" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"REGULAR TRUSTEE" means any Trustee other than the Delaware
Trustee.
"SECURITIES" means the Common Securities and the Preferred
Securities.
2
<PAGE>
"SPONSOR" means the Parent in its capacity as Sponsor of the
Trust.
"TRUSTEE" or "TRUSTEES" means each Person who has signed the
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and servicing as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME.
The Trust created by this Declaration is named "MediaOne Finance
Trust VI." The Trust's activities may be conducted under the name of the
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 2.2 OFFICE.
The address of the principal office of the Trust is 188
Inverness Drive West, Englewood, Colorado 80112. At any time, the Regular
Trustees may designate another principal office.
SECTION 2.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures and the Debenture Guarantees endorsed thereon, and (b) except as
otherwise limited herein, to engage in only those other activities necessary
or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments or, other than as permitted
herein, pledge any of its assets.
SECTION 2.4 AUTHORITY.
Subject to the limitations provided in this Declaration, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust.
In dealing with the Regular Trustees acting on behalf of the Trust, no person
shall be required to inquire into the authority of the Regular Trustees to
bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Regular Trustees as set forth
in this Declaration.
SECTION 2.5 TITLE TO PROPERTY OF THE TRUST.
Legal title to all assets of the Trust shall be vested in the
Trust.
3
<PAGE>
SECTION 2.6 POWERS OF THE TRUSTEES.
The Regular Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell Preferred Securities and Common Securities in
accordance with this Declaration and, in connection with such
issue and sale, to cause the Trust to file with the Securities
and Exchange Commission a registration statement on Form S-3 in
relation to the Preferred Securities, including any amendments
thereto; provided, however, that the Trust may issue no more
than one series of Preferred Securities and no more than one
series of Common Securities;
(b) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable
compensation for such services;
(c) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Declaration;
(d) execute and enter into a Dealer Manager Agreement or
Underwriting Agreement in connection with the issuance of
Preferred Securities; and
(e) execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing.
SECTION 2.7 FILING OF CERTIFICATE OF TRUST.
On or after the date of execution of this Declaration, the
Trustees shall cause the filing of the Certificate of Trust for the Trust in
the form attached hereto as Exhibit A with the Secretary of State of the
State of Delaware.
SECTION 2.8 DURATION OF TRUST.
The Trust, absent termination pursuant to the provisions of
Section 5.2, shall have existence for 55 years from the date hereof.
ARTICLE III
TRUSTEES
SECTION 3.1 TRUSTEES.
The number of Trustees shall initially be four (4), and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Sponsor. The Sponsor is
entitled to appoint or remove without cause any Trustee at any
4
<PAGE>
time; PROVIDED, HOWEVER, that the number of Trustees shall in no event be
less than four (4); and PROVIDED FURTHER that one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of Delaware
or which, if not a natural person, has its principal place of business in the
State of Delaware (the "Delaware Trustee"). Except as expressly set forth in
this Declaration, any power of the Regular Trustees may be exercised by, or
with the consent of, a majority of the Regular Trustees.
The initial Regular Trustees shall be:
Constance P. Campbell
188 Inverness Drive West
Englewood, Colorado 80112
Stephen E. Brilz
5613 DTC Parkway
Englewood, Colorado 80155
Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 3.2 DELAWARE TRUSTEE
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor
shall the Delaware Trustee have any of the responsibilities described in this
Declaration of the Regular Trustees. The Delaware Trustee shall be a Trustee
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Delaware Business Trust Act.
SECTION 3.3 EXECUTION OF DOCUMENTS
(a) Any two Regular Trustees are authorized to execute on
behalf of the Trust the Registration Statement referred to in Section 2.6(a)
and any amendments thereto and any other documents that the Regular Trustees
have the power and authority to execute pursuant to Section 2.6; and
(b) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing the Registration Statement referred
to in Section 2.6(a) and any amendment thereto or making any other
governmental filing.
5
<PAGE>
ARTICLE IV
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Sponsor
shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
holders of the Securities which shall be made solely
from assets of the Trust; and
(ii) the Sponsor shall not be required to pay to the Trust or
to any holder of Securities any deficit upon dissolution
or otherwise
(b) the Sponsor shall be liable for all debts and obligations of the
Trust (other than with respect to the Securities) to the extent
not satisfied out of the Trust's assets.
SECTION 4.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions; and
(b) an Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which distributions to holders of Securities might
properly be paid.
SECTION 4.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered
Person for its good faith reliance on the provisions of this Declaration. The
6
<PAGE>
provisions of this Declaration, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair
and reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to
consider such interests and factors as it desires,
including its own interests, and shall have no duty or
obligation to give any consideration to any interest of
or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 4.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, except that no Indemnified Person
shall be entitled to be
7
<PAGE>
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct with
respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 4.4(a).
SECTION 4.5 OUTSIDE BUSINESSES.
Any Covered Person and the Delaware Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person or the Delaware Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person and the Delaware Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1 AMENDMENTS.
At any time before the issue of any Securities, this Declaration
may be amended by, and only by, a written instrument executed by all of the
Regular Trustees and the Sponsor; provided no amendment may alter or affect
the Delaware Trustee's rights or duties hereunder without the Delaware
Trustee's prior written consent.
SECTION 5.2 TERMINATION OF TRUST.
(a) The Trust shall terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Debenture
Issuer or the revocation of the Sponsor or the Debenture
Issuer's charter or of the Trust's certificate of trust;
8
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, the Debenture Issuer or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a
certificate of cancellation with the Secretary of State of the
State of Delaware.
SECTION 5.3 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 5.4 HEADINGS.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 5.5 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 5.6 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed
a single signature page.
9
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed
as of the day and year first above written.
Constance P. Campbell
As Trustee
/s/ Constance P. Campbell
- ----------------------------------
Stephen E. Brilz
As Trustee
/s/ Stephen E. Brilz
- ----------------------------------
Rahn K. Porter
As Trustee
/s/ Rahn K. Porter
- ----------------------------------
First Chicago Delaware Inc.
As Trustee
By: /s/ Steven M. Wagner
- ----------------------------------
Name: Steven M. Wagner
Title: Vice President
MediaOne Group, Inc.
As Sponsor
By: /s/ Stephen E. Brilz
- ----------------------------------
Name: Stephen E. Brilz
Title: Assistant Secretary
10
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
MEDIAONE FINANCE TRUST VI
This Certificate of Trust of MediaOne Finance Trust VI (the
"Trust"), dated October ___, 1998, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 DEL. C. Sections 3801 ET SEQ.).
1. NAME. The name of the business trust being formed hereby is
MediaOne Finance Trust VI.
2. DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust with a principal place of business in the State of Delaware is
First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as
of its filing.
1
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of
the Trust, have executed this Certificate of Trust as of the date first above
written.
Constance P. Campbell
As Trustee
----------------------------------
Stephen E. Brilz
As Trustee
----------------------------------
Rahn K. Porter
As Trustee
----------------------------------
First Chicago Delaware Inc.
As Trustee
By:
-------------------------------
Name:
Title:
2
<PAGE>
-------------------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
MediaOne Finance Trust [ ]
Dated as of [ ], 199[ ]
-------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
<TABLE>
<CAPTION>
<S> <C> <C>
Section 1.1 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application. . . . . . . . . . . . . . . . 9
Section 2.2 Lists of Holders of Securities. . . . . . . . . . . . . . . . . 9
Section 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . .10
Section 2.4 Periodic Reports to Property Trustee. . . . . . . . . . . . . .10
Section 2.5 Evidence of Compliance with Conditions Precedent. . . . . . . .10
Section 2.6 Events of Default; Waiver.. . . . . . . . . . . . . . . . . . .10
Section 2.7 Event of Default; Notice. . . . . . . . . . . . . . . . . . . .12
ARTICLE III
ORGANIZATION
Section 3.1 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.2 Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.3 Purpose.. . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.4 Authority.. . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 3.5 Title to Property of the Trust. . . . . . . . . . . . . . . . .14
Section 3.6 Powers and Duties of the Regular Trustees.. . . . . . . . . . .14
Section 3.7 Prohibition of Actions by the Trust and the Trustees. . . . . .18
Section 3.8 Powers and Duties of the Property Trustee.. . . . . . . . . . .19
Section 3.9 Certain Duties and Responsibilities of the Property Trustee. ..22
Section 3.10 Certain Rights of Property Trustee. . . . . . . . . . . . . . .24
Section 3.11 Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .27
Section 3.12 Execution of Documents. . . . . . . . . . . . . . . . . . . . .27
Section 3.13 Not Responsible for Recitals or Issuance of Securities. . . . .27
Section 3.14 Duration of Trust.. . . . . . . . . . . . . . . . . . . . . . .27
Section 3.15 Mergers.. . . . . . . . . . . . . . . . . . . . . . . . . . . .28
i
<PAGE>
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.. . . . . . . . . . . .30
Section 4.2 Responsibilities of the Sponsor.. . . . . . . . . . . . . . . .30
Section 4.3 Right to Proceed. . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE V TRUSTEES
Section 5.1 Number of Trustees. . . . . . . . . . . . . . . . . . . . . . .31
Section 5.2 Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .32
Section 5.3 Property Trustee; Eligibility.. . . . . . . . . . . . . . . . .32
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 5.5 Initial Trustees. . . . . . . . . . . . . . . . . . . . . . . .33
Section 5.6 Appointment, Removal and Resignation of Trustees. . . . . . . .34
Section 5.7 Vacancies among Trustees. . . . . . . . . . . . . . . . . . . .36
Section 5.8 Effect of Vacancies.. . . . . . . . . . . . . . . . . . . . . .36
Section 5.9 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 5.10 Delegation of Power.. . . . . . . . . . . . . . . . . . . . . .37
Section 5.11 Merger, Conversion, Consolidation or Succession to Business . .37
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.. . . . . . . . . . . . . . . . . . . . . . . . .38
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.. . . . . . . . . . . .38
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust. . . . . . . . . . . . . .39
ii
<PAGE>
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities. . . . . . . . . . . . . . . . . . . . .41
Section 9.2 Transfer of Certificates. . . . . . . . . . . . . . . . . . . .41
Section 9.3 Deemed Security Holders.. . . . . . . . . . . . . . . . . . . .42
Section 9.4 Book Entry Interests. . . . . . . . . . . . . . . . . . . . . .42
Section 9.5 Notices to Clearing Agency. . . . . . . . . . . . . . . . . . .43
Section 9.6 Appointment of Successor Clearing Agency. . . . . . . . . . . .43
Section 9.7 Definitive Preferred Security Certificates. . . . . . . . . . .43
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.. . . . . . .44
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.. . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 10.2 Exculpation.. . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 10.3 Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . .46
Section 10.4 Indemnification.. . . . . . . . . . . . . . . . . . . . . . . .47
Section 10.5 Outside Businesses. . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.. . . . . . . . . . . . . . . . . . . . . . . . . .49
Section 11.2 Certain Accounting Matters. . . . . . . . . . . . . . . . . . .49
Section 11.3 Banking.. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 11.4 Withholding.. . . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 12.2 Meetings of the Holders of Securities; Action by Written
Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . .52
iii
<PAGE>
ARTICLE XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee. . . . . . .54
Section 13.2 Representations and Warranties of Delaware Trustee. . . . . . .55
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 14.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .57
Section 14.3 Intention of the Parties. . . . . . . . . . . . . . . . . . . .58
Section 14.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Section 14.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .58
Section 14.6 Partial Enforceability. . . . . . . . . . . . . . . . . . . . .59
Section 14.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .59
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
- ------------------- -----------
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(c)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibit A, 2.6
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
</TABLE>
- -----------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MediaOne Finance Trust [ ]
[ ], 199[ ]
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of [ ], 199[ ] by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), MediaOne
Group, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established a
trust (the "Trust") under the Delaware Business Trust Act pursuant to a
Declaration of Trust, dated as of October 5, 1998 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
Delaware on October 5, 1998, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets
of the Trust and investing the proceeds thereof in certain Debentures of the
Debenture Issuer and the Debenture Guarantee of the Sponsor endorsed thereon;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Amended and Restated Declaration of Trust as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration; and
(f) a reference to the singular includes the plural and vice
versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"AUTHORIZED OFFICER" of a Person means any Person that is
authorized to bind such Person.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
2
<PAGE>
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York or Chicago, Illinois are authorized or
required by law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. C. Section 3801 ET SEQ., as it may be amended from
time to time.
"CERTIFICATE" means a Common Security Certificate or a
Preferred Security Certificate.
"CLEARING AGENCY" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting
as depositary for the Preferred Securities and in whose name or in the name
of a nominee of that organization, shall be registered a Global Certificate
and which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"CLOSING DATE" means [ ], 199[ ].
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON SECURITY" has the meaning specified in Section 7.1.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to
be dated as of [ ], 199[ ] of the Sponsor in respect of the
Common Securities.
"COMMON SECURITY CERTIFICATE" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Annex II to Exhibit A.
"COVERED PERSON" means:
(a) any officer, director, shareholder, partner, member,
representative, employee or agent of:
3
<PAGE>
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
"DEBENTURE GUARANTEE" means the guarantee by the Sponsor of
the Debentures endorsed thereon.
"DEBENTURE GUARANTOR" means the Sponsor in its capacity as
guarantor under the Debenture Guarantee.
"DEBENTURE ISSUER" means MediaOne Group Funding, Inc., a
Delaware corporation.
"DEBENTURE TRUSTEE" means Norwest Bank Minnesota, National
Association, as trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.
"DEBENTURES" means the series of Debentures to be issued by
the Debenture Issuer under the Indenture to be held by the Property Trustee
pursuant to Section 3.6(c), a specimen certificate for such series of
Debentures being Exhibit B.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE PREFERRED SECURITY CERTIFICATES" has the meaning
set forth in Section 9.4.
"DIRECT ACTION" has the meaning set forth in Section 3.8(e).
"DISTRIBUTION" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
4
<PAGE>
"EVENT OF DEFAULT" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means
(i) any Trustee;
(ii) any Affiliate of any Trustee;
(iii) any officers, directors, shareholders, members,
partners, employees, representatives or agents
of any Trustee; or
(iv) any employee or agent of the Trust or its
Affiliates.
"INDENTURE" means the Indenture dated as of June 12, 1998
among the Debenture Issuer, MediaOne Group, Inc., a Delaware corporation, as
guarantor, and Norwest Bank Minnesota, National Association, as trustee, as
supplemented by a [ ] Supplemental Indenture dated as of
[ ], 199[ ] among the Debenture Issuer, the Sponsor, as
guarantor, and Norwest Bank Minnesota, National Association, as trustee, and
any indenture supplemental thereto pursuant to which the Debentures and the
Debenture Guarantee are to be issued.
"INVESTMENT COMPANY" means an investment company as defined in
the Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended from time to time or any successor legislation.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means,
except as provided in the terms of the Preferred Securities and by the Trust
Indenture Act,
5
<PAGE>
Holder(s) of Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common Securities voting
separately as a class, who vote Securities of a relevant class and the
aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
of the Securities voted by such Holders represents more than 50% of the above
stated liquidation amount of all Securities of such class.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement
to be dated as of [ ], 199[ ] of the Sponsor in respect of the
Preferred Securities.
"PREFERRED SECURITY" has the meaning specified in Section 7.1.
6
<PAGE>
"PREFERRED SECURITY BENEFICIAL OWNER" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"PREFERRED SECURITY CERTIFICATE" means a certificate representing a
Preferred Security substantially in the form of Annex I to Exhibit A.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section
3.8(c).
"PURCHASE AGREEMENT" means the Purchase Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.
"QUORUM" means a majority of the Regular Trustees or if there are only
two Regular Trustees, both of them.
"REGULAR TRUSTEE" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Property Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
7
<PAGE>
"SPECIAL EVENT" has the meaning set forth in the terms of the
Securities.
"SPONSOR" means MediaOne Group, Inc., a Delaware corporation or any
permitted successor thereof under the Indenture, in its capacity as sponsor of
the Trust.
"SUCCESSOR PROPERTY TRUSTEE" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3(a).
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities,
voting separately as a class, who vote Securities of a relevant class and the
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents 10% of the above stated liquidation amount of
all Securities of such class.
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
8
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act;
(c) if and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(d) the application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor, the Debenture Issuer and the Regular
Trustees on behalf of the Trust shall provide the Property Trustee (i) within 14
days after each record date for payment of Distributions, a list, in such form
as the Property Trustee may reasonably require, of the names and addresses of
the Holders of the Securities ("List of Holders") as of such record date,
PROVIDED THAT none of the Sponsor, the Debenture Issuer or the Regular Trustees
on behalf of the Trust shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the Property Trustee by the Sponsor, the Debenture Issuer and the
Regular Trustees on behalf of the Trust, and (ii) at any other time, within 30
days of receipt by the Trust of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it or which it receives in its capacity as Paying Agent (if acting in such
capacity) PROVIDED THAT the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders; and
9
<PAGE>
(b) the Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, commencing May [ ], the
Property Trustee shall provide to the Holders of the Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor, the Debenture Issuer, and the Regular Trustees on
behalf of the Trust shall provide to the Property Trustee such documents,
reports and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences provided that if the underlying Event of Default
under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
10
<PAGE>
(ii) requires the consent or vote of the holders of greater
than a majority in principal amount of the Debentures
affected thereby (a "Super Majority") to be waived, the
Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Preferred Securities of an Event of Default with
respect to the Preferred Securities shall also be deemed to constitute a waiver
by the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration without
any further act, vote or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED THAT, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided
below in the proviso to this Section 2.6(b), the Event of
Default under the Declaration shall also be not waivable;
or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities
are deemed to have waived such Event of Default under the
Declaration as provided below in the proviso to this
Section 2.6(b), the Event of Default under the
11
<PAGE>
Declaration may only be waived by the vote of the Holders
of at least the proportion in liquidation amount of the
Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding,
PROVIDED THAT, each Holder of Common Securities will be deemed to have waived
any Event of Default with respect to the Common Securities and its consequences
until all Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated and until such Events of Default have been
so cured, waived or otherwise eliminated, the Property Trustee will be deemed to
be acting solely on behalf of the Holders of the Preferred Securities and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee in accordance with the terms of the Securities. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such default
shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) A waiver of any Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence
of an Event of Default with respect to the Securities known to the Property
Trustee, transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all such defaults unless such defaults have been cured
before the giving of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); PROVIDED, THAT,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers,
12
<PAGE>
of the Property Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged
with the administration of the Declaration shall have
obtained written notice of.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "MediaOne Finance Trust [ ]", as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is 188 Inverness
Drive West, Englewood, Colorado 80112. On ten Business Days written notice to
the Holders of Securities, the Regular Trustees may designate another principal
office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures
and the Debenture Guarantee, and (b) except as otherwise limited herein, to
engage in only those other activities necessary, or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would
13
<PAGE>
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust. It is the intention of all of the parties
hereto that the Trust created hereunder constitutes a "grantor trust" for
federal income tax purposes under the Code, and all parties hereto, and the
Holders of the Preferred Securities by the purchase of the Preferred
Securities will be deemed to, agree to treat the Trust with such
characterization. The provisions of this Agreement shall be interpreted
consistently with such characterization.
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures, the
Debenture Guarantee and the Property Trustee Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power and authority and
duty to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, PROVIDED FURTHER, there shall be no
interests in the Trust other than the Securities and the issuance of Securities
shall be limited to a one-time,
14
<PAGE>
simultaneous issuance of both Preferred Securities and Common Securities on
the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange
Commission (the "Commission") the registration statement
on Form S-3 prepared by the Sponsor in relation to the
Preferred Securities, including any amendments thereto
prepared by the Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor as necessary in
order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has
determined to qualify or register such Preferred
Securities for sale;
(iii) execute and file an application prepared by the Sponsor to
the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A prepared by the Sponsor relating to
the registration of the Preferred Securities under Section
12(b) of the Exchange Act, including any amendments
thereto prepared by the Sponsor; and
(v) execute and enter into the Purchase Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Debentures and the Debenture Guarantee with the
proceeds of the sale of the Preferred Securities and the Common Securities;
PROVIDED, HOWEVER, that the Regular Trustees shall cause legal title to the
Debentures and the Debenture Guarantee to be owned by and held of record in the
name of the Property Trustee for the benefit of the Holders of the Preferred
Securities and the Common Securities;
15
<PAGE>
(d) to give the Debenture Issuer, the Sponsor and the Property
Trustee prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including for the
purposes of Section 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Common Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(f), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by
Section 314(a)(4) of the Trust Indenture Act which certificate may be executed
by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
16
<PAGE>
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their discretion to
be necessary or desirable in carrying out the activities of the Trust as set out
in this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes,
provided that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner which is consistent with the purposes, functions and
characterization for federal income tax purposes of the Trust set out in Section
3.3 and the Regular Trustees shall not take any action which is inconsistent
with the purposes, functions and characterization for federal income tax
purposes of the Trust set forth in Section 3.3.
17
<PAGE>
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) Notwithstanding any provision herein to the contrary, the Trust
shall not, and the Trustees (including the Property Trustee) shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in
any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as expressly provided in this Declaration and
Exhibit A hereto, (A) direct the time, method and place of
exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past
default that is waivable under Section 6.06 of the
Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Deben-
18
<PAGE>
tures shall be due and payable or (D) consent to any
amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required,
unless the Trust shall have received an opinion of
counsel to the effect that such modification will not
cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be
classified as a grantor trust.
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures and the Debenture Guarantee
shall be owned by and held of record in the name of the Property Trustee for
the benefit of the Trust and the Holders of the Securities. The right, title
and interest of the Property Trustee to the Debentures and the Debenture
Guarantee shall vest automatically in each Person who may hereafter be
appointed as Property Trustee as set forth in Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered;
(b) the Property Trustee shall not transfer its right, title and
interest in the Debentures and the Debenture Guarantee to the Regular
Trustees or to the Delaware Trustee (if the Property Trustee does not also
act as Delaware Trustee);
(c) the Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
bank account (the "Property Trustee Account") in the
name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and,
upon the receipt of payments of funds made in respect of
the Debentures and Debenture Guarantee held by the
Property Trustee, deposit such funds into the Property
Trustee Account and make payments to the Holders of the
Preferred Securities and the Common Securities from the
Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an
account which is maintained with a banking institution
the
19
<PAGE>
rating on whose long term unsecured indebtedness is at
least equal to the rating assigned to the Preferred
Securities by a "nationally recognized statistical
rating organization", as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the
extent the Debentures are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees
in accordance with the terms of the Preferred Securities
and the Common Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect
the distribution of the Debentures and the Debenture
Guarantee to Holders of Securities upon the Sponsor's
election to dissolve the Trust in accordance with Section
8.1(a)(v);
(d) the Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities;
(e) the Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act. If
the Property Trustee fails to enforce its rights under the Debentures and/or
the Debenture Guarantee after a Holder of Preferred Securities has made a
written request, such Holder may institute a legal proceeding against the
Debenture Issuer and/or the Debenture Guarantor, as the case may be, to
enforce the Property Trustee's rights under the Debentures and/or the
Debenture Guarantee, as the case may be, without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest, premium, if any, or principal on the Debentures on
the date such interest, premium, if any, or principal is otherwise payable
(or in the case of redemption, on the redemption date) or a failure of the
Debenture Guarantor to make a payment under the Debenture Guarantee when
payable, then a Holder of Preferred Securities may
20
<PAGE>
directly institute a proceeding for enforcement of payment to such Holder of
the principal of, premium, if any, or interest on, the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action"). Notwithstanding any payments
made to such Holder of Preferred Securities by the Debenture Issuer or the
Debenture Guarantor in connection with a Direct Action, the Debenture Issuer
and the Debenture Guarantor shall remain obligated to pay the principal of
premium, if any, or interest on the Debentures held by the Trust or the
Property Trustee of the Trust, and the Debenture Issuer and the Debenture
Guarantor shall be subrogated to the rights of the Holder of such Preferred
Securities with respect to payments on the Preferred Securities. Except as
provided in the preceding sentences and in the Preferred Securities
Guarantee, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures and the
Debenture Guarantee.
(f) no resignation of the Property Trustee shall be effective
unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with Section 5.6;
(g) the Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures and the
Debenture Guarantee under the Indenture and, if an Event of Default occurs
and is continuing, the Property Trustee shall, for the benefit of Holders of
the Securities, enforce its rights as holder of the Debentures and the
Debenture Guarantee subject to the rights of the Holders pursuant to the
terms of such Securities;
(h) the Property Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and
any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any Paying Agent may be removed by the Property Trustee at any
time and a successor Paying
21
<PAGE>
Agent or additional Paying Agents may be appointed at any time by the
Property Trustee; and
(i) subject to this Section 3.8, the Property Trustee shall have
none of the powers or the authority of the Regular Trustees set forth in
Section 3.6;
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes, functions and
characterization for federal income tax purposes of the Trust set forth in
Section 3.3 and the Property Trustee shall not take any action which is
inconsistent with the purposes, functions and characterization for federal
income tax purposes of the Trust set out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration in Sections 2.2, 2.3, 2.7, 3.8, 3.9, 3.10 and 6.1
and in the terms of the Securities, and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions
of this Declaration in Sections 2.2, 2.3, 2.7, 3.8,
3.9, 3.10 and 6.1 and in the terms of the
Securities, and the Property Trustee shall not be
liable
22
<PAGE>
except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
of the Property Trustee, unless it shall be proved that
the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee
under this Declaration; and
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of
23
<PAGE>
any of its duties or in the exercise of any of its
rights or powers, if it shall have reasonable ground for
believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or
liability is not reasonably assured to it.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully
protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper
party or parties;
(ii) any act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or
omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof);
24
<PAGE>
(v) the Property Trustee may consult with counsel and the
written advice or opinion of such counsel with respect
to legal matters shall be full and complete
authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion. Such
counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The
Property Trustee shall have the right at any time to
seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any
Holder, unless such Holder shall have provided to the
Property Trustee adequate security and indemnity which
would satisfy a reasonable person in the position of the
Property Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or
direction, including such reasonable advances as may be
requested by the Property Trustee PROVIDED, THAT,
nothing contained in this Section 3.10(a)(vi) shall be
taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
25
<PAGE>
directly or by or through agents or attorneys and the
Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities and the signature of the Property Trustee or
its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be
required to inquire as to the authority of the Property
Trustee to so act, or as to its compliance with any of
the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of
the Securities which instructions may only be given by
the Holders of the same proportion in liquidation amount
of the Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking
such other action until such instructions are received,
and (iii) shall be protected in acting in accordance
with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary
under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in
26
<PAGE>
which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation.
No permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration, except as
mandated by the Business Trust Act. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Regular Trustees and except as
otherwise required by the Business Trust Act, each of the Regular Trustees
are authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute pursuant to Section
3.6.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part
thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for 55 years from the Closing Date.
27
<PAGE>
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with
or into, or be replaced by a trust organized as such under the laws of any
State; PROVIDED, THAT:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as
the Preferred Securities (the "Successor
Securities") so long as the Successor Securities
rank the same as the Preferred Securities rank
with respect to Distributions and payments upon
liquidation, redemption and maturity;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity which possesses the same powers and
duties as the Property Trustee as the Holder of the
Debentures and the Sponsor expressly acknowledges such
trustee of the Successor Entity as the holder of the
Debenture Guarantee;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or other organization on which the Preferred
Securities are then listed;
28
<PAGE>
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than
with respect to any dilution of the Holders' interest in
the new entity);
(vi) such successor entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust
experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to
any dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation, amalgamation
or replacement, neither the Trust nor the
Successor Entity will be required to register as
an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the
extent provided by the Preferred Securities Guarantee;
and
(c) notwithstanding Section 3.15(b), the Trust shall not
consolidate, amalgamate, merge with or into, or be replaced by any other
entity or permit
29
<PAGE>
any other entity to consolidate, amalgamate, merge with or into, or replace
it if such consolidation, amalgamation, merger or replacement would cause the
Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, at the same time as the Preferred Securities
are sold, in an amount equal to 3% of the capital of the Trust.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in
the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
take any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred
30
<PAGE>
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Purchase Agreement providing for
the sale of the Preferred Securities.
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute a Direct
Action as set forth in Section 3.8(e) hereto.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees shall initially be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; PROVIDED, HOWEVER, that the number of Trustees shall in
no event be less than three (3); PROVIDED FURTHER that (1) one Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware, (2) there shall be at least two
Trustees who are employees or officers of, or are affiliated with the Sponsor;
and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
31
<PAGE>
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, provided that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Commission to act
as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial
or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published;
32
<PAGE>
(b) if at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c);
(c) if the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act; and
(d) (i) the Preferred Securities Guarantee, (ii) the Preferred
Securities Guarantee Agreement dated June 12, 1998 relating to MediaOne
Finance Trust I, (iii) the Preferred Securities Guarantee Agreement dated
June 12, 1998 relating to MediaOne Finance Trust II, (iv) the Preferred
Securities Guarantee Agreement dated September 11, 1995 relating to MediaOne
Financing A, (v) the Preferred Securities Guarantee Agreement dated October
29, 1996 relating to MediaOne Financing B, (vi) the Amended and Restated
Declaration of Trust dated June 12, 1998 of MediaOne Finance Trust I, (vii)
the Amended and Restated Declaration of Trust dated June 12, 1998 of MediaOne
Finance Trust II, (viii) the Amended and Restated Declaration of Trust dated
September 11, 1995 of MediaOne Financing A and (ix) the Amended and Restated
Declaration of Trust dated October 29, 1996 of MediaOne Financing B shall be
deemed to be specifically described in this Declaration for purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 5.4 QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity which shall act through one or more
Authorized Officers.
SECTION 5.5 INITIAL TRUSTEES.
The initial Regular Trustees under this Declaration shall be:
Constance P. Campbell
188 Inverness Drive West
Englewood, Colorado 80112
33
<PAGE>
Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
Stephen E. Brilz
188 Inverness Drive West
Englewood, Colorado 80112
The initial Delaware Trustee under this Declaration shall be:
First Chicago Delaware, Inc.
300 King Street
Wilmington, Delaware 19801
Attn: Michael J. Majchrzak
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attn: Corporate Trust Services Division
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities by vote of the
Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders
of the Common Securities; and
(b) (i) the Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a
Successor Property Trustee has been appointed and has
34
<PAGE>
accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular
Trustees and the Sponsor; and
(c) a Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; PROVIDED, HOWEVER,
that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until a Successor
Property Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor
and the resigning Property Trustee; or until the assets of
the Trust have been completely liquidated and the proceeds
thereof distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor
and the resigning Delaware Trustee; and
(d) the Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property
35
<PAGE>
Trustee as the case may be if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6; and
(e) if no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee may petition
any court of competent jurisdiction for appointment of a Successor Property
Trustee or Successor Delaware Trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by a majority of the Regular Trustees
shall be conclusive evidence of the existence of such vacancy. The vacancy
shall be filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to annul the Trust. Whenever a vacancy in
the number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
SECTION 5.9 MEETINGS.
Meetings of the Regular Trustees shall be held from time to time upon
the call of any Regular Trustee. Regular meetings of the Regular Trustees may
be held at a time and place fixed by resolution of the Regular Trustees. Notice
of any in-person meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the
36
<PAGE>
Regular Trustees or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting
has not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of
the Regular Trustees.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section 3.6
including any registration statement or amendment thereto filed with the
Commission or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be bound by this Declaration, or any corporation succeeding to all
or substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
37
<PAGE>
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. Distributions shall be made on the
Preferred Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that the
Debenture Issuer makes a payment of interest (including Additional Interest (as
defined in the Indenture)), premium and principal on the Debentures (or the
Sponsor makes a payment in respect of the Debenture Guarantee) held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust, issue one
class of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Exhibit A and
incorporated herein by reference (the "Preferred Securities"), and one class of
common securities representing undivided beneficial interests in the assets of
the Trust having such terms as are set forth in Exhibit A and incorporated
herein by reference (the "Common Securities"). The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities;
(b) the Certificates shall be signed on behalf of the Trust by the
Regular Trustees (or if there are more than two Regular Trustees by any two of
the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Certificate. In case any Regular Trustee
of the Trust who shall have signed any of the Certificates shall cease to be
such Regular Trustee before the Certificate so signed shall be delivered by the
Trust, such Certificate nevertheless may be delivered as though the person who
signed such Certificate had not ceased to be such Regular
38
<PAGE>
Trustee; and any Certificate may be signed on behalf of the Trust by such
persons who shall at the actual date of execution of such Security, be the
Regular Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such a Regular Trustee.
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements
as the Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation of any stock exchange on which
Securities may be listed, or to conform to usage;
(c) the consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust;
(d) upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable; and
(e) every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by this Declaration.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 DISSOLUTION AND TERMINATION OF TRUST.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor or the Debenture
Issuer;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Debenture
Issuer, upon the consent (other than in connection with a
dissolution of the Trust pursuant to clause (v) of this
Section 8.1(a)) of the Holders of at least a Majority in
liquidation
39
<PAGE>
amount of the Securities, voting together as a single
class, to file a certificate of cancellation with respect
to the Trust, or the revocation of the charter of the
Sponsor or the Debenture Issuer and the expiration of
90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, the Debenture Issuer or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance
with the terms of the Securities;
(v) upon the election by the Sponsor, effective upon notice to
the Trust, the Property Trustee and the Delaware Trustee,
to dissolve the Trust in accordance with the terms of the
Securities and all of the Debentures and Debenture
Guarantees endorsed thereon shall have been distributed to
the Holders of Securities in exchange for all of the
Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon the completion of the winding up of the
Trust, one of the Regular Trustees (each Regular Trustee being hereby authorized
to take such action) shall file a certificate of cancellation with the Secretary
of State of the State of Delaware terminating the Trust; and
(c) the provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
40
<PAGE>
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void;
(b) subject to this Article IX, Preferred Securities shall be freely
transferable; and
(c) the Sponsor may not transfer the Common Securities.
SECTION 9.2 TRANSFER OF CERTIFICATES.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges which may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the documents incorporated by reference herein.
(b) Notwithstanding any other provisions of this Declaration, a
Global Certificate may not be transferred as a whole, except by the Clearing
Agency to a nominee of the Clearing Agency or by the Clearing Agency or any such
nominee to a successor Clearing Agency or a nominee of such successor Clearing
Agency.
41
<PAGE>
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trustees shall have
actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will
receive a definitive Preferred Security Certificate representing such Preferred
Security Beneficial Owner's interests in such Global Certificates, except as
provided in Section 9.7. Unless and until definitive, fully registered
Preferred Security Certificates (the "Definitive Preferred Security
Certificates") have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established
42
<PAGE>
by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC
will make book entry transfers among the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants; PROVIDED, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as Definitive
Preferred Securities have not been issued, the Trustees may conclusively rely
on, and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Preferred Security Beneficial Owners' votes or assigning the right to vote on
any matter to any other Persons either in whole or in part.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications, specified herein to be given to the Preferred
Security Holders, to the Clearing Agency, and shall have no notice obligations
to the Preferred Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6; or
43
<PAGE>
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Certificates to be delivered to Preferred Security Beneficial Owners
in accordance with the instructions of the Clearing Agency. Neither the
Trustees nor the Trust shall be liable for any delay in delivery of such
instructions and each of them may conclusively rely on and shall be protected in
relying on, such instructions. The Definitive Preferred Security Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Preferred Securities may be listed, or to conform
to usage.
Preferred Security Certificates issued in exchange for a beneficial
interest in a Global Certificate shall be registered in such names and in such
authorized denominations as the Clearing Agency, pursuant to instructions from
Clearing Agency Participants or indirect participants or otherwise, shall
instruct the Property Trustee. The Property Trustee shall deliver such
Preferred Security Certificate to the persons in whose names such Preferred
Securities are so registered in accordance with the instruction of the Clearing
Agency.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
44
<PAGE>
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless, then in the
absence of notice that such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this Section 9.8, the Regular Trustees
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Debenture
Guarantee, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the
Holders of the Securities which shall be made solely from
assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or
otherwise; and
(b) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Securities, in their capacity as such, shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
45
<PAGE>
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, except as otherwise set forth in Section 3.9) or
willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Persons; or
46
<PAGE>
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provide that an Indemnified
Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Trust or any Holder
of Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give
any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard
and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Declara-
47
<PAGE>
tion, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
except as set forth in Section 3.9) or willful misconduct with respect to such
acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a); and
(c) the provisions of this Section 10.4 shall survive the termination
of this Declaration or resignation or removal of any Trustee.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Debenture Issuer, the Delaware
Trustee and the Property Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Debenture Issuer, the Delaware Trustee, or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Debenture
Issuer, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
48
<PAGE>
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon, as of the end of each
Fiscal Year, by a firm of independent certified public accountants selected by
the Regular Trustees;
(b) the Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) the Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust; and
(d) the Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
49
<PAGE>
SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; PROVIDED, HOWEVER, that all payments of funds in
respect of the Debentures and the Debenture Guarantee held by the Property
Trustee shall be made directly to the Property Trustee Account and no other
funds of the Trust shall be deposited in the Property Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
PROVIDED, HOWEVER, that the Property Trustee shall designate the sole
signatories for the Property Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust and the Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and only
by, a written instrument approved and executed by the Regular Trustees (or, if
there are
50
<PAGE>
more than two Regular Trustees a majority of the Regular Trustees);
PROVIDED, HOWEVER, that:
(i) no amendment shall be made, and any such purported
amendment shall be void and ineffective, to the extent the
result thereof would be to
(A) cause the Trust to fail to be classified for the
purposes of United States federal income taxation
as a grantor trust;
(B) affect the powers or the rights of the Property
Trustee or the Delaware Trustee without the
written consent of the Property Trustee or the
Delaware Trustee, as the case may be; or
(C) cause the Trust to be deemed to be an Investment
Company which is required to be registered under
the Investment Company Act;
(ii) at such time after the Trust has issued any Securities
which remain outstanding, any amendment which would
adversely affect the rights, privileges or preferences of
any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms
of such Securities;
(iii) Section 9.1 (c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the
Securities;
(iv) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common
Securities; and
(v) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without
the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
51
<PAGE>
(b) Notwithstanding Section 12.1(a)(ii), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to ensure the Trust's status as a grantor trust for
federal income tax purposes.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of such class of Holders, if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Security Certificates held by the Holders of Securities exercising the right
to call a meeting and only those specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met; and
(b) except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at
least 7 days and not more than 60 days before the date of
such meeting. Whenever a vote, consent or approval of the
52
<PAGE>
Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which
the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a
meeting of the Holders of Securities. Any action that may
be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of
Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any
written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the
pleasure of the Holder of Securities executing it. Except
as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and
53
<PAGE>
(iv) unless the Business Trust Act, the Trust Indenture Act,
this Declaration, the terms of the Securities or the
listing rules of any stock exchange on which the Preferred
Securities are then listed or trading, otherwise provides,
the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the
establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee which acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of
54
<PAGE>
equity and the discretion of the court (regardless of whether the enforcement
of such remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Property Trustee;
(d) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee, of the Declaration; and
(e) if the Property Trustee also acts as the Delaware Trustee, the
Delaware Trustee under Delaware law is either a natural person who is a resident
of the State of Delaware or if not a natural person, an entity which maintains
its principal place of business in the State of Delaware.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee which acts as Delaware Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as such
that:
(a) The Delaware Trustee under Delaware law is either a natural
person who is a resident of the State of Delaware or if not a natural person, an
entity which maintains its principal place of business in the State of Delaware;
(b) the Delaware Trustee satisfies the requirements set forth in
Section 5.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization;
(c) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration. This
Declaration under Delaware law constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the
55
<PAGE>
court (regardless of whether the enforcement of such remedies is considered
in a proceeding in equity or at law); and
(d) no consent, approval or authorization of, or registration with or
notice to, any Delaware State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
MediaOne Finance Trust [ ]
c/o MediaOne Group, Inc.
188 Inverness Drive West
Englewood, Colorado 80112
Attention: Treasurer
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice of to
the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
(c) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice of to
the Holders of the Securities):
56
<PAGE>
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
MediaOne Group, Inc.
188 Inverness Drive West
Englewood, Colorado 80112
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 GOVERNING LAW.
THE DECLARATION AND THE RIGHTS AND OBLIGATIONS OF THE HOLDERS, THE
TRUST, THE SPONSOR AND THE TRUSTEES SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
LAWS OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION OTHER THAN THE STATE OF
DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS,
THE TRUST, THE SPONSOR , THE TRUSTEES OR THIS DECLARATION ANY PROVISION OF THE
LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT
RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE
FILING WITH ANY COURT OR GOVERNMENTAL
57
<PAGE>
BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES,
(B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS AGENTS OR
EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF
REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO THE TRUSTEES,
OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND
EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE
PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR
REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR
INVESTING TRUST ASSETS, (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS
OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE
INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND POWERS OF
THE TRUSTEES AS SET FORTH OR REFERENCED IN THIS DECLARATION. SECTION 3540 OF
TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE TRUST.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 SUCCESSORS AND ASSIGNS
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
58
<PAGE>
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
59
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
Constance P. Campbell
as Regular Trustee
- -----------------------------
Rahn K. Porter
as Regular Trustee
- -----------------------------
Stephen E. Brilz
as Regular Trustee
- -----------------------------
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By:
--------------------------
Name:
Title:
60
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By:
------------------------------
Name:
Title:
MEDIAONE GROUP, INC.
as Sponsor
By:
------------------------------
Name:
Title:
61
<PAGE>
EXHIBIT A
TERMS OF
[ ]% PREFERRED SECURITIES
[ ]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [ ], 199[ ] (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
a. PREFERRED SECURITIES. [ ] Preferred Securities
of the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of [ ] Dollars ($[ ]), and a liquidation
amount with respect to the assets of the Trust of $[ ] per Preferred
Security, are hereby designated for the purposes of identification only as
"[ ]% Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form attached hereto as Annex I, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.
b. COMMON SECURITIES. [ ] Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] Dollars ($[ ]), and a liquidation amount
with respect to the assets of the Trust of $[ ] per Common Security, are
hereby designated for the purposes of identification only as "[ ]% Common
Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form attached
hereto as Annex II, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
A-1
<PAGE>
2. DISTRIBUTIONS.
a. Periodic Distributions payable on each Security will be fixed at
a rate per annum of [ ]% (the "Coupon Rate") of the stated liquidation amount
of $[ ] per Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one [ ] period will bear interest thereon at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used in
these terms includes such periodic cash distributions and any such interest
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures or the Debenture Guarantee
held by the Property Trustee. The amount of Distributions payable for any period
will be computed for any full [ ] Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full [ ] Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
in such a 30-day month.
b. Distributions on the Securities will be cumulative, will
accrue from [ ], 199[ ] and will be payable [ ] in
arrears, on [ ] of each year, commencing on [ ], 199[ ], except
as otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding [ ]
consecutive [ ]periods (each, an "Extension Period") and, as a
consequence of such extension, Distributions will also be deferred. Despite
such deferral, [ ]Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the Coupon
Rate during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; PROVIDED THAT such Extension Period together with all such previous
and further extensions thereof may not exceed [ ] consecutive
[ ] periods. Payments of accrued Distributions will be payable
to Holders as they appear on the books and records of the Trust on the first
record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
c. Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book-entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Debentures. Subject to
A-2
<PAGE>
any applicable laws and regulations and the provisions of the Declaration,
each such payment in respect of the Preferred Securities will be made as
described under the heading "Certain Terms of the Preferred Securities --
Book-Entry-Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated [ ] (the "Prospectus Supplement") to the
Prospectus dated [ ], 1998 (as so supplemented the "Prospectus") of
the Trust included in the Registration Statement on Form S-3 of the Sponsor,
the Debenture Issuer, the Trust and certain other business trusts. The
relevant record dates for the Common Securities shall be the same record
dates as for the Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form, the relevant record dates for the
Preferred Securities, shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer or the Sponsor having
failed to make a payment under the Debentures or the Debenture Guarantee, as
the case may be, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
d. In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the
A-3
<PAGE>
aggregate of the stated liquidation amount of $[ ] per Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Securities,
with an interest rate equal to the Coupon Rate of, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions
on, such Securities, shall be distributed on a Pro Rata basis to the Holders
of the Securities in exchange for such Securities, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
a. Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption, the proceeds from such repayment or payment
shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed, at the redemption price for the Debentures, payable in cash
(the "Redemption Price"). Holders will be given not less than 30 nor more than
60 days notice of such redemption.
b. If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be as described in
Paragraph 4(g)(ii) below.
c. The Debentures are redeemable, in whole or in part, at the option
of the Debenture Issuer, on or after [ ] 200[ ], at a Redemption Price
equal to [ ]% of the principal amount per Debenture, plus, in each case,
accrued and unpaid interest thereon at the date of the redemption for the
Debentures.
d. If, at any time, a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event") shall occur and be continuing, the
Debenture Issuer shall have the right, upon not less than 30 nor more than 60
days notice, to redeem the Debentures in whole or in part, for cash within 90
days following the occurrence of such Special Event, at a Redemption Price equal
to [ ]%
A-4
<PAGE>
of the principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption and, following such redemption,
Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed shall be redeemed by the Trust
at the Redemption Price on a Pro Rata basis in accordance with paragraph 8
hereof. The Common Securities will be redeemed Pro Rata with the Preferred
Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities will have priority over the Common
Securities with respect to payment of the Redemption Price.
e. The following terms used herein shall be defined as follows:
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act that, as a result of the occurrence
of a change in law or regulation or a written change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be registered under the Investment Company Act,
which Change in 1940 Act Law becomes effective on or after the date of the
Prospectus Supplement.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that on or after the date of the Prospectus Supplement, as
a result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority therefore or therein, or (b) any
amendment to, or change in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after the date of the Prospectus
Supplement, there is more than an insubstantial risk that (i) the Trust is or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of taxes, duties or other governmental charges, or
(iii) interest payable by the Debenture Issuer to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible, in whole or
in part, by the Debenture Issuer for United States federal income tax purposes.
A-5
<PAGE>
f. The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all [ ] Distribution periods terminating on or
before the date of redemption.
g. In the event that the Sponsor makes the election referred to
in Section 8.1(a)(v) of the Declaration, the Regular Trustees shall dissolve
the Trust and, after paying or making reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, cause Debentures, held by the Property Trustee, having an
aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on and having the same record date for payment, as the
Securities, to be distributed to the Holders of the Securities in liquidation
of such Holders' interests in the Trust on a Pro Rata basis in accordance
with paragraph 8 hereof. On and from the date fixed by the Regular Trustees
for any distribution of Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The Depository
Trust Company (the "Depository") or its nominee (or any successor Clearing
Agency or its nominee), as the record Holder of the Preferred Securities,
will receive a registered global certificate or certificates representing the
Debentures and the Debenture Guarantee to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing Preferred Securities held by the Depository or its nominee (or
any successor Clearing Agency or its nominee), will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Securities until such certificates
are presented to the Debenture Issuer or its agent for transfer or reissue.
If the Debentures are distributed to Holders of the Securities, pursuant to
the terms of the Indenture, the Debenture Issuer will use its best efforts to
have the Debentures listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
h. REDEMPTION OR DISTRIBUTION PROCEDURES.
i. Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for
A-6
<PAGE>
redemption of the Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to
this paragraph 4(h)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed, by first-class mail, postage
prepaid, to Holders of Securities. Each Redemption/Distribution Notice shall
be addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
ii. In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed will be redeemed
Pro Rata from each Holder of Securities, it being understood that, in respect
of Preferred Securities registered in the name of and held of record by DTC
(or any successor Clearing Agency) or any other nominee, the distribution of
the proceeds of such redemption will be made to each Clearing Agency
Participant (or person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.
iii. If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice which notice may only be issued if the
Debentures are redeemed as set out in this paragraph 4 (which notice will be
irrevocable) then (A) while the Preferred Securities are in book-entry only
form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will deposit
irrevocably with the Depository (or successor Clearing Agency) funds
sufficient to pay the Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) if the Preferred Securities are issued in definitive
form, with respect to the Preferred Securities, and with respect to the
Common Securities, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Property Trustee will pay the Redemption
Price to the Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accrue on the Securities so called
for redemption and all
A-7
<PAGE>
rights of Holders of such Securities so called for redemption will cease,
except the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities which have been so called for
redemption. If any date fixed for redemption of Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of Securities is improperly withheld or refused
and not paid either by the Property Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue, from the original redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
iv. Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or if Definitive
Preferred Security Certificates have been issued, to the Holder thereof, and
(B) in respect of the Common Securities to the Holder thereof.
v. Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided the
acquiror is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
5. VOTING RIGHTS - PREFERRED SECURITIES.
a. Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
b. Subject to the requirements of the second to last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the
Preferred Securities voting separately as a class may direct the time,
method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or
A-8
<PAGE>
exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, and place of
conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waiving any past default and its consequences
that is waivable under Section 6.06 of the Indenture, or (iii) exercising any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable, PROVIDED, HOWEVER, that where a consent
under the Indenture would require the consent or act of the Holders greater
than a majority in principal amount of Debentures affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take such
action at the direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Debenture Trustee as set
forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel
to the effect that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on account of such
action. If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Preferred Securities may institute a legal
proceeding directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing with respect
to the Preferred Securities and such event is attributable to the failure of
the Debenture Issuer or the Sponsor to pay interest, premium, if any, or
principal on the Debentures on the date such interest, premium, if any, or
principal is otherwise payable (or in the case of redemption, on the
redemption date), then a holder of Preferred Securities may institute a
Direct Action for enforcement of payment to such holder of the principal of,
premium, if any, or interest on, Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such
holder on or after the respective due date specified in the Debentures.
Notwithstanding any payments made to such Holder of Preferred Securities by
the Debenture Issuer or the Debenture Guarantor in connection with a Direct
Action, the Debenture Issuer and the Debenture Guarantor shall remain
obligated to pay the principal of, premium, if any, and interest on the
Debentures held by the Trust or the Property Trustee, and the Debenture
Issuer and the Debenture Guarantor shall be subrogated to the rights of the
Holder of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any
A-9
<PAGE>
payment made by the Debenture Issuer or the Debenture Guarantor, as the case
may be, to such Holder in any Direct Action.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Preferred Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor, or by any entity directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
6. VOTING RIGHTS - COMMON SECURITIES.
a. Except as provided under paragraphs 6(b), 6(c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
b. The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
c. Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common
A-10
<PAGE>
Securities voting separately as a class may direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee
under the Declaration, including (i) directing the time, method, place of
conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waiving any past default and its consequences
that is waivable under Section 6.06 of the Indenture, or (iii) exercising any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable, PROVIDED, HOWEVER, that where a consent
or action under the Indenture would require the consent or act of the Holders
of greater than a majority in principal amount of Debentures affected thereby
(a "Super Majority"), the Property Trustee may only give such consent or take
such action at the direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this paragraph 6(c), the Property Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Common Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Property Trustee fails to enforce its
rights under the Declaration, any Holder of Common Securities may institute a
legal proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Property Trustee or any other Person. Notwithstanding
the foregoing, if an Event of Default has occurred and is continuing with
respect to the Common Securities and such event is attributable to the
failure of the Debenture Issuer or the Sponsor to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a holder of
Common Securities may institute a proceeding for enforcement of payment to
such holder of the principal of, or interest on, Debentures having a
principal amount equal to the aggregate liquidation amount of the Common
Securities of such holder on or after the respective due date specified in
the Debentures.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
A-11
<PAGE>
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE.
a. In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities
as a class, will be entitled to vote on such amendment or proposal (but not
on any other amendment or proposal) and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a Majority
in liquidation amount of the Securities, voting together as a single class;
PROVIDED, HOWEVER, that if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
b. In the event the consent of the Property Trustee as the holder
of the Debentures and the Debenture Guarantee is required under the Indenture
with respect to any amendment, modification or termination of the Indenture,
the Debentures or the Debenture Guarantee, the Property Trustee shall request
the direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in
liquidation amount of the Securities voting together
A-12
<PAGE>
as a single class; PROVIDED, HOWEVER, that where a consent under the
Indenture would require the consent of the Holders of greater than a majority
in aggregate principal amount of the Debentures (a "Super Majority"), the
Property Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; PROVIDED, FURTHER, that the Property Trustee shall
not take any action in accordance with the directions of the Holders of the
Securities under this paragraph 7(b) unless the Property Trustee has been
furnished an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other
than a grantor trust on account of such action.
8. PRO RATA.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default under the Indenture has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Preferred Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities
held by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
9. RANKING.
The Preferred Securities rank PARI PASSU and payment thereon shall
be made Pro Rata with the Common Securities except that where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities.
A-13
<PAGE>
10. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional Securities.
12. MISCELLANEOUS.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written
request to the Trust at its principal place of business.
A-14
<PAGE>
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depository") or a nominee of the Depository. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depository or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred 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.]
Certificate Number Number of Preferred Securities
CUSIP NO.__________
Certificate Evidencing Preferred Securities
of
MEDIAONE FINANCE TRUST [ ]
[ ]% Preferred Securities.
(liquidation amount $[ ] per Preferred Security)
A-15
<PAGE>
MEDIAONE FINANCE TRUST [ ], a business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that ______________
(the "Holder") is the registered owner of Preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the [ ]% Preferred Securities (liquidation amount $[ ] per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of [ ], 199[ ], as the same may be amended from time to time (the
"Declaration") including the designation of the terms of the Preferred
Securities as set forth in Exhibit A to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
A-16
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of _____________, 199__.
as Trustee
as Trustee
--------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A-17
<PAGE>
ANNEX II
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
MEDIAONE FINANCE TRUST [ ]
[ ] Common Securities.
(liquidation amount $[ ] per Common Security)
MEDIAONE FINANCE TRUST [ ], a business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
_______ (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the [ ]% Common Securities (liquidation amount $[ ] per
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of [ ], 199[ ], as the same may be amended from time to
time (the "Declaration") including the designation of the terms of the Common
Securities as set forth in Exhibit A to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Common Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A-18
<PAGE>
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A-19
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of _____________, 199__.
as Trustee
as Trustee
-------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A-20
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
C-1
<PAGE>
MEDIAONE GROUP FUNDING, INC.,
Issuer
U S WEST, INC.
(to be renamed "MEDIAONE GROUP, INC.")
Guarantor
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
-----------------------------
INDENTURE
Dated as of June 12, 1998
-----------------------------
Guaranteed Subordinated Debt Securities
<PAGE>
CROSS-REFERENCE TABLE (*)
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
- ------------------- ----------
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.09
310(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.08
7.10
310(c) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.13(a)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.13(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . 5.01
5.02(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . 5.02(b)
312(c) . . . . . . . . . . . . . . . . . . . . . . . . 5.02(c)
313(a) . . . . . . . . . . . . . . . . . . . . . . . . 5.04(a)
313(b) . . . . . . . . . . . . . . . . . . . . . . . . 5.04(b)
313(c) . . . . . . . . . . . . . . . . . . . . . . . . 5.04(a)
5.04(b)
313(d) . . . . . . . . . . . . . . . . . . . . . . . . 5.04(c)
314(a) . . . . . . . . . . . . . . . . . . . . . . . . 5.03
314(b) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . 13.06
314(d) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . 13.06
314(f) . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
7.02
315(b) . . . . . . . . . . . . . . . . . . . . . . . . 6.07
315(c) . . . . . . . . . . . . . . . . . . . . . . . . 7.01
315(d) . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
7.01(c)
315(e) . . . . . . . . . . . . . . . . . . . . . . . . 6.07
316(a) . . . . . . . . . . . . . . . . . . . . . . . . 6.06
8.04
316(b) . . . . . . . . . . . . . . . . . . . . . . . . 6.04
316(c) . . . . . . . . . . . . . . . . . . . . . . . . 8.01
317(a) . . . . . . . . . . . . . . . . . . . . . . . . 6.02
317(b) . . . . . . . . . . . . . . . . . . . . . . . . 4.03
318(a) . . . . . . . . . . . . . . . . . . . . . . . . 13.08
</TABLE>
- -------------------
(*) This Cross-Reference Table does not constitute part of the Indenture and
shall not have any bearing on the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS (*)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I.
DEFINITIONS
SECTION 1.01. Definitions of Terms . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent. . . . . . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . . . . . 3
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Governmental Obligations. . . . . . . . . . . . . . . . . . . . . . . 4
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
"herein", "hereof" and "hereunder . . . . . . . . . . . . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security. . . . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Securities. . . . . . . . . . . . . . . . . . . . . . . . . 6
Preferred Securities Guarantee. . . . . . . . . . . . . . . . . . . . 6
Property Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
- -------------------
(*) This Table of Contents does not constitute part of the Indenture and shall
not have any bearing upon the interpretation of any of its terms or
provisions.
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securityholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
MediaOne Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Voting Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.01. Designation and Terms of Securities. . . . . . . . 8
SECTION 2.02. Form of Securities and Trustee's Certificate . . . 10
SECTION 2.03. Denominations: Provisions for Payment . . . . . . 10
SECTION 2.04. Execution and Authentications. . . . . . . . . . . 13
SECTION 2.05. Registration of Transfer and Exchange. . . . . . . 14
SECTION 2.06. Temporary Securities . . . . . . . . . . . . . . . 15
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities. . 16
SECTION 2.08. Cancellation . . . . . . . . . . . . . . . . . . . 17
SECTION 2.09. Benefits of Indenture. . . . . . . . . . . . . . . 17
SECTION 2.10. Authenticating Agent . . . . . . . . . . . . . . . 18
SECTION 2.11. Global Securities. . . . . . . . . . . . . . . . . 18
SECTION 2.12. Unconditional Guarantees . . . . . . . . . . . . . 20
SECTION 2.13. Execution of Guarantee . . . . . . . . . . . . . . 21
SECTION 2.14. Assumption by Guarantor. . . . . . . . . . . . . . 22
ARTICLE III.
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. Redemption . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.02. Notice of Redemption . . . . . . . . . . . . . . . 23
SECTION 3.03. Payment Upon Redemption. . . . . . . . . . . . . . 24
SECTION 3.04. Sinking Fund . . . . . . . . . . . . . . . . . . . 25
SECTION 3.05. Satisfaction of Sinking Fund Payments with
Debt Securities. . . . . . . . . . . . . . . . . . 25
SECTION 3.06. Redemption of Debt Securities for Sinking Fund . . 26
ARTICLE IV.
SECTION 4.01. Payment of Principal, Premium and Interest . . . . 26
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 4.02. Maintenance of Office or Agency. . . . . . . . . . 26
SECTION 4.03. Paying Agents. . . . . . . . . . . . . . . . . . . 27
SECTION 4.04. Appointment to Fill Vacancy in Office of Trustee . 28
SECTION 4.05. Compliance with Consolidation Provisions . . . . . 28
SECTION 4.06. Limitation on Dividends; Transactions with
Affiliates . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.07. Covenants as to MediaOne Trusts. . . . . . . . . . 29
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. Company to Furnish Trustee Names and Addresses of
Securityholders. . . . . . . . . . . . . . . . . . 30
SECTION 5.02. Preservation Of Information; Communications With
Securityholders. . . . . . . . . . . . . . . . . . 30
SECTION 5.03. Reports by the Guarantor . . . . . . . . . . . . . 31
SECTION 5.04. Reports by the Trustee . . . . . . . . . . . . . . 31
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default. . . . . . . . . . . . . . . . . 32
SECTION 6.02. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . 35
SECTION 6.03. Application of Moneys Collected. . . . . . . . . . 37
SECTION 6.04. Limitation on Suits. . . . . . . . . . . . . . . . 37
SECTION 6.05. Rights and Remedies Cumulative; Delay or Omission
Not Waiver . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.06. Control by Securityholders . . . . . . . . . . . . 39
SECTION 6.07. Undertaking to Pay Costs . . . . . . . . . . . . . 39
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities of Trustee . . 40
SECTION 7.02. Certain Rights of Trustee. . . . . . . . . . . . . 42
SECTION 7.03. Trustee Not Responsible for Recitals or Issuance or
Securities . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.04. May Hold Securities. . . . . . . . . . . . . . . . 44
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 7.05. Moneys Held in Trust . . . . . . . . . . . . . . . 44
SECTION 7.06. Compensation and Reimbursement . . . . . . . . . . 44
SECTION 7.07. Reliance on Officers' Certificate. . . . . . . . . 45
SECTION 7.08. Disqualification; Conflicting Interests. . . . . . 45
SECTION 7.09. Corporate Trustee Required; Eligibility. . . . . . 45
SECTION 7.10. Resignation and Removal; Appointment of Successor. 46
SECTION 7.11. Acceptance of Appointment By Successor . . . . . . 48
SECTION 7.12. Merger, Conversion, Consolidation or Succession
to Business. . . . . . . . . . . . . . . . . . . . 49
SECTION 7.13. Preferential Collection of Claims Against the Company 50
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. Evidence of Action by Securityholders. . . . . . . 50
SECTION 8.02. Proof of Execution by Securityholders. . . . . . . 51
SECTION 8.03. Who May be Deemed Owners . . . . . . . . . . . . . 51
SECTION 8.04. Certain Securities Owned by Company or Guarantor
Disregarded. . . . . . . . . . . . . . . . . . . . 52
SECTION 8.05. Actions Binding on Future Securityholders. . . . . 52
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without the Consent of
Securityholders. . . . . . . . . . . . . . . . . . 53
SECTION 9.02. Supplemental Indentures With Consent of
Securityholders. . . . . . . . . . . . . . . . . . 54
SECTION 9.03. Effect of Supplemental Indentures. . . . . . . . . 55
SECTION 9.04. Securities Affected by Supplemental Indentures . . 55
SECTION 9.05. Execution of Supplemental Indentures . . . . . . . 55
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.01. Company or Guarantor May Consolidate, Etc. . . . . 56
SECTION 10.02. Successor Corporation Substituted. . . . . . . . . 57
SECTION 10.03. Evidence of Consolidation, Etc. to Trustee . . . . 58
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture. . . . . . 58
SECTION 11.02. Discharge of Obligations . . . . . . . . . . . . . 59
SECTION 11.03. Deposited Moneys to be Held in Trust . . . . . . . 59
SECTION 11.04. Payment of Moneys Held by Paying Agents. . . . . . 60
SECTION 11.05. Repayment to Company . . . . . . . . . . . . . . . 60
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01. No Recourse. . . . . . . . . . . . . . . . . . . . 60
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01. Effect on Successors and Assigns . . . . . . . . . 61
SECTION 13.02. Actions by Successor . . . . . . . . . . . . . . . 61
SECTION 13.03. Surrender of Company Powers. . . . . . . . . . . . 62
SECTION 13.04. Notices. . . . . . . . . . . . . . . . . . . . . . 62
SECTION 13.05. Governing Law. . . . . . . . . . . . . . . . . . . 62
SECTION 13.06. Treatment of Debt Securities as Debt . . . . . . . 62
SECTION 13.07. Compliance Certificates and Opinions . . . . . . . 62
SECTION 13.08. Payments on Business Days. . . . . . . . . . . . . 63
SECTION 13.09. Conflict with Trust Indenture Act. . . . . . . . . 63
SECTION 13.10. Counterparts . . . . . . . . . . . . . . . . . . . 63
SECTION 13.11. Separability . . . . . . . . . . . . . . . . . . . 64
SECTION 13.12. Assignment . . . . . . . . . . . . . . . . . . . . 64
SECTION 13.13. Acknowledgement of Rights. . . . . . . . . . . . . 64
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE XIV.
SUBORDINATION OF SECURITIES
SECTION 14.01. Subordination Terms. . . . . . . . . . . . . . . . 65
</TABLE>
vi
<PAGE>
INDENTURE, dated as of June 12, 1998, among MediaOne Group Funding,
Inc., a Delaware corporation (the "Company"), U S WEST, Inc., a Delaware
corporation to be renamed "MediaOne Group, Inc." (the "Guarantor"), and
Norwest Bank Minnesota, National Association, a national banking association,
as trustee (the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured subordinated debt secu-rities (hereinafter referred to
as the "Debt Securities"), in an unlimited aggregate principal amount to be
issued from time to time in one or more series as in this Indenture provided,
as registered Debt Securities without coupons, to be authenticated by the
certificate of the Trustee;
WHEREAS, for its lawful corporate purposes, the Guarantor has duly
authorized the execution and delivery of this Indenture and deems it
appropriate from time to time to issue its guarantee of the Securities on the
terms herein provided (the "Guarantees" and, together with the Debt
Securities, the "Securities");
WHEREAS, to provide the terms and conditions upon which the Debt
Securities are to be authenticated, issued and delivered, the Company has
duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company and the Guarantor, in accordance with its terms,
have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed
as follows for the equal and ratable benefit of the holders of Securities:
ARTICLE I.
DEFINITIONS
SECTION 1.01. DEFINITIONS OF TERMS.
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for
all purposes of this Indenture and of any indenture supplemental hereto shall
have the respective meanings
<PAGE>
specified in this Section and shall include the plural as well as the
singular. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939, as amended, or that are by reference in such Act
defined in the Securities Act of 1933, as amended (except as herein otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.
"Affiliate" means, with respect to a specified Person, (a) any
Person directly or indirectly owning, controlling or holding with power to
vote 10% or more of the outstanding voting securities or other ownership
interests of the specified Person, (b) any Person 10% or more of whose
outstanding voting securities or other ownership interests are directly or
indirectly owned, controlled or held with power to vote by the specified
Person, (c) any Person directly or indirectly controlling, controlled by, or
under common control with the specified Person, (d) a partnership in which
the specified Person is a general partner, (e) any officer or director of the
specified Person, and (f) if the specified Person is an individual, any
entity of which the specified Person is an officer, director or general
partner.
"Authenticating Agent" means an authenticating agent with respect to
all or any of the series of Securities appointed with respect to all or any
series of the Securities by the Trustee pursuant to Section 2.10.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
the Guarantor, as the case may be, or any duly authorized committee of such
Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or Guarantor, as the case
may be, to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.
"Business Day" means, with respect to any series of Securities, any
day other than a day on which Federal or State banking institutions in the
Borough of Manhattan, The City of New York, are authorized or obligated by
law, executive order or regulation to close.
2
<PAGE>
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer
of the Company or the Guarantor, as the case may be. The Certificate need
not comply with the provisions of Section 13.06.
"Common Securities" means undivided beneficial interests in the
assets of a MediaOne Trust which rank pari passu with Preferred Securities
issued by such MediaOne Trust; PROVIDED, HOWEVER, that upon the occurrence of
an Event of Default, the rights of holders of Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred Securities.
"Common Securities Guarantee" means any guarantee that the Guarantor
may enter into with The First National Bank of Chicago or other Persons that
operate directly or indirectly for the benefit of holders of Common
Securities of such MediaOne Trust.
"Company" means MediaOne Group Funding, Inc., a corporation duly
organized and existing under the laws of the State of Delaware, and, subject
to the provisions of Article Ten, shall also include its successors and
assigns.
"Corporate Trust Office" means the office of the Trustee at which,
at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 6th Street &
Marquette Avenue, Minneapolis, Minnesota 55479-0069, Attention: Corporate
Trust Services Division, except that whenever a provision herein refers to an
office or agency of the Trustee in the Borough of Manhattan, The City of New
York, such office is located, at the date hereof, at 55 Water Street, New
York, New York 10041.
"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Declaration", with respect to a MediaOne Trust, means the Amended
and Restated Declaration of Trust of such MediaOne Trust.
"Debt Securities" means the Debt Securities authenticated and
delivered under this Indenture.
3
<PAGE>
"Default" means any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Depositary" means, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or
other applicable statute or regulation, which, in each case, shall be
designated by the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" means, with respect to Securities of a particular
series any event specified in Section 6.01, continued for the period of time,
if any, therein designated.
"Global Security" means, with respect to any series of Securities, a
Security executed by the Company and delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary
or its nominee.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit 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 payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America that, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such Governmental Obligation or a specific payment of
principal of or interest on any such Governmental Obligation held by such
custodian for the account of the holder of such depositary receipt; PROVIDED,
HOWEVER, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the
Governmental Obligation or the specific payment of principal of or interest
on the Governmental Obligation evidenced by such depositary receipt.
"Guarantee" means the agreement of the Guarantor, in the form set
forth in Section 2.12 hereof, to be endorsed on the Debt Securities
authenticated and delivered under this Indenture.
4
<PAGE>
"Guarantor" means U S WEST, Inc., a corporation duly organized and
existing under the laws of the State of Delaware to be renamed "MediaOne
Group, Inc.," and, subject to the provisions of Article Ten, shall also
include its successors and assigns.
"herein", "hereof" and "hereunder", and other words of similar
import, refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date", when used with respect to any installment
of interest on a Debt Security of a particular series, means the date
specified in such Debt Security or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Debt Securities of that series is due
and payable.
"Officers' Certificate" means a certificate signed by the President
or a Vice President and by the Treasurer or an Assistant Treasurer or the
Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company or the Guarantor, as the case may be, that is
delivered to the Trustee in accordance with the terms hereof. Each such
certificate shall include the statements provided for in Section 13.06, if
and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel,
who may be an employee of or counsel for the Company or the Guarantor, as the
case may be, that is delivered to the Trustee in accordance with the terms
hereof. Each such opinion shall include the statements provided for in
Section 13.06, if and to the extent required by the provisions thereof.
"Outstanding", when used with reference to Debt Securities of any
series, means, subject to the provisions of Section 8.04, as of any
particular time, all Debt Securities of that series theretofore authenticated
and delivered by the Trustee under this Indenture, except (a) Debt Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previously been
canceled; (b) Debt Securities or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the necessary
amount shall have been
5
<PAGE>
deposited in trust with the Trustee or with any paying agent (other than the
Company) or shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); PROVIDED, HOWEVER, that
if such Debt Securities or portions of such Debt Securities are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as in Article Three provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and (c) Debt Securities
in lieu of or in substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.07.
"Person" means any individual, corporation, partnership,
joint-venture, joint-stock company, unincorporated organization or government
or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt and guarantee
as that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.07 in
lieu of a lost, destroyed or stolen Security shall be deemed to evidence the
same debt as the lost, destroyed or stolen Security.
"Preferred Securities" means undivided beneficial interests in the
assets of a MediaOne Trust which rank pari passu with Common Securities
issued by such MediaOne Trust; PROVIDED, HOWEVER, that upon the occurrence of
an Event of Default, the rights of holders of Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the
Guarantor may enter into with The First National Bank of Chicago or other
Persons that operate directly or indirectly for the benefit of holders of
Preferred Securities of such MediaOne Trust.
"Property Trustee" means the entity performing the functions of the
Property Trustee of a MediaOne Trust under the applicable Declaration of such
MediaOne Trust.
"Responsible Officer" when used with respect to the Trustee means
the Chairman of the Board of Directors, the President, any Vice President,
the Secretary, the Treasurer, any trust officer, any corporate trust officer
or any other officer
6
<PAGE>
or assistant officer of the Trustee customarily performing functions similar
to those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of
his or her knowledge of and familiarity with the particular subject.
"Securities" means any Debt Securities with a Guarantee endorsed
thereon.
"Securityholder", "holder of Securities", "registered holder", or
other similar term, means the Person or Persons in whose name or names a
particular Security shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
"Subsidiary" means, with respect to any Person, (i) any corporation
at least a majority of whose outstanding Voting Stock shall at the time be
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.
"Trustee" means Norwest Bank Minnesota, National Association, and,
subject to the provisions of Article Seven, shall also include its successors
and assigns, and, if at any time there is more than one Person acting in such
capacity hereunder, "Trustee" shall mean each such Person. The term
"Trustee" as used with respect to a particular series of the Securities shall
mean the trustee with respect to that series.
"Trust Indenture Act", means the Trust Indenture, subject to the
provisions of Sections 9.01, 9.02, and 10.01, as in effect at the date of
execution of this instrument.
"Trust Securities" means Common Securities and Preferred Securities.
"MediaOne Trust" means each of MediaOne Finance Trust I, MediaOne
Finance Trust II and MediaOne Finance Trust III, each, a Delaware business
trust.
"Voting Stock", as applied to stock of any Person, means shares,
interests, participations or other equivalents in
7
<PAGE>
the equity interest (however designated) in such Person having ordinary
voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
ARTICLE II.
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF SECURITIES
SECTION 2.01. DESIGNATION AND TERMS OF SECURITIES.
(a) The aggregate principal amount of Debt Securities that may be
authenticated and delivered under this Indenture is unlimited. The Debt
Securities may be issued in one or more series up to the aggregate principal
amount of Debt Securities of that series from time to time authorized by or
pursuant to a Board Resolution of the Company or pursuant to one or more
indentures supplemental hereto. Prior to the initial issuance of Debt
Securities of any series, there shall be established in or pursuant to a
Board Resolution of the Company, and set forth in an Officers' Certificate of
the Company, or established in one or more indentures supplemental hereto:
(1) the title of the Debt Security of the series (which
shall distinguish the Debt Securities of the series from all other Debt
Securities);
(2) any limit upon the aggregate principal amount of the
Debt Securities of that series that may be authenticated and delivered
under this Indenture (except for Debt Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Debt Securities of that series);
(3) the date or dates on which the principal of the Debt
Securities of the series is payable;
(4) the rate or rates at which the Debt Securities of the
series shall bear interest or the manner of calculation of such rate or
rates, if any;
(5) the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest will be payable or the
manner of determination of such Interest Payment Dates and the record
date for the deter-
8
<PAGE>
mination of holders to whom interest is payable on any such Interest
Payment Dates;
(6) the right, if any, to extend the interest payment
periods and the duration of such extension;
(7) the period or periods within which, the price or prices
at which and the terms and conditions upon which, Debt Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(8) the obligation, if any, of the Company to redeem or
purchase Debt Securities of the series pursuant to any sinking fund or
analogous provisions (including payments made in cash in participation
of future sinking fund obligations) or at the option of a holder thereof
and the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Debt Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) the subordination terms of the Debt Securities of the series;
(10) the form of the Debt Securities of the series including
the form of the Certificate of Authentication for such series;
(11) if other than denominations of twenty-five U.S. dollars
($25) or any integral multiple thereof, the denominations in which the
Debt Securities of the series shall be issuable;
(12) any and all other terms with respect to such series
(which terms shall not be inconsistent with the terms of this Indenture)
including any terms which may be required by or advisable under United
States laws or regulations or advisable in connection with the marketing
of Debt Securities of that series; and
(13) whether the Debt Securities are issuable as a Global
Security and, in such case, the identity for the Depositary for such
series.
All Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
in or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
9
<PAGE>
If any of the terms of the series are established by action taken
pursuant to a Board Resolution of the Company, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate of the Company setting forth the terms
of the series.
(b) Prior to the issuance of any of the Guarantees, the exact form
and terms of such Guarantees, which shall comply with the terms of Section
2.12 hereof and contain such additional terms as are permitted by this
Indenture, shall be established by an Officers' Certificate of the Guarantor
or in an indenture supplemental hereto.
SECTION 2.02. FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE.
The Securities of any series and the Trustee's certificate of
authentication to be borne by such Securities shall be substantially of the
tenor and purport as set forth in one or more indentures supplemental hereto
or as provided in a Board Resolution of the Company and as set forth in an
Officers' Certificate of the Company and the Guarantor, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions
of this Indenture, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which Securities of that series may be listed, or to
conform to usage.
SECTION 2.03. DENOMINATIONS: PROVISIONS FOR PAYMENT.
The Securities shall be issuable as registered Securities and in the
denominations of twenty-five U.S. dollars ($25) or any integral multiple
thereof, subject to Section 2.01(10). The Securities of a particular series
shall bear interest payable on the dates and at the rate specified with
respect to that series. The principal of and the interest on the Securities
of any series, as well as any premium thereon in case of redemption thereof
prior to maturity, shall be payable in the coin or currency of the United
States of America that at the time is legal tender for public and private
debt, at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, the City and State of New York. Each Security
shall be dated the date of its authentication. Interest on the Securi-
10
<PAGE>
ties shall be computed on the basis of a 360-day year composed of twelve
30-day months.
The interest installment on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the Person in whose name said
Security (or one or more Predecessor Securities) is registered at the close
of business on the regular record date for such interest installment. In the
event that any Security of a particular series or portion thereof is called
for redemption and the redemption date is subsequent to a regular record date
with respect to any Interest Payment Date and prior to such Interest Payment
Date, interest on such Security will be paid upon presentation and surrender
of such Security as provided in Section 3.03.
Any interest on any Security that is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Security of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by
virtue of having been such holder; and such Defaulted Interest shall be paid
by the Company, at its election, as provided in clause (1) or clause (2)
below:
(1) The Company may make payment of any Defaulted Interest on
Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Security and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall
make arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall not be more than 15 nor less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall
11
<PAGE>
promptly notify the Company of such special record date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Security
Register (as hereinafter defined), not less than 10 days prior to
such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record date
and shall be no longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
any Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustees of the
proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution of the Company or
one or more indentures supplemental hereto establishing the terms of any
series of Securities pursuant to Section 2.01 hereof, the term "regular
record date" as used in this Section with respect to a series of Securities
with respect to any Interest Payment Date for such series shall mean either
the fifteenth day of the month immediately preceding the month in which an
Interest Payment Date established for such series pursuant to Section 2.01
hereof shall occur, if such Interest Payment Date is the first day of a
month, or the last day of the month immediately preceding the month in which
an Interest Payment Date established for such series pursuant to Section 2.01
hereof shall occur, if such Interest Payment Date is the fifteenth day of a
month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Security
of a series delivered under this Indenture upon transfer of or in exchange
for or in lieu of any other Security of such series shall carry the rights to
interest accrued and unpaid, and to accrue, that were carried by such other
Security.
12
<PAGE>
SECTION 2.04. EXECUTION AND AUTHENTICATIONS.
The Debt Securities shall be signed on behalf of the Company by, and
the Guarantees endorsed thereon shall be signed on behalf of the Guarantor
by, its President, or one of its Vice Presidents, or its Treasurer, or one of
its Assistant Treasurers, or its Secretary, or one of its Assistant
Secretaries, under its corporate seal attested by its Secretary or one of its
Assistant Secretaries. Signatures may be in the form of a manual or
facsimile signature. The Company and the Guarantor may use the facsimile
signature of any Person who shall have been a President or Vice President
thereof, or of any Person who shall have been a Secretary or Assistant
Secretary thereof, notwithstanding the fact that at the time the Securities
shall be authenticated and delivered or disposed of such Person shall have
ceased to be the President or a Vice President, or the Secretary or an
Assistant Secretary, of the Company or the Guarantor, as the case may be.
The seal of the Company and the Guarantor may be in the form of a facsimile
of such seal and may be impressed, affixed, imprinted or otherwise reproduced
on the Securities. The Securities may contain such notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security
shall be dated the date of its authentication by the Trustee.
A Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is
entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed
by the Company and the Guarantor to the Trustee for authentication, together
with a written order of the Company for the authentication and delivery of
such Securities, signed by its President or any Vice President and its
Secretary or any Assistant Secretary, and the Trustee in accordance with such
written order shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
13
<PAGE>
The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.05. REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Securities of any series may be exchanged upon presentation
thereof at the office or agency of the Company designated for such purpose in
the Borough of Manhattan, the City and State of New York, for other
Securities of such series of authorized denominations, and for a like
aggregate principal amount, upon payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, all as provided in this
Section. In respect of any Securities so surrendered for exchange, the
Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in exchange therefor the Security or Securities of the
same series that the Securityholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a
register or registers (herein referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the
Company shall register the Securities and the transfers of Securities as in
this Article provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of registering
Securities and transfer of Securities as herein provided shall be appointed
as authorized by Board Resolution (the "Security Registrar").
Upon surrender for transfer of any Security at the office or agency
of the Company designated for such purpose, the Company shall execute, the
Trustee shall authenticate and such office or agency shall deliver in the
name of the transferee or transferees a new Security or Securities of the
same series as the Security presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or registration
of transfer, as provided in this Section, shall be accompanied (if so
required by the Company or the Security Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Security
Registrar, duly
14
<PAGE>
executed by the registered holder or by such holder's duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Securities, or issue of new Securities in case of
partial redemption of any series, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, the second paragraph
of Section 3.03 and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Securities during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of less than all the Outstanding Securities of the same series and
ending at the close of business on the day of such mailing, nor (ii) to
register the transfer of or exchange any Securities of any series or portions
thereof called for redemption. The provisions of this Section 2.05 are, with
respect to any Global Security, subject to Section 2.11 hereof.
SECTION 2.06. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company and the Guarantor may execute, and the Trustee shall authenticate and
deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company. Every
temporary Security of any series shall be executed by the Company and the
Guarantor and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities of such series. Without unnecessary delay the Company and the
Guarantor will execute and will furnish definitive Securities of such series
and thereupon any or all temporary Securities of such series may be
surrendered in exchange therefor (without charge to the holders), at the
office or agency of the Company designated for the purpose in the Borough of
Manhattan, the City and State of New York, and the Trustee shall authenticate
and such office or agency shall deliver in exchange for such temporary
Securities an equal aggregate principal amount of definitive Securities of
such series, unless the Company advises the Trustee to the effect that
definitive Securities need not be executed and furnished until
15
<PAGE>
further notice from the Company. Until so exchanged, the temporary
Securities of such series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series authenticated and delivered
hereunder.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES.
In case any temporary or definitive Security shall become mutilated
or be destroyed, lost or stolen, the Company and the Guarantor (subject to
the next succeeding sentence) shall execute, and upon the Company's request
the Trustee (subject as aforesaid) shall authenticate and deliver, a new
Security of the same series, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Security, or in
lieu of and in substitution for the Security so destroyed, lost or stolen.
In every case the applicant for a substituted Security shall furnish to the
Company, the Guarantor and the Trustee such security or indemnity as may be
required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company,
the Guarantor and the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Security and of the ownership
thereof. The Trustee may authenticate any such substituted Security and
deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substituted Security, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Security that has matured or is about to mature shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Security) if the
applicant for such payment shall furnish to the Company, the Guarantor and
the Trustee such security or indemnity as they may require to save them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company, the Guarantor and the Trustee of the
destruction, loss or theft of such Security and of the ownership thereof.
Every replacement Security issued pursuant to the provisions of this
Section shall constitute an additional contractual obligation of the Company
or the Guarantor, as the case may be, whether or not the mutilated,
destroyed, lost or stolen Security shall be found at any time, or be
enforceable by anyone, and shall be entitled to all the benefits of this
16
<PAGE>
Indenture equally and proportionately with any and all other Securities of
the same series duly issued hereunder. All Securities shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
SECTION 2.08. CANCELLATION.
All Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company,
the Guarantor or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it,
and no Securities shall be issued in lieu thereof except as expressly
required or permitted by any of the provisions of this Indenture. On request
of the Company at the time of such surrender, the Trustee shall deliver to
the Company canceled Securities held by the Trustee. In the absence of such
request the Trustee may dispose of canceled Securities in accordance with its
standard procedures and deliver a certificate of disposition to the Company.
If the Company or the Guarantor shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.
SECTION 2.09. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give or be construed to give to any Person, other than the parties
hereto and the holders of the Securities (and, with respect to the provisions
of Article Fourteen, the holders of Senior Indebtedness) any legal or
equitable right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Securities (and, with respect to the
provisions of Article Fourteen, the holders of Senior Indebtedness).
17
<PAGE>
SECTION 2.10. AUTHENTICATING AGENT.
So long as any of the Securities of any series remain Outstanding
there may be an Authenticating Agent for any or all such series of Securities
which the Trustee shall have the right to appoint. Said Authenticating Agent
shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, transfer or partial
redemption thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. All references in this
Indenture to the authentication of Securities by the Trustee shall be deemed
to include authentication by an Authenticating Agent for such series. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a
trust business, and that is otherwise authorized under such laws to conduct
such business and is subject to supervision or examination by Federal or
State authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. GLOBAL SECURITIES.
(a) If the Company shall establish pursuant to Section 2.01 that
the Securities of a particular series are to be issued as a Global Security,
then the Company shall execute and the Trustee shall, in accordance with
Section 2.04, authenticate and deliver, a Global Security that (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series, (ii)
shall be registered in the name of the Depositary or its nominee, (iii)
18
<PAGE>
shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect: "Except as otherwise provided in Section 2.11 of the
Indenture, this Security may be transferred, in whole but not in part, only
to another nominee of the Depositary or to a successor Depositary or to a
nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global
Security of a series may be transferred, in whole but not in part and in the
manner provided in Section 2.05, only to another nominee of the Depositary
for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no
longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, and a successor Depositary for such series
is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be, this
Section 2.11 shall no longer be applicable to the Securities of such series
and the Company will execute, and subject to Section 2.05, the Trustee will
authenticate and deliver the Securities of such series in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security. In addition,
the Company may at any time determine that the Securities of any series shall
no longer be represented by a Global Security and that the provisions of this
Section 2.11 shall no longer apply to the Securities of such series. In such
event the Company and the Guarantor will execute and subject to Section 2.05,
the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global
Security. Upon the exchange of the Global Security for such Securities in
definitive registered form without coupons, in authorized denominations, the
Global Security shall be canceled by the Trustee. Such Securities in
definitive registered form issued in exchange for the Global Security
pursuant to this Section 2.11(c) shall be registered in such names and in
such authorized denominations as the Depositary,
19
<PAGE>
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Securities to the Depositary for delivery to the Persons in whose names such
Securities are so registered.
SECTION 2.12. UNCONDITIONAL GUARANTEES.
(FORM OF GUARANTEE)
FOR VALUE RECEIVED, the Guarantor, hereby unconditionally guarantees
to the holder of the Security upon which this Guarantee is endorsed the due
and punctual payment of the principal of, sinking fund payment, if any,
premium, if any, or interest on said Security, when and as the same shall
become due and payable, whether at maturity, upon redemption or otherwise,
according to the terms thereof and of the Indenture referred to therein.
The Guarantor agrees to determine, at least one business day prior
to the date upon which a payment of principal of, sinking fund payment, if
any, premium, if any, or interest on said Security is due and payable,
whether the Company has available the funds to make such payment as the same
shall become due and payable. In case of the failure of the Company
punctually to pay any such principal, sinking fund payment, if any, premium,
if any, or interest, the Guarantor hereby agrees to cause any such payment to
be made punctually when and as the same shall become due and payable, whether
at maturity, upon redemption, or otherwise, and as if such payment were made
by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Security or said Indenture, the absence
of any action to enforce the same, any waiver or consent by the Holder of
said Security with respect to any provisions thereof, the recovery of any
judgment against the Company or any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge
or defense of a guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to said Security or
indebtedness evidenced thereby, and all demands whatsoever and covenants that
this Guarantee will not be
20
<PAGE>
discharged except by complete performance of the obligations contained in
said Security and in this Guarantee.
The Guarantor shall be subrogated to all rights of the holder of
said Security against the Company in respect of any amounts paid by the
Guarantor pursuant to the provisions of this Guarantee; provided, however,
that the Guarantor shall not, without the consent of the holders of all of
the Securities then outstanding, be entitled to enforce or to receive any
payments arising out of or based upon such right of subrogation until the
principal of and premium, if any, and interest on all Securities shall have
been paid in full or payment thereof shall have been provided for in
accordance with said Indenture.
Notwithstanding anything to the contrary contained herein, if
following any payment of principal or interest by the Company on the
Securities to the holders of the Securities it is determined by a final
decision of a court of competent jurisdiction that such payment shall be
avoided by a trustee in bankruptcy (including any debtor-in-possession) as a
preference under 11 U.S.C. Section 547 and such payment is paid by such
holder to such trustee in bankruptcy, then and to the extent of such
repayment, the obligations of the Guarantor hereunder shall remain in full
force and effect.
This Guarantee shall not be valid or become obligatory for any
purpose with respect to a Security until the certificate of authentication on
such Security shall have been signed by the Trustee (or the Authentication
Agent).
This Guarantee shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, U S WEST, Inc. (to be renamed "MediaOne Group,
Inc.") has caused this Guarantee to be signed in its corporate name by the
facsimile signature of two of its officers thereunto duly authorized and has
caused a facsimile of its corporate seal to be affixed hereunto or imprinted
or otherwise reproduced hereon.
SECTION 2.13. EXECUTION OF GUARANTEE.
To evidence the Guarantee to the Securityholders specified in
Section 2.12, the Guarantor hereby agrees to execute the Guarantees, in
substantially the form above recited, to be endorsed on each Security
authenticated and delivered by the Trustee (or the Authenticating Agent).
Each such Guarantee shall be signed on behalf of the Guarantor as set forth
in Section 2.04
21
<PAGE>
prior to the authentication of the Security on which it is endorsed, and the
delivery of such Security by the Trustee (or the Authenticating Agent), after
the authentication thereof hereunder, shall constitute due delivery of such
Guarantee on behalf of the Guarantor.
SECTION 2.14. ASSUMPTION BY GUARANTOR.
(a) The Guarantor may, without the consent of the Securityholders,
assume all of the rights and obligations of the Company hereunder with
respect to a series of Securities and under the Securities of such series if,
after giving effect to such assumption, no Default or Event of Default shall
have occurred and be continuing. Upon such an assumption, the Guarantor
shall execute a supplemental indenture evidencing its assumption of all such
rights and obligations of the Company and the Company shall be released from
its liabilities hereunder and under such Securities as obligor on the
Securities of such series.
(b) The Guarantor shall assume all of the rights and obligations of
the Company hereunder with respect to a series of Securities and under the
Securities of such series if, upon a default by the Company in the due and
punctual payment of the principal, sinking fund payment, if any, premium, if
any, or interest on such Securities, the Guarantor is prevented by any court
order or judicial proceeding from fulfilling its obligations under Section
2.12 with respect to such series of Securities. Such assumption shall result
in the Securities of such series becoming the direct obligations of the
Guarantor and shall be effected without the consent of the holders of the
Securities of any series. Upon such an assumption, the Guarantor shall
execute a supplemental indenture evidencing its assumption of all such rights
and obligations of the Company, and the Company shall be released from its
liabilities hereunder and under such Securities as obligor on the Securities
of such series.
ARTICLE III.
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. REDEMPTION.
The Company may redeem the Debt Securities of any series issued
hereunder on and after the dates and in accordance
22
<PAGE>
with the terms established for such series pursuant to Section 2.01 hereof.
SECTION 3.02. NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right to
redeem all or, as the case may be, a portion of the Debt Securities of any
series in accordance with the right reserved so to do, the Company shall, or
shall cause the Trustee to, give notice of such redemption to holders of the
Debt Securities of such series to be redeemed by mailing, first class postage
prepaid, a notice of such redemption not less than 30 days and not more than
90 days before the date fixed for redemption of that series to such holders
at their last addresses as they shall appear upon the Security Register
unless a shorter period is specified in the Debt Securities to be redeemed.
Any notice that is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the registered holder
receives the notice. In any case, failure duly to give such notice to the
holder of any Security of any series designated for redemption in whole or in
part, or any defect in the notice, shall not affect the validity of the
proceedings for the redemption of any other Debt Securities of such series or
any other series. In the case of any redemption of Debt Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Debt Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
any such restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Debt Securities of that series
are to be redeemed, and shall state that payment of the redemption price of
such Debt Securities to be redeemed will be made at the office or agency of
the Company in the Borough of Manhattan, the City and State of New York, upon
presentation and surrender of such Debt Securities, that interest accrued to
the date fixed for redemption will be paid as specified in said notice, that
from and after said date interest will cease to accrue and that the
redemption is for a sinking fund, if such is the case. If less than all the
Debt Securities of a series are to be redeemed, the notice to the holders of
Debt Securities of that series to be redeemed in whole or in part shall
specify the particular Debt Securities to be so redeemed. In case any
Security is to be redeemed in part only, the notice that relates to such
Security shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date, upon
surrender of such Security, a
23
<PAGE>
new Security or Debt Securities of such series in principal amount equal to
the unredeemed portion thereof and having endorsed thereon a duly executed
Guarantee will be issued.
(b) If less than all the Debt Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days' notice in
advance of the date fixed for redemption as to the aggregate principal amount
of Debt Securities of the series to be redeemed, and thereupon the Trustee
shall select, by lot or in such other manner as it shall deem appropriate and
fair in its discretion and that may provide for the selection of a portion or
portions (equal to twenty-five U.S. dollars ($25) or any integral multiple
thereof) of the principal amount of such Debt Securities of a denomination
larger than $25, the Debt Securities to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debt Securities
to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the Debt
Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to be given by
the Trustee or any such paying agent, the Company shall deliver or cause to
be delivered to, or permit to remain with, the Trustee or such paying agent,
as the case may be, such Security Register, transfer books or other records,
or suitable copies or extracts therefrom, sufficient to enable the Trustee or
such paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed
as above provided, the Debt Securities or portions of Debt Securities of the
series to be redeemed specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption and interest on such Debt Securities or portions of Debt
Securities shall cease to accrue on and after the date fixed for redemption,
unless the Company shall default in the payment of such redemption price and
accrued interest with respect to any such Security or portion thereof. On
presentation and surrender of such Debt Securities on or after the date fixed
for redemption
24
<PAGE>
at the place of payment specified in the notice, said Debt Securities shall
be paid and redeemed at the applicable redemption price for such series,
together with interest accrued thereon to the date fixed for redemption (but
if the date fixed for redemption is an interest payment date, the interest
installment payable on such date shall be payable to the registered holder at
the close of business on the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Security of such series that is to be
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall
deliver to the holder thereof, at the expense of the Company, a new Security
or Debt Securities of the same series, having endorsed thereon a duly
executed Guarantee, of authorized denominations in principal amount equal to
the unredeemed portion of the Security so presented.
SECTION 3.04. SINKING FUND.
The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable
to any sinking fund for the retirement of Debt Securities of a series, except
as otherwise specified as contemplated by Section 2.01 for Debt Securities of
such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount
provided for by the terms of Debt Securities of any series is herein referred
to as an "optional sinking fund payment". If provided for by the terms of
Debt Securities of any series, the cash amount of any sinking fund payment
may be subject to reduction as provided in Section 3.05. Each sinking fund
payment shall be applied to the redemption of Debt Securities of any series
as provided for by the terms of Debt Securities of such series.
SECTION 3.05. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT
SECURITIES.
The Company (i) may deliver Outstanding Debt Securities of a series
(other than any Debt Securities previously called for redemption) and (ii)
may apply as a credit Debt Securities of a series that have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with
25
<PAGE>
respect to the Debt Securities of such series required to be made pursuant to
the terms of such Debt Securities as provided for by the terms of such
series, PROVIDED that such Debt Securities have not been previously so
credited. Such Debt Securities shall be received and credited for such
purpose by the Trustee at the redemption price specified in such Debt
Securities for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for
any series of Debt Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Debt
Securities of that series pursuant to Section 3.05 and the basis for such
credit and will, together with such Officers' Certificate, deliver to the
Trustee any Debt Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date the Trustee shall select the Debt
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 3.02 and cause notice of the redemption thereof to be
given in the name of and at the expense of the Company in the manner provided
in Section 3.02. Such notice having been duly given, the redemption of such
Debt Securities shall be made upon the terms and in the manner stated in
Section 3.03.
ARTICLE IV.
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Debt Securities of
that series at the time and place and in the manner provided herein and
established with respect to such Debt Securities.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
So long as any series of the Securities remain Outstanding, the
Company agrees to maintain an office or agency in the Borough of Manhattan,
the City and State of New York, with
26
<PAGE>
respect to each such series and at such other location or locations as may be
designated as provided in this Section 4.02, where (i) Securities of that
series may be presented for payment, (ii) Securities of that series may be
presented as hereinabove authorized for registration of transfer and
exchange, and (iii) notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the
Company shall, by written notice signed by its President or a Vice President
and delivered to the trustee, designate some other office or agency for such
purposes or any of them. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, notices
and demands.
SECTION 4.03. PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for all
or any series of the Securities, other than the Trustee, the Company will
cause each such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section:
(1) that it will hold all sums held by it as such agent for
the payment of the principal of (and premium, if any) or interest on
the Securities of that series (whether such sums have been paid to
it by the Company or by any other obligor of such Securities) in
trust for the benefit of the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor of such Securities) to make any
payment of the principal of (and premium, if any) or interest on the
Securities of that series when the same shall be due and payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(2) above, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as
set forth in this Indenture.
27
<PAGE>
(b) If the Company shall act as its own paying agent with respect
to any series of the Securities, it will on or before each due date of the
principal of (and premium, if any) or interest on Securities of that series,
set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and premium, if any)
or interest so becoming due on Securities of that series until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of such action, or any failure (by it or any
other obligor on such Securities) to take such action. Whenever the Company
shall have one or more paying agents for any series of Securities, it will,
prior to each due date of the principal of (and premium, if any) or interest
on any Securities of that series, deposit with the paying agent a sum
sufficient to pay the principal (an premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of this action or
failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i)
the agreement to hold sums in trust as provided in this Section is subject to
the provisions of Section 11.05, and (ii) the Company may at any time, for
the purpose of obtaining the satisfaction and discharge of this Indenture or
for any other purpose, pay, or direct any paying agent to pay, to the Trustee
all sums held in trust by the Company or such paying agent, such sums to be
held by the Trustee upon the same terms and conditions as those upon which
such sums were held by the Company or such paying agent; and, upon such
payment by any paying agent to the Trustee, such paying agent shall be
released from all further liability with respect to such money.
SECTION 4.04. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 7.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 4.05. COMPLIANCE WITH CONSOLIDATION PROVISIONS.
Neither the Company nor the Guarantor will, while any of the
Securities remain Outstanding, consolidate with, or merge into, or merge into
itself, or sell or convey all or
28
<PAGE>
substantially all of its property to any other company unless the provisions
of Article Ten hereof are complied with.
SECTION 4.06. LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES.
(a) If Securities are issued to a MediaOne Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such
MediaOne Trust and (i) there shall have occurred any event that would
constitute an Event of Default or (ii) U S WEST shall be in default with
respect to its payment or any obligations under the Preferred Securities
Guarantee or Common Securities Guarantee relating to such MediaOne Trust,
then (x) the Guarantor and the Company shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock, and (y) the
Guarantor and the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Guarantor or the Company which rank pari
passu with or junior to such Securities; PROVIDED, HOWEVER, that restriction
(y) above does not apply to any stock dividends paid by the Guarantor where
the dividend stock is the same stock as that on which the dividend is being
paid.
(b) If Securities are issued to a MediaOne Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such
MediaOne Trust and the Company shall have given notice of its election to
defer payments of interest on such Securities by extending the interest
payment period as provided in any Board Resolution or indenture supplemental
hereto and such period, or any extension thereof, shall be continuing, then
(i) the Guarantor and the Company shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock, and (ii) the
Guarantor and the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Guarantor or the Company which rank pari
passu with or junior to such Securities; PROVIDED, HOWEVER, that restriction
(i) above does not apply to any stock dividends paid by the Guarantor where
the dividend stock is the same stock as that on which the dividend is being
paid..
29
<PAGE>
SECTION 4.07. COVENANTS AS TO MEDIAONE TRUSTS.
In the event Securities are issued to a MediaOne Trust or a trustee
of such trust in connection with the issuance of Trust Securities by such
MediaOne Trust, for so long as such Trust Securities remain outstanding, the
Guarantor will (i) maintain 100% direct or indirect ownership of the Common
Securities of such MediaOne Trust; PROVIDED, HOWEVER, that any permitted
successor of the Guarantor under the Indenture may succeed to the Guarantor's
ownership of the Common Securities and (ii) use its reasonable efforts to
cause such MediaOne Trust (a) to remain a statutory business trust, except in
connection with a distribution of Securities, the redemption of all of the
Trust Securities of such MediaOne Trust or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such MediaOne Trust,
and (b) to otherwise continue not to be treated as a grantor trust for United
States federal income tax purposes.
ARTICLE V.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS.
The Company will furnish or cause to be furnished to the Trustee (a)
on a monthly basis on each regular record date (as defined in Section 2.03) a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of each series of Securities as of such regular
record date, PROVIDED that the Company shall not be obligated to furnish or
cause to furnish such list at any time that the list shall not differ in any
respect from the most recent list furnished to the Trustee by the Company and
(b) at such other times as the Trustee may request in writing within 30 days
after the receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished; PROVIDED, HOWEVER, that, in either case, no such list need be
furnished for any series for which the Trustee shall be the Security
Registrar.
30
<PAGE>
SECTION 5.02. PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Securities contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b)
of the Trust Indenture Act with other Securityholders with respect to their
rights under this Indenture or under the Securities.
SECTION 5.03. REPORTS BY THE GUARANTOR.
(a) The Guarantor covenants and agrees to file with the Trustee,
within 15 days after the Guarantor is required to file the same with the
Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the
Guarantor may be required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; or, if the Guarantor is not required to
file information, documents or reports pursuant to either of such sections,
then to file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such of
the supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Guarantor covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
to time by the Commission, such additional information, documents and reports
with respect to compliance by the Guarantor and the Company with the
conditions and covenants provided for in this Indenture as may be required
from time to time by such rules and regulations.
31
<PAGE>
(c) The Guarantor covenants and agrees to transmit by mail, first
class postage prepaid, or reputable over-night delivery service that provides
for evidence of receipt, to the Securityholders, as their names and addresses
appear upon the Security Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Guarantor pursuant to subsections (a) and (b) of
this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
SECTION 5.04. REPORTS BY THE TRUSTEE.
(a) On or before July 15 in each year in which any of the
Securities are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear
upon the Security Register, a brief report dated as of the preceding May 15,
if and to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the Company,
with each stock exchange upon which any Securities are listed (if so listed)
and also with the Commission. The Company agrees to notify the Trustee when
any Securities become listed on any stock exchange.
ARTICLE VI.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT.
(a) Whenever used herein with respect to Securities of a particular
series, "Event of Default" means any one or more of the following events that
has occurred and is continuing:
(1) the Company or the Guarantor defaults in the payment of any
installment of interest upon any of the Securities of that series, as
and when the same shall become due and payable, and continuance of such
default for a period of 90 days; PROVIDED, HOWEVER, that a valid
extension of an interest payment period by the Company in accordance
32
<PAGE>
with the terms of any indenture supplemental hereto, shall not
constitute a default in the payment of interest for this purpose;
(2) the Company or the Guarantor defaults in the payment of
the principal of (or premium, if any, on) any of the Securities of
that series as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or otherwise,
or in any payment required by any sinking or analogous fund
established with respect to that series; PROVIDED, HOWEVER, that a
valid extension of the maturity of such Securities in accordance
with the terms of any indenture supplemental hereto shall not
constitute a default in the payment of principal or premium, if any;
(3) the Company or the Guarantor fails to observe or perform
any other of its covenants or agreements with respect to that series
contained in this Indenture or otherwise established with respect to
that series of Securities pursuant to Section 2.01 hereof (other
than a covenant or agreement that has been expressly included in
this Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days after the
date on which written notice of such failure, requiring the same to
be remedied and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Company by the Trustee, by
registered or certified mail, or to the Company and the Trustee by
the holders of at least 25% in principal amount of the Securities of
that series at the time Outstanding;
(4) the Company or the Guarantor pursuant to or within the
meaning of any Bankruptcy Law (i) commences a voluntary case, (ii)
consents to the entry of an order for relief against it in an
involuntary case, (iii) consents to the appointment of a Custodian
of it or for all or substantially all of its property or (iv) makes
a general assignment for the benefit of its creditors;
(5) a court of competent jurisdiction enters an order under
any Bankruptcy Law that (i) is for relief against the Company or the
Guarantor in an involuntary case, (ii) appoints a Custodian of the
Company or the Guarantor for all or substantially all of their
respective property, or (iii) orders the liquidation of the Company
or the Guarantor, and the order or decree remains unstayed and in
effect for 90 days; or
33
<PAGE>
(6) in the event Securities are issued to a MediaOne Trust or
a trustee of such trust in connection with the issuance of Trust
Securities by such MediaOne Trust, such MediaOne Trust shall have
voluntarily or involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in connection with (i) the
distribution of Securities to holders of Trust Securities in
liquidation of their interests in such MediaOne Trust, (ii) the
redemption of all of the outstanding Trust Securities of such
MediaOne Trust or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such MediaOne
Trust.
(b) In each and every such case, unless the principal of all the
Securities of that series shall have already become due and payable, either
the Trustee or the holders of not less than 25% in aggregate principal amount
of the Securities of that series then Outstanding hereunder, by notice in
writing to the Company and the Guarantor (and to the Trustee if given by such
Securityholders), may declare the principal of all the Securities of that
series to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, notwithstanding
anything contained in this Indenture or in the Securities of that series or
established with respect to that series pursuant to Section 2.01 to the
contrary.
(c) At any time after the principal of the Securities of that
series shall have been so declared due and payable, and before any judgment
or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the holders of a majority in aggregate
principal amount of the Securities of that series then Outstanding hereunder,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if: (i) the Company or the Guarantor has
paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of that series and the
principal of (and premium, if any, on) any and all Securities of that series
that shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at
the rate per annum expressed in the Securities of that series to the date of
such payment or deposit) and the amount payable to the Trustee under Section
7.06, and (ii) any and all Events of Default under the Indenture with respect
to such series, other than the nonpayment of principal on Securities of that
series that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 6.06.
34
<PAGE>
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right
with respect to Securities of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company, the
Guarantor and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such proceedings had been
taken.
SECTION 6.02. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Company and the Guarantor covenant that (1) in case it
shall default in the payment of any installment of interest on any of the
Securities of a series, or any payment required by any sinking or analogous
fund established with respect to that series as and when the same shall have
become due and payable, and such default shall have continued for a period of
90 Business Days, or (2) in case it shall default in the payment of the
principal of (or premium, if any, on) any of the Securities of a series when
the same shall have become due and payable, whether upon maturity of the
Securities of a series or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee, the Company or the Guarantor will pay to
the Trustee, for the benefit of the holders of the Securities of that series,
the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the
case may be, with interest upon the overdue principal (and premium, if any)
and (to the extent that payment of such interest is enforceable under
applicable law and, if the Securities are held by a MediaOne Trust or a
trustee of such trust, without duplication of any other amounts paid by the
Guarantor or such MediaOne Trust or trustee in respect thereof) upon overdue
installments of interest at the rate per annum expressed in the Securities of
that series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount
payable to the Trustee under Section 7.06.
(b) If the Company or the Guarantor shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and
35
<PAGE>
empowered to institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any such judgment
or final decree against the Company or the Guarantor or other obligor upon
the Securities of that series and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Company
or the Guarantor or other obligor upon the Securities of that series,
wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or
judicial proceedings affected the Company or the Guarantor, or the creditors
or property of either, the Trustee shall have power to intervene in such
proceedings and take any action therein that may be permitted by the court
and shall (except as may be otherwise provided by law) be entitled to file
such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of
Securities of such series allowed for the entire amount due and payable by
the Company or the Guarantor under the Indenture at the date of institution
of such proceedings and for any additional amount that may become due and
payable by the Company or the Guarantor after such date, and to collect and
receive any moneys or other property payable or deliverable on any such
claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders of
Securities of such series to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly
to such Securityholders, to pay to the Trustee any amount due it under
Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Securities
of that series, may be enforced by the Trustee without the possession of any
of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for payment to the
Trustee of any amounts due under Section 7.06, be for the ratable benefit of
the holders of the Securities of such series.
In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights
36
<PAGE>
vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in the
Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by
this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities of that series or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.
SECTION 6.03. APPLICATION OF MONEYS COLLECTED.
Any moneys collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal (or premium, if any)
or interest, upon presentation of the Securities of that series, and notation
thereon the payment, if only partially paid, and upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article Fourteen; and
THIRD: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
SECTION 6.04. LIMITATION ON SUITS.
No holder of any Security of any series shall have any right by
virtue or by availing of any provision of this Indenture
37
<PAGE>
to institute any suit, action or proceeding in equity or at law upon or under
or with respect to this Indenture or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless (i) such holder previously
shall have given to the Trustee written notice of an Event of Default and of
the continuance thereof with respect to the Securities of such series
specifying such Event of Default, as hereinbefore provided; (ii) the holders
of not less than 25% in aggregate principal amount of the Securities of such
series then Outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as trustee
hereunder; (iii) such holder or holders shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; and (iv) the Trustee for 60
days after its receipt of such notice, request and offer of indemnity, shall
have failed to institute any such action, suit or proceeding and (v) during
such 60 day period, the holders of a majority in principal amount of the
Securities of that series do not give the Trustee a direction inconsistent
with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Indenture, the right of any holder of any Security to
receive payment of the principal of (and premium, if any) and interest on
such Security, as therein provided, on or after the respective due dates
expressed in such Security (or in the case of redemption, on the redemption
date), or to institute suit for the enforcement of any such payment on or
after such respective dates or redemption date, shall not be impaired or
affected without the consent of such holder and by accepting a Security
hereunder it is expressly understood, intended and covenanted by the taker
and holder of every Security of such series with every other such taker and
holder and the Trustee, that no one or more holders of Securities of such
series shall have any right in any manner whatsoever by virtue or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights
of the holders of any other of such Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal, ratable and common benefit of all holders of Securities of series.
For the protection and enforcement of the provisions of this Section, each
and every Securityholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
38
<PAGE>
SECTION 6.05. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION
NOT WAIVER.
(a) Except as otherwise provided in Section 2.07, all powers and
remedies given by this Article to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any other powers and remedies available to the Trustee or the holders of
the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of
the Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or on
acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article or by law to the Trustee or the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.
SECTION 6.06. CONTROL BY SECURITYHOLDERS.
The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding, determined in accordance
with Section 8.04, shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such
series; PROVIDED, HOWEVER, that such direction shall not be in conflict with
any rule of law or with this Indenture or be unduly prejudicial to the rights
of holders of Securities of any other series at the time Outstanding
determined in accordance with Section 8.04. Subject to the provisions of
Section 7.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Securities of any series at the time
Outstanding affected thereby, determined in accordance with Section 8.04, may
on behalf of the holders of all of the Securities of such series waive any
past default in the performance of any of the covenants contained herein or
established pursuant to Section 2.01 with respect to such series and its
consequences, except (i) a default in the payment of the
39
<PAGE>
principal of, or premium, if any, or interest on, any of the Securities of
that series as and when the same shall become due by the terms of such
Securities otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and
principal and any premium has been deposited with the Trustee (in accordance
with Section 6.01(c)) or (ii) a default in the covenants contained in Section
4.06. Upon any such waiver, the default covered thereby shall be deemed to
be cured for all purposes of this Indenture and the Company, the Trustee and
the holders of the Securities of such series shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.07. UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any
Securities by such holder's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section
shall not apply to any suit instituted by the Trustee, to any suit instituted
by any Securityholder, or group of Securityholders, holding more than 10% in
aggregate principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security of such
series, on or after the respective due dates expressed in such Security or
established pursuant to this Indenture.
40
<PAGE>
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default
with respect to the Securities of a series and after the curing of all Events
of Default with respect to the Securities of that series that may have
occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to the Securities of a
series has occurred (that has not been cured or waived), the Trustee shall
exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to the
Securities of a series and after the curing or waiving of all such Events of
Default with respect to that series that may have occurred:
(i) the duties and obligations of the Trustee shall with respect to
the Securities of such series be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with
respect to the Securities of such series except for the performance of
such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Securities of such series conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the
41
<PAGE>
requirements of this Indenture; but in the case of any such certificates
or opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirement of
this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee, was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the Securities
of any series at the time Outstanding relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Indenture
with respect to the Securities of that series; and
(4) None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any
of its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company or the
Guarantor mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company or the
Guarantor, as the case may be, by the President or any Vice President and by
42
<PAGE>
the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer thereof (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted hereunder in good faith and in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the
Securities (that has not been cured or waived) to exercise with respect
to Securities of that series such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;
(e) The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture;
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security, or other papers or documents, unless requested in writing
so to do by the holders of not less than a majority in principal amount
of the Outstanding Securities of the particular series affected thereby
(determined as provided in Section 8.04); PROVIDED, HOWEVER, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
costs, expenses or liabilities as a condition to so proceeding.
43
<PAGE>
The reasonable expense of every such examination shall be paid by the
Company and the Guarantor or, if paid by the Trustee, shall be repaid by
the Company and the Guarantor upon demand; and
(g) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
SECTION 7.03. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OR SECURITIES.
(a) The recitals contained herein and in the Securities shall be
taken as the statements of the Company and the Guarantor, and the Trustee
assumes no responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use or application
by the Company or the Guarantor of any of the Securities or of the proceeds
of such Securities, or for the use or application of any moneys paid over by
the Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any moneys
received by any paying agent other than the Trustee.
SECTION 7.04. MAY HOLD SECURITIES.
The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.
SECTION 7.05. MONEYS HELD IN TRUST.
Subject to the provisions of Section 11.05, all moneys received by
the Trustee shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received, but need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any moneys received by it hereunder except
such as it may agree with the Company and the Guarantor to pay thereon.
44
<PAGE>
SECTION 7.06. COMPENSATION AND REIMBURSEMENT.
(a) The Company and the Guarantor covenant and agree to pay to the
Trustee, and the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), as the Company, the Guarantor
and the Trustee may from time to time agree in writing, for all services
rendered by it in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company and
the Guarantor will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company and the Guarantor also covenant to indemnify the Trustee (and its
officers, agents, directors and employees) for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses
of defending itself against any claim of liability in the premises.
(b) The obligations of the Company and the Guarantor under this
Section to compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a
lien prior to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit
of the holders of particular Securities.
SECTION 7.07. RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or suffering or omitting to take any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the Trustee, be deemed
to be conclusively proved and established by an Officers' Certificate
delivered to the Trustee and such certificate, in the absence of negligence
or bad faith on the part of the Trustee,
45
<PAGE>
shall be full warrant to the Trustee for any action taken, suffered or
omitted to be taken by it under the provisions of this Indenture upon the
faith thereof.
SECTION 7.08. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee
and the Company shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
SECTION 7.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee with respect to the Securities
issued hereunder which shall at all times be a corporation organized and
doing business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial, or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. The Company and the Guarantor may not, nor may any
Person directly or indirectly controlling, controlled by, or under common
control with the Company or the Guarantor, serve as Trustee. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section, the Trustee shall resign immediately in the manner and with
the effect specified in Section 7.10.
SECTION 7.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any
time resign with respect to the Securities of one or more series by giving
written notice thereof to the Company and the Guarantor and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Securityholders of such series, as their names and addresses appear upon the
Security Register. Upon receiving such notice of resignation, the Company
46
<PAGE>
and the Guarantor shall promptly appoint a successor trustee with respect to
Securities of such series by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor trustee with respect to Securities of such
series, or any Securityholder of that series who has been a bona fide holder
of a Security or Securities for at least six months may, subject to the
provisions of Section 6.08, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon after such notice, if any, as it may deem proper
and prescribe, appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the
Company or the Guarantor or by any Securityholder who has been a bona
fide holder of a Security or Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or the Guarantor or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, the
Company or the Guarantor may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions of Section 6.08,
unless the Trustee's duty to resign is stayed as provided herein, any
Securityholder who has been a bona fide holder of a Security or
Securities
47
<PAGE>
for at least six months may, on behalf of that holder and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities of any series at the time Outstanding may at any time remove the
Trustee with respect to such series by so notifying the Trustee, the Company
and the Guarantor and may appoint a successor Trustee for such series with
the consent of the Company and the Guarantor.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Securities of a series pursuant to any
of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section may be
appointed with respect to the Securities of one or more series or all of such
series, and at any time there shall be only one Trustee with respect to the
Securities of any particular series.
SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee
with respect to all Securities, every such successor trustee so appointed
shall execute, acknowledge and deliver to the Company and the Guarantor and
to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
Guarantor or the successor trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor trustee all
property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor trustee
with respect to the Securities of one or more (but not all) series, the
Company, the Guarantor, the retiring
48
<PAGE>
Trustee and each successor trustee with respect to the Securities of one or
more series shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
trustee relates, (2) shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, that
each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any act or failure to
act on the part of any other Trustee hereunder; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein, such
retiring Trustee shall with respect to the Securities of that or those series
to which the appointment of such successor trustee relates have no further
responsibility for the exercise of rights and powers or for the performance
of the duties and obligations vested in the Trustee under this Indenture, and
each such successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor trustee relates; but, on request of
the Company or the Guarantor or any successor trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor trustee, to the
extent contemplated by such supplemental indenture, the property and money
held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor trustee
relates.
(c) Upon request of any such successor trustee, the Company and the
Guarantor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers
and trusts referred to in paragraph (a) or (b) of this Section, as the case
may be.
49
<PAGE>
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be qualified and
eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company and the Guarantor shall transmit notice
of the succession of such trustee hereunder by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register. If the Company and the Guarantor fail to transmit such
notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be transmitted at
the expense of the Company and the Guarantor.
SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, PROVIDED that such
corporation shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
50
<PAGE>
ARTICLE VIII.
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS.
Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the
Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of that series
have joined therein may be evidenced by any instrument or any number of
instruments of similar tenor executed by such holders of Securities of that
series in Person or by agent or proxy appointed in writing.
If the Company or the Guarantor shall solicit from the
Securityholders of any series any request, demand, authorization, direction,
notice, consent, waiver or other action, the Company or the Guarantor may, at
its option, as evidenced by an Officers' Certificate, fix in advance a record
date for such series for the determination of Securityholders entitled to
give such request, demand, authorization, direction, notice, consent, waiver
or other action, but the Company or the Guarantor shall have no obligation to
do so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action may be given before or
after the record date, but only the Securityholders of record at the close of
business on the record date shall be deemed to be Securityholders for the
purposes of determining whether Securityholders of the requisite proportion
of Outstanding Securities of that series have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding Securities of
that series shall be computed as of the record date; PROVIDED, HOWEVER, that
no such authorization, agreement or consent by such Securityholders on the
record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after
the record date.
SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS.
Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization)
or his agent or proxy and proof of the
51
<PAGE>
holding by any Person of any of the Securities shall be sufficient if made in
the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security
Register of such Securities or by a certificate of the Security Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any
Security, the Company, the Guarantor, the Trustee, any paying agent and any
Security Registrar may deem and treat the Person in whose name such Security
shall be registered upon the books of the Company as the absolute owner of
such Security (whether or not such Security shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone
other than the Security Registrar) for the purpose of receiving payment of or
on account of the principal of, premium, if any, and (subject to Section
2.03) interest on such Security and for all other purposes; and neither the
Company nor the Guarantor nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
SECTION 8.04. CERTAIN SECURITIES OWNED BY COMPANY OR GUARANTOR
DISREGARDED.
In determining whether the holders of the requisite aggregate
principal amount of Securities of a particular series have concurred in any
direction, consent of waiver under this Indenture, the Securities of that
series that are owned by the Company or the Guarantor or any other obligor on
the Securities of that series or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or the
Guarantor or any other obligor on the Securities of that series shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Securities of such series that the Trustee actually knows are so owned shall
be so disregarded. The Securities so owned
52
<PAGE>
that have been pledged in good faith may be regarded as Outstanding for the
purposes of this Section, if the pledgee shall establish to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
the Guarantor or any such other obligor. In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.
SECTION 8.05. ACTIONS BINDING ON FUTURE SECURITYHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee,
as provided in Section 8.01, of the taking of any action by the holders of
the majority or percentage in aggregate principal amount of the Securities of
a particular series specified in this Indenture in connection with such
action, any holder of a Security of that series that is shown by the evidence
to be included in the Securities the holders of which have consented to such
action may, by filing written notice with the Trustee, and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns
such Security. Except as aforesaid any such action taken by the holder of any
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Security, and of any Security issued in exchange
therefor, on registration of transfer thereof or in place thereof,
irrespective of whether or not any notation in regard thereto is made upon
such Security. Any action taken by the holders of the majority or percentage
in aggregate principal amount of the Securities of a particular series
specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Guarantor, the Trustee and the
holders of all the Securities of that series.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS.
In addition to any supplemental indenture otherwise authorized by
this Indenture, the Company and the Guarantor and the Trustee may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect),
53
<PAGE>
without the consent of the Securityholders, for one or more of the following
purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, in the
Securities of any series or in the Guarantees;
(b) to comply with Article Ten;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to add to the covenants of the Company or the Guarantor for the
benefit of the holders of all or any Series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company or the Guarantor;
(e) to add to, delete from, or revise the conditions, limitations,
and restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Securities, as herein set forth;
(f) to make any change that does not adversely affect the rights of
any Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and terms
and conditions of the Securities of any series and the Guarantees as provided
in Section 2.01, to establish the form of any certifications required to be
furnished pursuant to the terms of this Indenture or any series of
Securities, or to add to the rights of the holders of any series of
Securities.
The Trustee is hereby authorized to join with the Company and the
Guarantor in the execution of any such supplemental indenture, and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into any such
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company, the Guarantor and the Trustee without
the consent of the holders of any of the Securities at the time Outstanding,
notwithstanding any of the provisions of Section 9.02.
54
<PAGE>
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Section 8.01) of the
holders of not less than a majority in aggregate principal amount of the
Securities of each series affected by such supplemental indenture or
indentures at the time Outstanding, the Company and the Guarantor, when
authorized by Board Resolutions, and the Trustee may from time to time and at
any time enter into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as then in effect)
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner not covered by Section 9.01 the
rights of the holders of the Securities of such series under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent of the holders of each Security then Outstanding and affected
thereby, (i) extend the fixed maturity of any Securities of any series, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the
redemption thereof or (ii) reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, this Indenture shall, with
respect to such series, be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company, the Guarantor and the holders of Securities of the series affected
thereby shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the
terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
55
<PAGE>
SECTION 9.04. SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.
Securities of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such series may be listed, as to any matter provided
for in such supplemental indenture. If the Company and the Guarantor shall
so determine, new Securities of that series so modified as to conform, in the
opinion of the Board of Directors of the Company and the Guarantor, to any
modification of this Indenture contained in any such supplemental indenture
may be prepared by the Company and the Guarantor, authenticated by the
Trustee and delivered in exchange for the Securities of that series then
Outstanding.
SECTION 9.05. EXECUTION OF SUPPLEMENTAL INDENTURES.
Upon the request of the Company and the Guarantor, accompanied by
their Board Resolutions authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Securityholders required to consent thereto as aforesaid, the Trustee shall
join with the Company and the Guarantor in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion but shall not be obligated to enter into
such supplemental indenture. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is
proper for the Trustee under the provisions of this Article to join in the
execution thereof; PROVIDED, HOWEVER, that such Opinion of Counsel need not
be provided in connection with the execution of a supplemental indenture that
establishes the terms of a series of Debt Securities and related Guarantee
pursuant to Section 2.01 hereof.
Promptly after the execution by the Company, the Guarantor and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders of all series affected thereby as their
names
56
<PAGE>
and addresses appear upon the Security Register. Any failure of the Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
ARTICLE X.
SUCCESSOR CORPORATION
SECTION 10.01. COMPANY OR GUARANTOR MAY CONSOLIDATE, ETC.
Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of the Company or the Guarantor
with or into any other corporation or corporations (whether or not affiliated
with the Company or the Guarantor, as the case may be), or successive
consolidations or mergers in which the Company or the Guarantor, as the case
may be, or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance, transfer or other disposition of the property
of the Company or the Guarantor, as the case may be, or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or the Guarantor, as
the case may be, or its successor or successors) authorized to acquire and
operate the same; PROVIDED, HOWEVER, the Company and the Guarantor hereby
covenant and agree that, upon any such consolidation, merger, sale,
conveyance, transfer or other disposition, the due and punctual payment, in
the case of the Company, of the principal of (premium, if any) and interest
on all of the Debt Securities of all series in accordance with the terms of
each series, according to their tenor or, in the case of the Guarantor, the
performance of all obligations under the Guarantees, and the due and punctual
performance and observance of all the covenants and conditions of this
Indenture with respect to each series or established with respect to such
series pursuant to Section 2.01 to be kept or performed by the Company or the
Guarantor, as the case may be, shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act,
as then in effect) satisfactory in form to the Trustee executed and delivered
to the Trustee by the entity formed by such consolidation, or into which the
Company or the Guarantor, as the case may be, shall have been merged, or by
the entity which shall have acquired such property.
Notwithstanding anything to the contrary contained in this
Indenture, the provisions of this Section 10.01 shall not
57
<PAGE>
apply to the distribution by the Guarantor to its stockholders of the capital
stock of USW-C, Inc., a Delaware corporation ("New U S WEST"), pursuant to
the terms of the Separation Agreement, dated as of June 5, 1998, as amended
from time to time, between the Guarantor and New U S WEST.
SECTION 10.02. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of, in the case of the Company, the
due and punctual payment of the principal of, premium, if any, and interest
on all of the Debt Securities of all series Outstanding or, in the case of
the Guarantor, the performance of all obligations under the Guarantees, and
the due and punctual performance of all of the covenants and conditions of
this Indenture or established with respect to each series of the Securities
pursuant to Section 2.01 to be performed by the Company or the Guarantor, as
the case may be, with respect to each series, such successor corporation
shall succeed to and be substituted for the Company or the Guarantor, as the
case may be, with the same effect as if it had been named as the Company or
the Guarantor, as the case may be, herein, and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not
in substance) may be made in the Securities thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Securities
shall prevent the Company or the Guarantor from merging into itself or
acquiring by purchase or otherwise all or any part of the property of any
other Person (whether or not affiliated with the Company or the Guarantor).
SECTION 10.03. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 7.01, may receive
an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or other disposition, and any such
assumption, comply with the provisions of this Article.
58
<PAGE>
ARTICLE XI.
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Company or the Guarantor shall have
delivered to the Trustee for cancellation all Securities of a series
theretofore authenticated (other than any Securities that shall have ben
destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.07) and Securities for whose payment money or
Governmental Obligations have theretofore been deposited in trust or
segregated and held in trust by the Company or the Guarantor (and thereupon
repaid to the Company or the Guarantor or discharged from such trust, as
provided in Section 11.05); or (b) all such Securities of a particular series
not theretofore delivered to the Trustee for cancellation shall have become
due and payable, or are by their terms to become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company or the Guarantor shall deposit or cause to be deposited with the
Trustee as trust funds the entire amount in moneys or Governmental
Obligations sufficient or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at maturity or
upon redemption all Securities of that series not theretofore delivered to
the Trustee for cancellation, including principal (and premium, if any) and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company or the Guarantor shall
also pay or cause to be paid all other sums payable hereunder with respect to
such series by the Company and the Guarantor; then this Indenture shall
thereupon cease to be of further effect with respect to such series except
for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10,
that shall survive until the date of maturity or redemption date, as the case
may be, and Sections 7.06 and 11.05, that shall survive to such date and
thereafter, and the Trustee, on demand of the Company and the Guarantor and
at the cost and expense of the Company and the Guarantor, shall execute
proper instruments acknowledging satisfaction of and discharging this
Indenture with respect to such series.
59
<PAGE>
SECTION 11.02. DISCHARGE OF OBLIGATIONS.
If at any time all such Securities of a particular series not
heretofore delivered to the Trustee for cancellation or that have not become
due and payable as described in Section 11.01 shall have been paid by the
Company or the Guarantor by depositing irrevocably with the Trustee as trust
funds moneys or an amount of Governmental Obligations sufficient to pay at
maturity or upon redemption all such Securities of that series not
theretofore delivered to the Trustee for cancellation, including principal
(and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company
or the Guarantor shall also pay or cause to be paid all other sums payable
hereunder by the Company and the Guarantor with respect to such series, then
after the date such moneys or Governmental Obligations, as the case may be,
are deposited with the Trustee the obligations of the Company and the
Guarantor under this Indenture with respect to such series shall cease to be
of further effect except for the provisions of Sections 2.03, 2.05, 2.07,
4,01, 4.02, 4,03, 7.06, 7.10 and 11.05 hereof that shall survive until such
Securities shall mature and be paid. Thereafter, Sections 7.06 and 11.05
shall survive.
SECTION 11.03. DEPOSITED MONEYS TO BE HELD IN TRUST.
All moneys or Governmental Obligations deposited with the Trustee
pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be
available for payment as due, either directly or through any paying agent
(including the Company acting as its own paying agent), to the holders of the
particular series of Securities for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.
SECTION 11.04. PAYMENT OF MONEYS HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture
all moneys or Governmental Obligations then held by any paying agent under
the provisions of this Indenture shall, upon demand of the Company or the
Guarantor, be paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys or
Governmental Obligations.
SECTION 11.05. REPAYMENT TO COMPANY.
Any moneys or Governmental Obligations deposited with any paying
agent or the Trustee, or then held by the Company or
60
<PAGE>
the Guarantor, as the case may be, in trust for payment of principal of or
premium or interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities for at least
two years after the date upon which the principal of (and premium, if any) or
interest on such Securities shall have respectively become due and payable,
shall be repaid to the Company or the Guarantor, as the case may be, on May
31 of each year or (if then held by the Company or the Guarantor) shall be
discharged from such trust; and thereupon the paying agent and the Trustee
shall be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Securities entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company or the Guarantor for the payment thereof.
ARTICLE XII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01. NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security or Guarantee, or for any claim based
thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as
such, of the Company or the Guarantor or of any predecessor or successor
corporation, either directly or through the Company or the Guarantor or any
such predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Indenture
and the obligations issued hereunder are solely corporate obligations, and
that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such,
of the Company or the Guarantor or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or implied
therefrom; and that any and all such personal liability of every name and
nature, either at common law or in equity or by constitution or statute, of,
and any and all such rights and claims against, every such incorporator,
stockholder, officer or director as such, because of the creation of the
indebtedness
61
<PAGE>
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or implied
therefrom, are hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issuance of such
Securities.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.01. EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company or the Guarantor shall
bind their respective successors and assigns, whether so expressed or not.
SECTION 13.02. ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture authorized
or required to be done or performed by any board, committee or officer of the
Company or the Guarantor shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any
corporation that shall at the time be the lawful sole successor of the
Company or the Guarantor, as the case may be.
SECTION 13.03. SURRENDER OF COMPANY POWERS.
The Company or the Guarantor by instrument in writing executed by
authority of 2/3 (two-thirds) of its Board of Directors and delivered to the
Trustee may surrender any of the powers reserved to the Company or the
Guarantor, as the case may be, and thereupon such power so surrendered shall
terminate both as to the Company or the Guarantor, as the case may be, and as
to any successor corporation.
SECTION 13.04. NOTICES.
Except as otherwise expressly provided herein any notice or demand
that by any provision of this Indenture is required or permitted to be given
or served by the Trustee or by the holders of Securities to or on the Company
or the Guarantor may be given or served by being deposited first class
postage prepaid in a post-office letterbox addressed (until another address
is filed in writing by the Company with the Trustee), as follows: c/o U S
WEST, Inc. (to be renamed "MediaOne Group,
62
<PAGE>
Inc."), 188 Inverness Drive West, Englewood, Colorado 80112, Attention:
Treasurer. Any notice, election, request or demand by the Company or any
Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at
the Corporate Trust Office of the Trustee.
SECTION 13.05. GOVERNING LAW.
This Indenture and each Security shall be deemed to be a contract
made under the internal laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State.
SECTION 13.06. TREATMENT OF DEBT SECURITIES AS DEBT.
It is intended that the Debt Securities will be treated as
indebtedness and not as equity for federal income tax purposes. The
provisions of this Indenture shall be interpreted to further this intention.
SECTION 13.07. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company or the Guarantor
to the Trustee to take any action under any of the provisions of this
Indenture, the Company or the Guarantor, as the case may be, shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate
or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with;
63
<PAGE>
and (4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
SECTION 13.08. PAYMENTS ON BUSINESS DAYS.
Except as provided pursuant to Section 2.01 pursuant to a Board
Resolution, and as set forth in an Officers' Certificate, or established in
one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Security or the date of
redemption of any Security shall not be a Business Day, then payment of
interest or principal (and premium, if any) may be made on the next
succeeding Business Day with the same force and effect as if made on the
nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.
SECTION 13.09. CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 13.10. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 13.11. SEPARABILITY.
In case any one or more of the provisions contained in this
Indenture or in the Securities of any series shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall
be construed as if such invalid or illegal or unenforceable provision had
never been contained herein or therein.
SECTION 13.12. ASSIGNMENT.
Each of the Company and the Guarantor will have the right at all
times to assign any of its respective rights or obligations under this
Indenture to a direct or indirect wholly-owned Subsidiary of the Guarantor,
PROVIDED that, in the event of any such assignment, the Company or the
Guarantor, as the case
64
<PAGE>
may be, will remain liable for all such obligations. Subject to the
foregoing, the Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture
may not otherwise be assigned by the parties thereto.
SECTION 13.13. ACKNOWLEDGEMENT OF RIGHTS.
The Company and the Guarantor acknowledge that, with respect to any
Securities held by a MediaOne Trust or a trustee of such trust, if the
Property Trustee of such Trust fails to enforce its rights under this
Indenture as the holder of the series of Securities held as the assets of
such MediaOne Trust, any holder of Preferred Securities of such MediaOne
Trust may, after a period of 30 days has elapsed from such holder's written
request to such Property Trustee to enforce such rights, institute legal
proceedings directly against the Company and the Guarantor to enforce such
Property Trustee's rights under this Indenture without first instituting any
legal proceedings against such Property Trustee or any other person or
entity. In addition, the Company and the Guarantor acknowledge that,
notwithstanding the foregoing, if a an event of default under the Declararion
of such MediaOne Trust has occurred and is continuing and such event is
attributable to the failure of the Company or the Guarantor to pay interest
or principal on such Securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date),
then any holder of such Preferred Securities may institute a proceeding for
enforcement of payment to such holder of the principal of, or interest on, an
aggregate principal amount of such Securities equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in such Securities.
ARTICLE XIV.
SUBORDINATION OF SECURITIES
SECTION 14.01. SUBORDINATION TERMS.
The payment by the Company of the principal of, premium, if any, and
interest on any series of Debt Securities issued hereunder shall be
subordinated to the extent set forth in an indenture supplemental hereto
relating to such Debt Securities. The payment by the Guarantor of any
obligation due under any Guarantees issued hereunder shall be subordinated to
65
<PAGE>
the extent set forth in an indenture supplemental hereto relating to such
Guarantees.
66
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
MEDIAONE GROUP FUNDING, INC.
By: /s/ Stepen E. Brilz
--------------------------------
Name: Stephen E. Brilz
Title: Secretary
U S WEST, INC. (to be renamed
"MediaOne Group, Inc.")
By:/s/ Stephen E. Brilz
--------------------------------
Name: Stephen E. Brilz
Title: Assistant Secretary
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:/s/ Jane Y. Schweiger
--------------------------------
Name: Jane Y. Schweiger
Title: Corporate Trust Officer
67
<PAGE>
---------------------------------------------------
[ ] SUPPLEMENTAL INDENTURE
among
MEDIAONE GROUP FUNDING, INC.,
Issuer,
MEDIAONE GROUP, INC.
Guarantor
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
Dated as of [ ], 199[ ]
---------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C> <C>
SECTION 1.1 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE NOTES
SECTION 2.1 Designation and Principal Amount. . . . . . . . . . . . . . . . 4
SECTION 2.2 Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Form and Payment. . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Global Note . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.5 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.1 Special Event Redemption. . . . . . . . . . . . . . . . . . . . 6
SECTION 3.2 Optional Redemption by Company. . . . . . . . . . . . . . . . . 7
SECTION 3.3 No Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period. . . . . . . . . . . . . . 7
SECTION 4.2 Notice of Extension . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE V
EXPENSES AND GUARANTEE
SECTION 5.1 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 5.2 Guarantee of Payment of Expenses. . . . . . . . . . . . . . . . 9
ARTICLE VI
SUBORDINATION
SECTION 6.1 Agreement to Subordinate. . . . . . . . . . . . . . . . . . . . 9
SECTION 6.2 Default on Senior Indebtedness. . . . . . . . . . . . . . . . .10
SECTION 6.3 Liquidation: Dissolution; Bankruptcy. . . . . . . . . . . . . .11
SECTION 6.4 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 6.5 Trustee to Effectuate Subordination . . . . . . . . . . . . . .14
SECTION 6.6 Notice by the Company and the Guarantor . . . . . . . . . . . .14
SECTION 6.7 Rights of the Trustee; Holders of Senior Indebtedness . . . . .15
SECTION 6.8 Subordination May Not Be Impaired . . . . . . . . . . . . . . .15
i
<PAGE>
ARTICLE VII
COVENANTS
SECTION 7.1 Listing on Exchanges. . . . . . . . . . . . . . . . . . . . . .16
SECTION 7.2 Direct Action . . . . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE VIII
FORM OF NOTE
SECTION 8.1 Form of Note. . . . . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE IX
ORIGINAL ISSUE OF NOTES AND GUARANTEES
SECTION 9.1 Original Issue of Notes and Guarantees. . . . . . . . . . . . .26
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Ratification of Indenture . . . . . . . . . . . . . . . . . . .26
SECTION 10.2 Trustee Not Responsible for Recitals. . . . . . . . . . . . . .27
SECTION 10.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 10.4 Separability. . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 10.5 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .27
</TABLE>
ii
<PAGE>
[ ] SUPPLEMENTAL INDENTURE, dated as of [ ], 199[ ](the
"[ ] Supplemental Indenture"), among MediaOne Group Funding, Inc., a
Delaware corporation (the "Company"), MediaOne Group, Inc., a Delaware
corporation (the "Guarantor") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee") under the Indenture dated as of June
12, 1998 among the Company, the Guarantor and the Trustee (as so
supplemented, the "Indenture").
WHEREAS, the Company and the Guarantor executed and delivered the
Indenture to the Trustee to provide for the future issuance of the Company's
unsecured subordinated debt securities guaranteed by the Guarantor, to be
issued from time to time in one or more series as might be determined by the
Company under the Indenture, in an unlimited aggregate principal amount which
may be authenticated and delivered as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debt
Securities to be known as its [ ]% Subordinated Deferrable Interest Notes due
[ ], and the Guarantor desires to provide for the issuance of a Guarantee
of such Debt Securities (the "Note Guarantee" and, together with the Debt
Securities, the "Notes"), the form and substance of such Notes and the Note
Guarantee and the terms, provisions and conditions thereof to be set forth as
provided in the Indenture and this [ ] Supplemental Indenture;
WHEREAS, MediaOne Finance Trust [ ], a Delaware statutory business
trust (the "Trust"), has offered to the public $[ ]aggregate
liquidation amount of its [ ]% Preferred Securities (the "Preferred
Securities"), representing undivided beneficial interests in the assets of
the Trust and proposes to invest the proceeds from such offering, together
with the proceeds of the issuance and sale by the Trust to the Guarantor of
$[ ] aggregate liquidation amount of its Common Securities, in
$[ ] aggregate principal amount of the Notes; and
WHEREAS, the Company and the Guarantor have requested that the
Trustee execute and deliver this [ ] Supplemental Indenture, and all
requirements necessary to make this [ ] Supplemental Indenture a valid
instrument, in accordance with its terms, and to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company and to make the Guarantee endorsed thereon
when executed by the Guarantor a valid obligation of the Guarantor, have been
performed, and the execution and delivery of this [ ] Supplemental
Indenture has been duly authorized in all respects:
<PAGE>
NOW THEREFORE, in consideration of the purchase and acceptance of
the Notes by the holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Notes and the terms,
provisions and conditions thereof, the Company and the Guarantor covenant and
agree with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITION OF TERMS
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used
in this [ ] Supplemental Indenture;
(b) a term defined anywhere in this [ ] Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article
of this [ ] Supplemental Indenture;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii) Property
Trustee; (iv) Preferred Security Certificate; (v) Regular Trustees; and (vi)
Special Event; and
(g) the following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" shall have the meaning set forth in Section
2.5.
"Declaration" means the Amended and Restated Declaration of Trust
of MediaOne Finance Trust [ ], a Delaware business trust, dated as of [ ]
, 199[ ].
"Dissolution Event" means that as a result of an election by the
Guarantor, the Trust is to be dissolved in accordance with the Declaration
and the Notes held by the Property Trustee are to be distributed to the
holders of the Trust Securities issued by the Trust pro rata in accordance
with the Declaration.
2
<PAGE>
"Maturity Date" means the date on which the Notes mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Additional Interest, if any.
"Optional Redemption Price" shall have the meaning set forth in
Section 3.2.
"Redemption Price" means either the Special Event Redemption Price
or the Optional Redemption Price, as the case may be.
"Senior Indebtedness" means with respect to the Company or
Guarantor, (i) the principal, premium, if any, and interest in respect of (A)
indebtedness of such obligor for money borrowed and (B) indebtedness
evidenced by securities, debentures, bonds or other similar instruments
issued by such obligor; (ii) all capital lease obligations of such obligor;
(iii) all obligations of such obligor issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such obligor
and all obligations of such obligor under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
(iv) all obligations of such obligor for the reimbursement on any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) of other persons for the payment of which such obligor is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other
persons secured by any lien on any property or asset of such obligor (whether
or not such obligation is assumed by such obligor), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Notes, as the case may be, and (2) any indebtedness, including all other debt
securities and guarantees in respect of those debt securities, initially
issued to (y) any other MediaOne Trust or (z) any trusts, partnerships or any
other entities affiliated with the Guarantor which is a financing vehicle of
the Guarantor ("Financing Entity") in connection with an issuance by such
Financing Entity of preferred securities or other securities which are
similar to the Preferred Securities, including, without limitation, (i) the
9.30% Subordinated Deferrable Interest Notes due 2025 issued by the Company
to MediaOne Finance Trust I (the "9.30% Notes") and the guarantee by the
Guarantor of the 9.30% Notes (the "9.30% Notes Guarantee"), (ii) the 9.50%
Subordinated Deferrable Interest Notes due 2036 issued by the Company to
MediaOne Finance Trust II (the "9.50% Notes") and the guarantee by the
Guarantor of the 9.50% Notes (the "9.50% Notes Guarantee"), (iii) the 7.96%
Subordinated Deferrable Interest Notes due 2025 issued by the Company to
MediaOne Financing A (the "7.96% Notes") and the guarantee by the Guarantor
of the 7.96% Notes (the "7.96% Notes Guarantee") and (iv) the 8.25%
3
<PAGE>
Subordinated Deferrable Interest Notes due 2036 issued by the Company to
MediaOne Financing B (the "8.25% Notes") and the guarantee by the Guarantor
of the 8.25% Notes (the "8.25% Note Guarantee").
"Special Event Redemption Price" shall have the meaning set forth
in Section 3.1.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE NOTES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT
There is hereby authorized:
(a) a series of Debt Securities designated the "[ ]% Subordinated
Deferrable Interest Notes due [ ]", limited in aggregate principal amount
to $[ ], which amount shall be as set forth in any written order
of the Company for the authentication and delivery of Notes pursuant to
Section 2.4 of the Indenture; and
(b) a Guarantee of such Debt Securities.
SECTION 2.2 MATURITY
The Maturity Date will be [ ].
SECTION 2.3 FORM AND PAYMENT
Except as provided in Section 2.4, the Notes shall be issued in
fully registered certificated form without interest coupons. Principal and
interest on the Notes issued in certificated form will be payable, the
transfer of such Notes will be registrable and such Notes will be
exchangeable for Notes bearing identical terms and provisions at the office
or agency of the Trustee; PROVIDED, HOWEVER, that payment of interest may be
made at the option of the Company by check mailed to the registered holder at
such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the registered holder of any Notes is the Property
Trustee, the payment of the principal of and interest (including Additional
Interest, if any) on such Notes held by the Property Trustee will be made at
such place and to such account as may be designated by the Property Trustee.
4
<PAGE>
SECTION 2.4 GLOBAL NOTE
In connection with a Dissolution Event;
(a) the Notes in certificated form may be presented to the Trustee
by the Property Trustee in exchange for a Global Note in an aggregate
principal amount equal to all Outstanding Notes, to be registered in the name
of the Depository, or its nominee, and delivered by the Trustee to the
Depository for crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees. The Company upon any such presentation
shall execute a Global Note in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance with
the Indenture and this [ ] Supplemental Indenture. Payments on the Notes
issued as a Global Note will be made to the Depository; and
(b) if any Preferred Securities are held in non book-entry
certificated form, the Notes in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will
be deemed to represent beneficial interests in Notes presented to the Trustee
by the Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificates are presented to the Security Registrar
for transfer or reissuance at which time such Preferred Security Certificates
will be cancelled and a Note registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of such
Preferred Security Certificate as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled will be executed by the Company and delivered
to the Trustee for authentication and delivery in accordance with the
Indenture and this [ ] Supplemental Indenture. On issue of such Notes,
Notes with an equivalent aggregate principal amount that were presented by
the Property Trustee to the Trustee will be deemed to have been cancelled.
SECTION 2.5 INTEREST
(a) Each Note will bear interest at the rate of [ ]% per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the Coupon Rate, payable (subject to
the provisions of Article Four) [ ] in arrears on [ ] of each
year (each, an "Interest Payment Date"), commencing on [ ], 199[ ], to
the person in whose name such Note or any
5
<PAGE>
predecessor Note is registered, at the close of business on the regular
record date for such interest installment, which, in respect of any Notes of
which the Property Trustee is the registered holder of or a Global Note,
shall be the close of business on the Business Day next preceding that
Interest Payment Date. Notwithstanding the foregoing sentence, if (i) the
Preferred Securities are no longer in book-entry only form or (ii) a
Dissolution Event has occurred and subsequent thereto the Notes are not
represented by a Global Note pursuant to the provisions of Section 2.11(c) of
the Indenture, the Company may select a regular record date for such interest
installment which shall be any date at least one Business Day before an
Interest Payment Date.
(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided
in the following sentence, the amount of interest payable for any period
shorter than a full [ ] period for which interest in computed, will be
computed on the basis of the actual number of days elapsed per 30-day month.
In the event that any date on which interest is payable on the Notes is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) If at any time while the Property Trustee is the holder of any
Notes, the Trust or the Property Trustee is required to pay any taxes, duties
assessments or governmental changes of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company will pay as additional interest
("Additional Interest") on the Notes held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes,
duties assessments or other governmental changes will be equal to the amounts
the Trust and the Property Trustee would have received had no such taxes,
duties, assessments or other government changes been imposed.
ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.1 SPECIAL EVENT REDEMPTION
If a Special Event has occurred and is continuing then,
notwithstanding Section 3.2 but subject to Section 3.3(c), the Company shall
have the right, upon not less than 30 days' nor
6
<PAGE>
more than 60 days' notice to the registered holders of the Notes to redeem
the Notes in whole or in part for cash within 90 days following the
occurrence of such Special Event at a redemption price (the "Special Event
Redemption Price") equal to [ ]% of the principal amount of such Notes to
be redeemed plus any accrued and unpaid interest thereon to the date of such
redemption.
SECTION 3.2 OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.3(c) and to the
provisions of Article Three of the Indenture, the Company shall have the
right to redeem the Notes, in whole or in part, from time to time, on or
after [ ], at a redemption price (the "Optional Redemption Price")
equal to [ ]% of the principal amount per Note, plus, in each case,
accrued and unpaid interest thereon to the date of the redemption for the
Notes. Any redemption pursuant to this paragraph will be made upon not less
than 30 days nor more than 60 days notice before the redemption date to each
Holder of the Notes, at the Redemption Price.
SECTION 3.3 REDEMPTION PROCEDURES
(a)If the Notes are only partially redeemed pursuant to
Section 3.1 or Section 3.2, the Notes will be redeemed PRO RATA or by lot or
by any other method utilized by the Trustee; PROVIDED, that if at the time of
redemption the Notes are registered as Global Notes, the Depositary shall
determine, in accordance with its procedures, the principal amount of such
Notes held by each Holder of Notes to be redeemed.
(b)The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or at such earlier time as the Company
determines and specifies in the notice of redemption, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 11:00 a.m., New York time, on the date such Redemption
Price is to be paid.
(c)If a partial redemption of the Notes would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities
are then listed, the Company shall not be permitted to effect such partial
redemption and may only redeem the Notes in whole.
SECTION 3.4 NO SINKING FUND
The Notes are not entitled to the benefit of any sinking fund.
7
<PAGE>
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD
The Company shall have the right, at any time during the term of
the Notes, from time to time to extend the interest payment period of such
Notes for up to [ ] consecutive [ ] periods (the "Extended
Interest Payment Period"). To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of
the interest payment period pursuant to this Section 4.1, will bear interest
thereon at the Coupon Rate for each [ ] period of the Extended
Interest Payment Period. At the end of the Extended Interest Payment Period
the Company shall pay all interest accrued and unpaid on the Notes including
any Additional Interest ("Deferred Interest") which shall be payable to the
holders of the Notes in whose names the Notes are registered in the Security
Register on the first record date after the end of the Extended Interest
Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period, PROVIDED that such period
together with all such further extensions thereof shall not exceed [ ]
consecutive [ ] periods. Upon the termination of any Extended
Interest Payment Period and upon the payment of all Deferred Interest then
due, the Company may select a new Extended Interest Payment Period, subject
to the foregoing requirements. No interest shall be due and payable during
an Extended Interest Payment Period, except at the end thereof.
SECTION 4.2 NOTICE OF EXTENSION
(a) If the Property Trustee is the only registered holder of the
Notes at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to both the Regular Trustees and the
Property Trustee of its selection of such Extended Interest Payment Period
one Business Day before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by the Trust are payable, or
(ii) the date the Trust is required to give notice of the record date or the
date such Distributions are payable to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only holder of the Notes at
the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Notes written notice of its selection of such
Extended Interest Payment Period 10 Business Days before the earlier of (i)
the next
8
<PAGE>
succeeding Interest Payment Date, or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange or other applicable self-regulatory organization or to
holders of the Notes.
(c) The [ ] period in which any notice is given
pursuant to paragraphs (a) or (b) of this Section 4.2 shall be counted as one
of the [ ] [ ] periods permitted in the maximum Extended Interest
Payment Period permitted under Section 4.1.
ARTICLE V
EXPENSES AND GUARANTEE
SECTION 5.1 PAYMENT OF EXPENSES
In connection with the offering, sale and issuance of the Notes to
the Property Trustee in connection with the sale of the Trust Securities by
the Trust, the Company shall:
(a) pay for all costs and expenses relating to the offering, sale
and issuance of the Note, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and the Pricing Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 7.06 of the Indenture;
(b) pay for all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
9
<PAGE>
SECTION 5.2 GUARANTEE OF PAYMENT OF EXPENSES
10
<PAGE>
The Guarantor hereby fully and unconditionally guarantees the due
and punctual payment of all amounts that become due and payable by the
Company to any Person pursuant to Section 5.1.
ARTICLE VI
SUBORDINATION
SECTION 6.1 AGREEMENT TO SUBORDINATE
The Company and the Guarantor covenant and agree, and each holder
of Notes issued hereunder by holder's acceptance thereof likewise covenants
and agrees, that all Notes shall be issued subject to the provisions of this
Article Six; and each holder of a Note, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment by the Company of the principal of, premium, if any,
and interest on all Notes issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of this, Indenture or thereafter incurred.
The payment by the Guarantor of any obligation due under the Note Guarantee
issued hereunder shall, to the extent and in the manner hereinafter set
forth, be subordinated and junior in right of payment to the prior payment in
full of all Senior Indebtedness of the Guarantor, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Six shall prevent the occurrence of
any default or Event of Default hereunder.
SECTION 6.2 DEFAULT ON SENIOR INDEBTEDNESS
In the event and during the continuation of any default by the
Company or the Guarantor in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness of the Company or the
Guarantor, as the case may be, or in the event that the maturity of any
Senior Indebtedness of the Company or the Guarantor, as the case may be, has
been accelerated because of a default, then, in either case, no payment shall
be made by the Company with respect to the principal (including redemption
and sinking fund payments) of, or premium, if any, or interest on the Notes,
including payment with respect to any obligation due under the Guarantees.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any holder when such payment is
prohibited by the preceding paragraph of this Section
11
<PAGE>
6.2, such payment shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of Senior Indebtedness or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as
their respective interests may appear, but only to the extent that the
holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee within 90 days of such
payment of the amounts then due and owing on the Senior Indebtedness and only
the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
SECTION 6.3 LIQUIDATION: DISSOLUTION; BANKRUPTCY
Upon any payment by the Company or the Guarantor, or distribution
of assets of the Company or the Guarantor of any kind or character, whether
in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company or the Guarantor,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership
or other proceedings, all amounts due upon all Senior Indebtedness of the
Company or the Guarantor, as the case may be, shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before
any payment is made by the Company or the Guarantor, as the case may be, on
account of the principal (and premium, if any) or interest on the Notes; and
upon any such dissolution or winding-up or liquidation or reorganization any
payment by the Company or the Guarantor, or distribution of assets of the
Company or the Guarantor of any kind or character, whether in cash, property
or securities, to which the holders of the Note or the Trustee would be
entitled to receive from the Company or the Guarantor, as the case may be,
except for the provisions of this Article Six, shall be paid by the Company
or the Guarantor, as the case may be, or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Notes or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness of the Company or the Guarantor, as the case may be (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company or the Guarantor, as the
case may be) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their respective interests
may appear, to the extent necessary to pay such Senior Indebtedness in full,
in money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the holders of Notes or to the Trustee.
12
<PAGE>
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company or the Guarantor of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee or the holders of the Notes
before all Senior Indebtedness of the Company or the Guarantor is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders such Senior Indebtedness
or their representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, and their respective interests may appear,
as calculated by the Company or the Guarantor, for application to the payment
of all Senior Indebtedness of the Company or the Guarantor, as the case may
be, remaining unpaid to the extent necessary to pay such Senior Indebtedness
in full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
For purposes of this Article Six, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company or
the Guarantor as reorganized or readjusted, or securities of the Company or
the Guarantor or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article Six with respect to the Notes to the
payment of all Senior Indebtedness of the Company or the Guarantor, as the
case may be, that may at the time be outstanding, PROVIDED that (i) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders
of such Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the
Company or the Guarantor with, or the merger of the Company or the Guarantor
into, another corporation or the liquidation or dissolution of the Company or
the Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article Ten of the Indenture shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 6.3 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Ten of the Indenture. Nothing in Section 6.2 or
in this Section 6.3 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.6 of the Indenture.
13
<PAGE>
SECTION 6.4 SUBROGATION
Subject to the payment in full of all Senior Indebtedness of the
Company or the Guarantor, the rights of the holders of the Notes shall be
subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the
Company or the Guarantor, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Notes shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders for such Senior Indebtedness of any
cash, property or securities to which the holders of the Notes or the Trustee
would be entitled except for the provisions of this Article Six, and no
payment over pursuant to the provisions of this Article Six, to or for the
benefit of the holders of such Senior Indebtedness by holders of the Notes or
the Trustee, shall, as between (i) the Company, its creditors other than
holders of Senior Indebtedness of the Company, and the holders of the Notes
or (ii) the Guarantor, its creditors other than the holders of Senior
Indebtedness of the Guarantor, and the holders of the Notes, be deemed to be
a payment by the Company or the Guarantor, as the case may be, to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article Six are and are intended solely for the purposes of defining the
relative rights of the holders of the Notes, on the one hand, and the holders
of such Senior Indebtedness on the other hand.
Nothing contained in this Article Six or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as between (i) the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Notes or (ii) the Guarantor, its creditors
other than the holders of Senior Indebtedness of the Guarantor, and the
holders of the Notes, the obligation of the Company or the Guarantor, as the
case may be, which is absolute and unconditional, to pay to the holders of
the Notes the principal of (and premium, if any) and interest on the Notes as
and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders
of the Notes and creditors of the Company or the Guarantor, as the case may
be, other than the holders of Senior Indebtedness of the Company or the
Guarantor, as the case may be, nor shall anything herein or therein prevent
the Trustee or the holder of any Note from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject to the
rights, if any, under this Article Six of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company or the
Guarantor, as the case may be, received upon the exercise of any such remedy.
14
<PAGE>
Upon any payment or distribution of assets of the Company or the
Guarantor referred to in this Article Six, the Trustee, subject to the
provisions of Section 7.1 of the Indenture, and the holders of the Notes,
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the holders of the
Notes, for the purposes of ascertaining the Persons entitled to participate
in such distribution, the holders of Senior Indebtedness and other
indebtedness of the Company or the Guarantor, as the case may be, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Six.
SECTION 6.5 TRUSTEE TO EFFECTUATE SUBORDINATION
Each holder of Notes by such holder's acceptance thereof authorizes
and directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Six and appoints the Trustee such holder's attorney-in-fact for any
and all such purposes.
SECTION 6.6 NOTICE BY THE COMPANY AND THE GUARANTOR
The Company or the Guarantor shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company or the
Guarantor that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Notes pursuant to the provisions of this
Article Six. Notwithstanding the provisions of this Article Six or any other
provision of the Indenture and this [ ] Supplemental Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment of monies to or by the Trustee
in respect of the Notes pursuant to the provisions of this Article Six,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Principal Office of the Trustee from the
Company or the Guarantor or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 7.1 of the Indenture, shall
be entitled in all respects to assume that no such facts exist; PROVIDED,
HOWEVER, that if the Trustee shall not have received the notice provided for
in this Section 6.6 at least two Business Days prior to the date upon which
by the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (or premium, if any) or
interest on any Note), then, anything herein contained to the contrary
15
<PAGE>
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.1 of the
Indenture, shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness
of the Company or the Guarantor, as the case may be (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
such Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Six, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Six, and if
such evidence is not furnished the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 6.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Six, in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company
or the Guarantor, the Trustee undertakes to perform or to observe only such
of its covenants and obligations as are specifically set forth in this
Article Six, and no implied covenants or obligations with respect to the
holders of such Senior Indebtedness shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to
the holders of such Senior Indebtedness and, subject to the provisions of
Section 7.1 of the Indenture, the Trustee shall not be liable to any holder
of such Senior Indebtedness if it shall pay over or deliver to holders of
Notes, the Company, the Guarantor or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of
this Article Six or otherwise.
16
<PAGE>
SECTION 6.8 SUBORDINATION MAY NOT BE IMPAIRED
No right of any present or future holder of any Senior Indebtedness
of the Company or the Guarantor to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Company or the Guarantor, as the case may be, or by
any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company or the Guarantor, as the case may be, with the
terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company or the Guarantor
may, at any time and from time to time, without the consent of or notice to
the Trustee or the holders of the Notes, without incurring responsibility to
the holders of the Notes and without impairing or releasing the subordination
provided in this Article Six or the obligations hereunder of the holders of
the Notes to the holders of such Senior Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Senior Indebtedness, or otherwise
amend or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company or the Guarantor, as the case may be, and any other Person.
ARTICLE VII
COVENANTS
SECTION 7.1 LISTING ON EXCHANGES
If the Notes are to be issued as a Global Note in connection with
the distribution of the Notes to the holders of the Preferred Securities
issued by the Trust upon a Dissolution Event, the Company will use its best
efforts to list such Notes on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed.
SECTION 7.2 DIRECT ACTION
The Company, the Guarantor and the Trustee acknowledge that
pursuant to the Declaration, the holders of Preferred Securities are
entitled, in the circumstances and subject to the
17
<PAGE>
limitations set forth therein, to commence a Direct Action (as defined
therein) with respect to any Event of Default under the Indenture, the Notes
and the Note Guarantee.
ARTICLE VIII
FORM OF NOTE
SECTION 8.1 FORM OF NOTE
The Notes, the Note Guarantee and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the
following forms:
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT - This Note is a
Global Note within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depository or a nominee of a Depository.
This Note is exchangeable for Notes registered in the name of a person
other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Note (other than a
transfer of this Note as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Note is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and
any Note 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. $
------------------------------- ---------------------------
MediaOne Group Funding, Inc.
[ ]% SUBORDINATED DEFERRABLE INTEREST NOTE
DUE [ ]
MEDIAONE GROUP FUNDING, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________ or registered assigns,
18
<PAGE>
the principal sum of Dollars on [ ] and to pay interest on said principal
sum from [ ], 199[ ] or from the most recent interest payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, [ ] (subject to deferral as set forth herein) in
arrears on [ ] of each year commencing [ ], 199[ ]
at the rate of [ ]% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any,
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the same rate per annum. The amount of interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on
this Note is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Note (or one or more Predecessor Securities, as
defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment [which shall be the close
of business on the business day next preceding such Interest Payment Date
unless otherwise provided for in the Indenture]. [IF PURSUANT TO THE
PROVISIONS OF SECTION 2.11(C) OF THE INDENTURE THE NOTES ARE NO LONGER
REPRESENTED BY A GLOBAL NOTE -- which shall be the close of business on the
____ business day next preceding such Interest Payment Date.] Any such
interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such regular
record date, and may be paid to the person in whose name this Note (or one or
more Predecessor Securities) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered holders
of this series of Notes not less than 10 days prior to such special record
date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and
the interest on this Note shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United
States of America which at the time of payment is legal tender for payment of
public and private debts; PROVIDED, HOWEVER, that payment of interest may be
made at the option of the Company by check mailed to the registered
19
<PAGE>
holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this Note is the
Property Trustee, the payment of the principal of (and premium, if any) and
interest on this Note will be made at such place and to such account as may
be designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness, and this Note is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each Holder hereof, by
his or her acceptance hereof, hereby waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such Holder upon said provisions.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Note are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
20
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated ______________ ___, 199[ ]
MEDIAONE GROUP FUNDING, INC.
By
---------------------------------
Name:
Title:
SEAL
Attest:
By
---------------------------------
Name:
Title: Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the
within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By
---------------------------------
Authorized Signatory
21
<PAGE>
[FORM OF GUARANTEE]
FOR VALUE RECEIVED, MediaOne Group, Inc., a Delaware corporation
(the "Guarantor"), hereby unconditionally guarantees to the holder of the
Security upon which this Guarantee is endorsed the due and punctual payment
of the principal of, sinking fund payment, if any, premium, if any, or
interest on said Security, when and as the same shall become due and
payable, whether at maturity, upon redemption or otherwise, according to
the terms thereof and of the Indenture referred to therein.
The Guarantor agrees to determine, at least one Business Day
prior to the date upon which a payment of principal of, sinking fund
payment, if any, premium, if any, or interest on said Security is due and
payable, whether the Company has available the funds to make such payment
as the same shall become due and payable. In case of the failure of the
Company punctually to pay any such principal, sinking fund payment, if any,
premium, if any, or interest, the Guarantor hereby agrees to cause any such
payment to be made punctually when and as the same shall become due and
payable, whether at maturity, upon redemption, or otherwise, and as if such
payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall
be unconditional, irrevocable, and absolute, irrespective of the validity,
regularity, or enforceability of said Security of said Indenture, the
absence of any action to enforce the same, any waiver or consent by the
Holder of said Security with respect to any provisions thereof, the
recovery of any judgment against the Company or any action to enforce the
same, or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in
the event of merger or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to
said Security or indebtedness evidenced thereby, and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in said Security and in this
Guarantee.
The Guarantor shall be subrogated to all rights of the holder of
said Security against the Company in respect of any amounts paid by the
Guarantor pursuant to the provisions of this Guarantee; provided, however,
that the Guarantor shall not, without the consent of the holders of all of
the Securities then outstanding, be entitled to enforce or to receive any
payments arising out of or based upon such right of subrogation until the
principal of and premium, if any, and interest on all Securities shall have
been paid in full or payment thereof shall have been provided for in
accordance with said Indenture.
22
<PAGE>
Notwithstanding anything to the contrary contained herein, if
following any payment of principal or interest by the Company on the
Securities to the holders of the Securities it is determined by a final
decision of a court of competent jurisdiction that such payment shall be
avoided by a trustee in bankruptcy (including any debtor-in-possession) as
a preference under 11 U.S.C. Section 547 and such payment is paid by such
holder to such trustee in bankruptcy, then and to the extent of such
repayment, the obligations of the Guarantor hereunder shall remain in full
force and effect.
The obligations of the Guarantor under this Guarantee are, to the
extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and this
Guarantee is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of the Security upon which this Guarantee is
endorsed, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to
take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his
or her attorney-in-fact for any and all such purposes. Each Holder of the
Security upon which this Guarantee is endorsed, by his or her acceptance
thereof, hereby waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each Holder upon said provisions.
This Guarantee shall not be valid or become obligatory for any
purpose with respect to a Security until the certificate of authentication
on such Security shall have been signed by the Trustee (or the
Authentication Agent).
This Guarantee shall be governed by the laws of the State of New
York.
IN WITNESS WHEREOF, MediaOne Group, Inc. has caused this
Guarantee to be executed.
MediaOne Group, Inc.
[SEAL]
By: By:
--------------------- ------------------------
Name: Name:
Title: Secretary Title:
23
<PAGE>
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and
pursuant to an indenture (the "Base Indenture") dated as of June 12, 1998
among the Company, MediaOne Group, Inc., a Delaware corporation, as
Guarantor (the "Guarantor") and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"), as supplemented by the [ ]
Supplemental Indenture dated as of [ ], 199[ ] among the Company, the
Guarantor and the Trustee (the Base Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Notes. By the terms of the Indenture, the
Notes are issuable in series which may vary as to amount, date of maturity,
rate of interest and in other respects as in the Indenture provided. This
series of Notes is limited in aggregate principal amount as specified in
said [ ] Supplemental Indenture.
Because of the occurrence and continuation of a Special Event,
the Company shall have the right to redeem this Note at the option of the
Company, without premium or penalty, in whole or in part within 90 days of
the occurrence of such Special Event, at a redemption price (the "Special
Event Redemption Price") equal to [ ]% of the principal amount of this
Note plus any accrued and unpaid interest thereon to the date of such
redemption.
The Company shall have the right to redeem this Note at the
option of the Company, without premium or penalty, in whole or in part, on
or after [ ] (an "Optional Redemption"), at a redemption price
(the "Optional Redemption Price") equal to [ ]% of the principal amount
per Note, plus, in each case, accrued and unpaid interest thereon to the
date of redemption for the Notes.
Any redemption will be made upon not less than 30 days nor more
than 60 days notice before the redemption date, at the Redemption Price.
If the Notes are only partially redeemed by the Company, the Notes will be
redeemed PRO RATA or by lot or by any other method utilized by the Trustee;
provided that if, at the time of redemption, the Notes are registered as a
Global Note, the Depositary shall determine the principal amount of such
Notes held by each Noteholder to be redeemed in accordance with its
procedures.
In the event of redemption of this Note in part only, a new Note
or Notes of this series for the unredeemed portion
24
<PAGE>
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Notes; PROVIDED, HOWEVER, that no such supplemental
indenture shall (i) extend the fixed maturity of any Notes of any series,
or reduce the principal amount thereof, or reduce the rate or extend the
time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Note so
affected or (ii) reduce the aforesaid percentage of Notes, the Holders of
which are required to consent to any such supplemental indenture, without
the consent of the Holders of each Note then outstanding and affected
thereby. The Indenture also contains provisions permitting the Holders of
a majority in aggregate principal amount of the Notes of any series at the
time outstanding affected thereby, on behalf of all of the Holders of the
Notes of such series, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture with respect to such series, and its consequences, except a
default in the payment of the principal of or premium, if any, or interest
on any of the Notes of such series and except as provided in Section 4.06
of the Base Indenture. Any such consent or waiver by the registered Holder
of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and premium, if any,
and interest on this Note at the time and place and at the rate and in the
money herein prescribed.
25
<PAGE>
The Company shall have the right at any time during the term of the
Notes from time to time to extend the interest payment period of such Notes
to up to [ ] consecutive [ ] periods (an "Extended Interest
Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the
rate specified for the Notes to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any such
Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, PROVIDED that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed [ ] consecutive [ ] periods. At the termination of any
such Extended Interest Payment Period and upon the payment of all accrued
and unpaid interest and any additional amounts then due, the Company may
select a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable by the registered holder
hereof on the Security Register of the Company, upon surrender of this Note
for registration of transfer at the office or agency of the Company in the
borough of Manhattan, the City and State of New York accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of
authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No
service charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note,
the Company, the Trustee, any paying agent and any Security Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all
other purposes, and neither the Company nor the Trustee nor any paying
agent nor any Note Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement
26
<PAGE>
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
[The debentures of this series are issuable only in registered form
without coupons in denominations of $[ ] and any integral multiple
thereof.] [This Global Note is exchangeable for Notes in definitive form
only under certain limited circumstances set forth in the Indenture. Notes
of this series so issued are issuable only in registered form without
coupons in denominations of $[ ] and any integral multiple thereof.]
As provided in the Indenture and subject to certain limitations [herein
and] therein set forth, Notes of this series [so issued] are exchangeable
for a like aggregate principal amount of Notes of this series of a
different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
ARTICLE IX
ORIGINAL ISSUE OF NOTES AND GUARANTEES
SECTION 9.1 ORIGINAL ISSUE OF NOTES AND GUARANTEES
Upon execution of this [ ] Supplemental Indenture, Notes in
the aggregate principal amount of $[ ] may be executed by the
Company and Note Guarantees endorsed thereon executed by the Guarantor.
Such Notes and Note Guarantees endorsed thereon may be delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver said Notes to or upon the written order of the Company, signed
by its President or any Vice President and its Secretary or an Assistant
Secretary, without any further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 RATIFICATION OF INDENTURE
The Indenture, as supplemented by this [ ] Supplemental
Indenture, is in all respects ratified and confirmed, and this [ ]
Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided. The provisions of this [
] Supplemental Indenture shall supersede the provisions of the Indenture
to the extent the Indenture is inconsistent herewith.
27
<PAGE>
SECTION 10.2 TRUSTEE NOT RESPONSIBLE FOR RECITALS
The recitals herein contained are made by the Company and not by
the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or
sufficiency of this [ ] Supplemental Indenture.
SECTION 10.3 GOVERNING LAW
This [ ] Supplemental Indenture and each Note shall be
deemed to be a contract made under the internal laws of the State of New
York, and for all purposes shall be construed in accordance with the laws
of said State.
SECTION 10.4 SEPARABILITY
In case any one or more of the provisions contained in this [ ]
Supplemental Indenture or in the Notes shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this [ ] Supplemental Indenture or of the Notes, but this [ ]
Supplemental Indenture and the Notes shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
SECTION 10.5 COUNTERPARTS
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.
28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this [ ]
Supplemental Indenture to be duly executed as of the day and year first
above written.
MEDIAONE GROUP FUNDING, INC.
By:
------------------------------
Name:
Title:
MEDIAONE GROUP, INC.
By:
------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:
------------------------------
Name:
Title:
29
<PAGE>
---------------------------------------
MEDIAONE GROUP, INC.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
PREFERRED SECURITIES GUARANTEE AGREEMENT
Dated as of [ ], 199[ ]
---------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
<TABLE>
<S> <C> <C>
SECTION 1.1 Definitions and Interpretation.. . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.. . . . . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities.. . . . . . . . . . . . . . . . 6
SECTION 2.3 Reports by the Preferred Guarantee Trustee.. . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee. . . . . . . . 7
SECTION 2.5 Evidence of Compliance with Conditions Precedent.. . . . . . . 7
SECTION 2.6 Events of Default; Waiver. . . . . . . . . . . . . . . . . . . 7
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests. . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee . . . . . 8
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee. . . . . . . . .11
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee. . . . .14
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility.. . . . . . . . . . .14
SECTION 4.2 Appointment, Removal and Resignation
of Preferred Guarantee Trustee. . . . . . . . . . . . . . . .15
i
<PAGE>
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 5.2 Waiver of Notice and Demand. . . . . . . . . . . . . . . . . .16
SECTION 5.3 Obligations Not Affected.. . . . . . . . . . . . . . . . . . .16
SECTION 5.4 Rights of Holders. . . . . . . . . . . . . . . . . . . . . . .17
SECTION 5.5 Guarantee of Payment.. . . . . . . . . . . . . . . . . . . . .18
SECTION 5.6 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 5.7 Independent Obligations. . . . . . . . . . . . . . . . . . . .18
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.. . . . . . . . . . . . . . . . . .19
SECTION 6.2 Ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 8.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . . .21
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.. . . . . . . . . . . . . . . . . . . .21
SECTION 9.2 Amendments.. . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 9.4 Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 9.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .23
</TABLE>
ii
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF SECTION OF
TRUST INDENTURE ACT GUARANTEE
OF 1939, AS AMENDED AGREEMENT
- ------------------- ---------
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(b)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4(a), 2.6
</TABLE>
- ------------------
* This Cross-Reference Table does not constitute part of the Preferred
Securities Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.
iii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of [ ], 199[ ], is executed and delivered by
MediaOne Group, Inc., a Delaware corporation (the "Guarantor"), and The First
National Bank of Chicago, as trustee (the "Preferred Guarantee Trustee"), for
the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of MediaOne Finance Trust [ ], a
Delaware statutory business trust (the "Issuer");
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of [ ], 199[ ], among the trustees
of the Issuer named therein, the Guarantor as Sponsor and the holders from
time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof $[ ] aggregate stated
liquidation amount of Preferred Securities designated the [ ]% Preferred
Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires to irrevocably and unconditionally to
agree, to the extent set forth in this Guarantee Agreement, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee Agreement") in substantially
identical terms to this Guarantee Agreement for the benefit of the holders of
the Common Securities (as defined herein) except that if an Event of Default
(as defined in the Indenture (as defined herein)), has occurred and is
continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to
the rights of Holders of Preferred Securities to receive Guarantee Payments
under this Guarantee Agreement;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise
requires:
(a) Capitalized terms used in this Guarantee Agreement but
not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in
this Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"AFFILIATE" has the same meaning as given to that term in
Rule 405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"COMMON SECURITIES" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"COVERED PERSON" means any Holder or beneficial owner of
Preferred Securities.
2
<PAGE>
"EVENT OF DEFAULT" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
"GUARANTEE PAYMENTS" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions which are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefore, (ii) the
redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions
on the Preferred Securities to the date of payment, to the extent the Issuer
shall have funds available therefor and (b) the amount of assets of the
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of
Default (as defined in the Indenture), has occurred and is continuing, the
rights of the holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee Agreement are subordinated to the
rights of Holders of Preferred Securities to receive Guarantee Payments.
"GUARANTOR" shall mean MediaOne Group, Inc., a Delaware
corporation or any permitted successor thereof under the Indenture, in its
capacity as guarantor under this Guarantee Agreement.
"HOLDER" shall mean any holder, as registered on the books
and records of the Issuer, of any Preferred Securities; PROVIDED, HOWEVER,
that in determining whether the holders of the requisite percentage of
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
3
<PAGE>
"INDENTURE" means the Indenture dated as of June 12, 1998
among MediaOne Group Funding, Inc., a Delaware corporation (the "Debenture
Issuer"), MediaOne Group, Inc., a Delaware corporation, as guarantor and The
First National Bank of Chicago, as trustee, as supplemented by a
[ ]Supplemental Indenture dated as of [ ], 199[ ] among
the Debenture Issuer, the Guarantor, as guarantor and The First National Bank
of Chicago, as trustee, and any indenture supplemental thereto pursuant to
which certain subordinated debt securities of the Debenture Issuer (the
"Debentures") and the guarantee of the Guarantor endorsed thereon (the
"Debenture Guarantee") are to be issued to the Property Trustee of the Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES"
means, except as provided by the Trust Indenture Act, Holder(s) of Preferred
Securities voting separately as a class, who vote Preferred Securities and
the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
of the Preferred Securities voted by such Holders represents more than 50% of
the above stated liquidation amount of all Preferred Securities.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
4
<PAGE>
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"PREFERRED GUARANTEE TRUSTEE" means The First National Bank
of Chicago until a Successor Preferred Guarantee Trustee has been appointed
and has accepted such appointment pursuant to the terms of this Guarantee
Agreement and thereafter means each such Successor Preferred Guarantee
Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Preferred
Guarantee Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
5
<PAGE>
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Securities
Trustee (i) within 14 days after January 1 and June 30 of each year, a list,
in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, PROVIDED THAT the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor, and (ii) at any other time, within 30 days of
receipt by the Guarantor of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the
Preferred Guarantee Trustee. The Preferred Guarantee may destroy any List of
Holders previously given to it on receipt of a new List of Holders; and
(b) the Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
Within 60 days after May 15 of each year commencing May
[ ], the Preferred Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
6
<PAGE>
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Guarantee Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of
an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default known to the Preferred Guarantee Trustee,
transmit by mail, first class postage prepaid, to the Holders of the Preferred
Securities, notices of all such Events of Default, unless such defaults have
been cured before the giving of such notice, PROVIDED, THAT, the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Preferred Guarantee Trustee in
good faith determine that the withholding of such notice is in the interests of
the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
7
<PAGE>
Preferred Guarantee Trustee shall have received written notice or a Responsible
Officer charged with the administration of the Declaration shall have obtained
written notice of.
SECTION 2.8 CONFLICTING INTERESTS.
(a) The Declaration, (b) the Preferred Securities Guarantee
Agreement dated June 12, 1998 relating to MediaOne Finance Trust I, (c) the
Preferred Securities Guarantee Agreement dated June 12, 1998 relating to
MediaOne Finance Trust II, (d) the Preferred Securities Guarantee Agreement
dated September 11, 1995 relating to MediaOne Financing A, (e) the Preferred
Securities Guarantee Agreement dated October 29, 1996 relating to MediaOne
Financing B, (f) the Amended and Restated Declaration of Trust dated June 12,
1998 of MediaOne Finance Trust I, (g) the Amended and Restated Declaration of
Trust dated June 12, 1998 of MediaOne Finance Trust II, (h) the Amended and
Restated Declaration of Trust dated September 11, 1995 of MediaOne Financing
A and (i) the Amended and Restated Declaration of Trust dated October 29,
1996 of MediaOne Financing B shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Preferred Guarantee
Trustee for the benefit of the Holders of the Preferred Securities and the
Preferred Guarantee Trustee shall not transfer this Guarantee Agreement to any
Person except a Holder of Preferred Securities exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its appointment to
act as Preferred Guarantee Trustee. The right, title and interest of the
Preferred Guarantee Trustee shall automatically vest in any Successor Preferred
Guarantee Trustee and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
8
<PAGE>
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Preferred Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Preferred Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Guarantee Agreement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs;
(d) no provision of this Guarantee Agreement shall be construed to
relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by
the express provisions of this Guarantee
Agreement, and the Preferred Guarantee Trustee
shall not be liable except for the performance of
such duties and obligations as are specifically
set forth in this Guarantee Agreement, and no
implied covenants or obligations shall be read
into this Guarantee Agreement against the
Preferred Guarantee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred
Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any
9
<PAGE>
certificates or opinions furnished to the Preferred
Guarantee Trustee and conforming to the requirements
of this Guarantee Agreement; but in the case of any
such certificates or opinions that by any provision
hereof are specifically required to be furnished
to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform
to the requirements of this Declaration;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Preferred Guarantee Trustee, unless it
shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount
of the Preferred Securities at the time outstanding
relating to the time, method and place of conducting any
proceeding for any remedy available to the Preferred
Trustee, or exercising any trust or power conferred upon
the Preferred Guarantee Trustee under this Guarantee
Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Preferred Guarantee Trustee to expend or risk its own
funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of
any of its rights or powers, if it shall have reasonable
ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms
of this Guarantee Agreement or adequate indemnity against
such risk or liability is not reasonably assured to it.
10
<PAGE>
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may rely and shall be
fully protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to
be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Guarantee
Agreement, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad
faith on its part and request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel
and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete
authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opin-
11
<PAGE>
ion. Such counsel may be counsel to the Guarantor or any
of its Affiliates, and may include any of its employees.
The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of
this Guarantee Agreement from any court of competent
jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested
in it by this Guarantee Agreement at the request or
direction of any Holder, unless such Holder shall have
provided to the Preferred Guarantee Trustee adequate
security and indemnity which would satisfy a reasonable
person in the position of the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Preferred
Guarantee Trustee PROVIDED, THAT, nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights
and powers vested in it by this Guarantee Agreement;
(vii) the Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Preferred Guarantee Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may see
fit;
(viii) the Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys and
the Preferred Guarantee Trustee shall not
12
<PAGE>
be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred
Securities and the signature of the Preferred Guarantee
Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party
shall be required to inquire as to the authority of the
Preferred Guarantee Trustee to so act, or as to its
compliance with any of the terms and provisions of this
Guarantee Agreement, both of which shall be conclusively
evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action; and
(x) whenever in the administration of this Guarantee Agreement
the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder the
Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of
the Preferred Securities, (ii) may refrain from enforcing
such remedy or right or taking such other action until
such instructions are received, and (iii) shall be
protected in acting in accordance with such instructions;
and
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
(c) No provision of this Guarantee Agreement shall be deemed to
empower the Preferred Guarantee Trustee to vary the investment of any Holder of
13
<PAGE>
the Preferred Securities or to act in a manner inconsistent with the status of
the Issuer as a grantor trust for federal income tax purposes.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not assume
any responsibility for their correctness. The Preferred Guarantee Trustee makes
no representations as to the validity or sufficiency of this Guarantee
Agreement.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then for the purposes of this Section
4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of
condition so published;
14
<PAGE>
(b) if at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c);
and
(c) if the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION
OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor;
(b) the Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor;
(c) the Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee; and
(d) if no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, appoint a Successor Preferred Guarantee Trustee.
15
<PAGE>
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that
16
<PAGE>
results from the extension of any interest payment period on the Debentures
or any extension of the maturity date of the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation on the Holders or any other Person to
give notice to, or obtain consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.4 RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Guarantee Agreement or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Guarantee Agreement; and
(b) notwithstanding the rights of the Preferred Guarantee Trustee to
enforce this Guarantee Agreement under Article III, any Holder of Preferred
Securities may institute a legal proceeding directly against the Guarantor to
enforce the Preferred Guarantee Trustee's rights under this Guarantee Agreement,
without
17
<PAGE>
first instituting a legal proceeding against the Issuer, the Preferred
Guarantee Trustee or any other Person. The Guarantor waives any right or
remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 GUARANTEE OF PAYMENT.
This Guarantee Agreement creates a guarantee of payment and not of
collection.
SECTION 5.6 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee Agreement; PROVIDED,
HOWEVER, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
18
<PAGE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, (a) the
Guarantor will not (and the Guarantor will cause the Debenture Issuer not to)
declare or pay any dividend on, or make any distributions with respect to, or
redeem, purchase, or make a liquidation payment with respect to, any of its
capital stock, and (b) the Guarantor will not (and the Guarantor will cause the
Debenture Issuer not to) make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities (including
guarantees) which rank pari passu with or junior to the Debentures, if at such
time (i) there shall have occurred any Event of Default or (ii) there shall have
occurred any Event of Default under the Declaration; PROVIDED, THAT, clause (a)
above does not apply to any stock dividends paid by the Guarantor where the
dividend stock is the same as that on which the dividend is being paid.
SECTION 6.2 RANKING.
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, including the Debenture Guarantee, (ii)
pari passu with the most senior Preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter entered into by
the Guarantor in respect of any Preferred or preference stock of any Affiliate
of the Guarantor, and (iii) senior to the Guarantor's common stock; PROVIDED,
THAT, this Guarantee Agreement shall be pari passu with the guarantee issued by
the Guarantor in connection with (w) the 9.30% Trust Originated Preferred
Securities of MediaOne Finance Trust I, (x) the 9.50% Trust Originated Preferred
Securities of MediaOne Finance Trust II, (y) the 7.96% Trust Originated
Preferred Securities of MediaOne Financing A and (z) the 8.25% Trust Originated
Preferred Securities of MediaOne Financing B.
19
<PAGE>
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION.
This Guarantee Agreement shall terminate upon full payment of the
Redemption Price of all Preferred Securities, upon the distribution of the
Debentures to the Holder's of all of the Preferred Securities or upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Preferred Securities must restore payment of
any sums paid under the Preferred Securities or under this Preferred Securities
Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee
Agreement and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions; and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions (as defined in the Declaration) to Holders of Preferred
Securities might properly be paid.
20
<PAGE>
SECTION 8.2 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this in accordance with this Guarantee Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions; and
(b) to the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
The provisions of this Section 8.2 shall survive termination of this
Guarantee or the resignation or removal of the Preferred Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding.
SECTION 9.2 AMENDMENTS.
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
21
<PAGE>
Guarantee Agreement may only be amended with the prior approval of the Holders
of at least a Majority in liquidation amount of the Preferred Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 NOTICES.
All notices provided for in this Guarantee Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Preferred Guarantee Trustee at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
(b) if given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
MediaOne Group, Inc.
188 Inverness Drive West
Englewood, Colorado 80112
(c) if given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
22
<PAGE>
SECTION 9.4 BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders of
the Preferred Securities and subject to Section 3.1(a) is not separately
transferable from the Preferred Securities.
SECTION 9.5 GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
23
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
MEDIAONE GROUP, INC.
By:______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGOas
Preferred Guarantee Trustee
By:______________________________
Name:
Title:
24
<PAGE>
EXHIBIT 5-A
[Letterhead of Morris, Nichols, Arsht & Tunnell]
October 15, 1998
The MediaOne Finance Trusts
(as defined below)
188 Inverness Drive West
Englewood, Colorado 80112
Re: The MediaOne Finance Trusts
---------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to MediaOne Finance
Trust III, MediaOne Finance Trust IV, MediaOne Finance Trust V and MediaOne
Finance Trust VI, each a Delaware statutory business trust (collectively
referred to herein as the "MediaOne Finance Trusts" and each individually as
a "MediaOne Finance Trust"), in connection with certain matters relating to
the creation of the MediaOne Finance Trusts and the proposed issuance of
Preferred Securities therein to beneficial owners pursuant to and as
described in Registration Statement Nos. 333-65371, 333-65371-01,
333-65371-02, 333-65371-03, 333-65371-04 and 333-65371-05 (and the prospectus
forming a part thereof) on Form S-3 filed with the Securities and Exchange
Commission (the "Commission") by MediaOne Group, Inc., a Delaware corporation
(the "Company"), MediaOne Group Funding, Inc., a Delaware corporation
("Funding"), and the MediaOne Finance Trusts on October 6, 1998 (as so filed
and hereafter amended, the "Registration Statement"). Capitalized terms used
herein and not otherwise herein defined are used with respect to each
MediaOne Finance Trust as defined in the draft dated October 13, 1998 - 5:11
PM of the form of Amended and Restated Declaration of Trust (the "Draft
Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificates of Trust of each
MediaOne Finance Trust, each as filed in the Office of the Secretary of the
State of Delaware (the "State Office") on October 5, 1998 (the Certificate of
Trust of each MediaOne Finance Trust is referred to herein as a
"Certificate"); the Declaration of Trust of each MediaOne Finance Trust, each
dated as of October 5, 1998 (the Declaration of Trust of each MediaOne
Finance Trust is referred to herein
<PAGE>
The MediaOne Finance Trusts
October 15, 1998
Page 2
as an "Original Governing Instrument"); the Draft Governing Instrument; the
Indenture dated as of June 12, 1998 between the Company, Funding and Norwest
Bank Minnesota, National Association, as Trustee and the form of Supplemental
Indenture to be entered into in connection therewith; the form of Preferred
Securities Guarantee to be made by the Company and the First National Bank of
Chicago, as trustee, with respect to each MediaOne Finance Trust (each, a
"Guarantee Agreement"); the Registration Statement as originally filed with
the Commission; and a certification of good standing of each MediaOne Finance
Trust obtained as of a recent date from the State Office. In such
examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as drafts
or copies or forms of documents to be executed and the legal capacity of
natural persons to complete the execution of documents. We have further
assumed for purposes of this opinion: (i) the due formation, organization or
creation, valid existence and good standing of each MediaOne Finance Trust
and each entity that is a party to any of the documents reviewed by us under
the laws of the jurisdiction of its respective formation, organization or
creation; (ii) the due authorization, execution and delivery by, or on behalf
of, each of the parties thereto of the above referenced documents with
respect to each MediaOne Finance Trust; (iii) that the Company, The First
National Bank of Chicago, First Chicago Delaware Inc. and the appropriate
Regular Trustees will duly authorize, execute and deliver an amended and
restated declaration of trust for each MediaOne Finance Trust in the form of
the Draft Governing Instrument (each, a "Governing Instrument") and all other
documents contemplated thereby or by the Registration Statement to be
executed in connection with the creation of each MediaOne Finance Trust and
the issuance by each MediaOne Finance Trust of Preferred Securities, in each
case prior to the first issuance of Preferred Securities of such MediaOne
Finance Trust; (iv) that the Preferred Securities of each MediaOne Finance
Trust will be offered and sold pursuant to the prospectus forming a part of
the Registration Statement and a prospectus supplement thereto (collectively,
the "Prospectus") that will be consistent with, and accurately describe, the
terms of the applicable Governing Instrument and the applicable Guarantee
Agreement relating to each such MediaOne Finance Trust and all other relevant
documents; (v) that no event has occurred subsequent to the filing of any
Certificate, or will occur prior to the issuance of all Preferred Securities
by each MediaOne Finance Trust, that would cause a dissolution or liquidation
of any MediaOne Finance Trust under the applicable Original Governing
Instrument or the applicable Governing Instrument; (vi) that the activities
of each MediaOne Finance Trust have been and will be conducted in accordance
with its Original Governing Instrument or Governing Instrument, as
applicable, and the Delaware Business Trust Act, 12 DEL. C. Sections 3801 ET
SEQ. (the "Delaware Act"); (vii) that prior to the first issuance of
Preferred Securities by each MediaOne Finance Trust, payment of the required
consideration therefor will have been made in accordance with the terms and
conditions of the applicable Governing Instrument and as described in the
Prospectus, and that the Preferred Securities of each MediaOne Finance Trust
are otherwise issued and sold in accordance with the terms, conditions,
requirements and procedures set forth in the Governing Instrument of such
MediaOne Finance Trust and as described in the Prospectus; and (viii) that
the documents examined by us, or contemplated hereby, express the entire
understanding of the parties thereto with respect to the subject matter
thereof and have not been, and, prior to the issuance of all Preferred
Securities by each MediaOne Finance Trust, will not
<PAGE>
The MediaOne Finance Trusts
October 15, 1998
Page 3
be, amended, supplemented or otherwise modified, except as herein referenced.
No opinion is expressed with respect to the requirements of, or compliance
with, federal or state securities or blue sky laws. Further, we express no
opinion with respect to the Registration Statement or any other offering
materials relating to the Preferred Securities offered by any MediaOne
Finance Trust and we assume no responsibility for their contents. As to any
fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above referenced documents and on
the accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects
to matters of Delaware law, it is our opinion that, upon issuance, the
Preferred Securities of each MediaOne Finance Trust will constitute validly
issued and, subject to the terms of the applicable Governing Instrument,
fully paid and non-assessable beneficial interests in the assets of such
MediaOne Finance Trust. We note that pursuant to each Governing Instrument,
each MediaOne Finance Trust may withhold amounts otherwise distributable to a
Holder of Securities in such MediaOne Finance Trust and pay over such amounts
to the applicable jurisdictions in accordance with federal, state and local
law and any amounts withheld will be deemed to have been distributed to such
Holder and that, pursuant to the Governing Instrument, the Preferred Security
Holders of each MediaOne Finance Trust may be obligated to make payments or
provide indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to a
pre-effective amendment to the Registration Statement and to the use of our
name under the heading "LEGAL OPINIONS" in the prospectus forming a part
thereof. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Commission thereunder. This opinion speaks only as of the date hereof and is
based on our understandings and assumptions as to present facts, and our
review of the above referenced documents and the application of Delaware law
as the same exist on the date hereof, and we undertake no obligation to
update or supplement this opinion after the date hereof for the benefit of
any person or entity with respect to any facts or circumstances that may
hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the
benefit of the addressees hereof in connection with the matters contemplated
hereby and may not be relied upon by any other person or entity or for any
other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
<PAGE>
EXHIBIT 5-B
[Letterhead of Weil, Gotshal & Manges LLP]
October 15, 1998
MediaOne Group, Inc.
188 Inverness Drive West
Englewood, Colorado 80112
Ladies and Gentlemen:
We have acted as counsel to MediaOne Group, Inc., a Delaware
corporation ("MediaOne Group"), MediaOne Group Funding, Inc., a Delaware
corporation ("MediaOne Group Funding"), and MediaOne Finance Trust III,
MediaOne Finance Trust IV, MediaOne Finance Trust V and MediaOne Finance
Trust VI, each a Delaware business trust (the "Trusts"), in connection with
the preparation of the registration statement of MediaOne Group, MediaOne
Group Funding and the Trusts on Form S-3 (Registration No. 333-65371), filed
with the Securities and Exchange Commission (the "Commission") on October 6,
1998 and amended by Amendment No. 1 filed with the Commission on October 15,
1998 (as amended, the "Registration Statement"), relating to the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of
preferred securities of the Trusts (the "Preferred Securities") and
subordinated debt securities of MediaOne Group Funding (the "Subordinated
Notes"). The Subordinated Notes will be fully and unconditionally guaranteed
by MediaOne Group (the "Note Guarantees"). The Subordinated Notes and the
Note Guarantees will be issued in accordance with the provisions of an
indenture (the "Indenture") dated June 12, 1998, among MediaOne Group,
MediaOne Group Funding and Norwest Bank Minnesota, National Association, as
trustee (the "Trustee"), which is filed as an exhibit to the Registration
Statement. The Indenture will be supplemented for each series of
Subordinated Notes (each a "Supplemental Indenture"), the form of which is
being filed as an exhibit to the Registration Statement. The Preferred
Securities will be guaranteed by MediaOne Group in the manner and to the
extent set forth in the guarantee agreements (the "Preferred Securities
Guarantees"), the form of which is filed as an exhibit to the Registration
Statement.
In so acting, we have reviewed the Registration Statement, including
the prospectus (the "Prospectus") contained
<PAGE>
MediaOne Group, Inc.
October 15, 1998
Page 2
therein, the Indenture the forms of Supplemental Indenture, Subordinated
Note, Note Guarantee and Preferred Securities Guarantee. In addition, we
have examined originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public
officials and of officers and representatives of MediaOne Group and MediaOne
Group Funding, and have made such inquiries of such officers and
representatives, as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth. In such examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents. As to all questions of fact material to this opinion that have
not been independently established, we have relied upon certificates or
comparable documents of officers and representatives of MediaOne Group and
MediaOne Group Funding. Based on the foregoing, and subject to the
qualifications stated herein, we are of the opinion that:
1. The Subordinated Notes have been duly and validly authorized
by MediaOne Group Funding and, when executed, authenticated, issued and
delivered in the manner contemplated in the Indenture and the applicable
Supplemental Indenture, will constitute the legal, valid and binding
obligations of MediaOne Group Funding, entitled to the benefits of the
Indenture and the applicable Supplemental Indenture and enforceable against
it in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and subject to the
qualification that (i) the waiver of rights under any usury laws contained in
the Indenture may be unenforceable and (ii) we express no opinion as to the
effect on the Subordinated Notes of the laws of any jurisdiction other than
the State of New York and the federal laws of the United States, including
laws which limit the rates of interest legally chargeable or collectible.
2. The Note Guarantees have been duly and validly authorized by
MediaOne Group and, when executed, authenticated, issued and delivered in the
manner contemplated in the Indenture and the applicable Supplemental Indenture,
will constitute the
<PAGE>
MediaOne Group, Inc.
October 15, 1998
Page 3
legal, valid and binding obligations of MediaOne Group, entitled to the
benefits of the Indenture and the applicable Supplemental Indenture and
enforceable against it in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity) and
subject to the qualification that (i) the waiver of rights under any usury
laws contained in the Indenture may be unenforceable and (ii) we express no
opinion as to the effect on the Note Guarantees of the laws of any
jurisdiction other than the State of New York and the federal laws of the
United States, including laws which limit the rates of interest legally
chargeable or collectible.
3. The Preferred Securities Guarantees have been duly and validly
authorized by MediaOne Group and, when executed and delivered by MediaOne
Group, will constitute the legal, valid and binding obligation of MediaOne
Group, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law
or in equity).
The opinions expressed herein are limited to the laws of the State
of New York, the corporate laws of the State of Delaware and the federal laws
of the United States, and we express no opinion as to the effect on the
matters covered by this letter of the laws of any other jurisdiction.
We understand that you have received an opinion from Morris,
Nichols, Arsht & Tunnell, special Delaware counsel for MediaOne Group,
MediaOne Group Funding and the Trusts. We are expressing no opinion with
respect to the matters contained in such opinion.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the references to this firm under the
heading "Legal Opinions" in the Prospectus.
Very truly yours,
Weil, Gotshal & Manges LLP
/s/ Weil, Gotshal & Manges LLP
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
_____________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b) (2)
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
A U.S. NATIONAL BANKING ASSOCIATION 41-1592157
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national Identification No.)
bank)
SIXTH STREET AND MARQUETTE AVENUE
Minneapolis, Minnesota 55479
(Address of principal executive offices) (Zip code)
Stanley S. Stroup, General Counsel
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
(612) 667-1234
(Agent for Service)
_____________________________
MEDIAONE GROUP FUNDING, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 84-1028672
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
188 INVERNESS DRIVE WEST
ENGLEWOOD, COLORADO 80112
(Address of principal executive offices) (Zip code)
_____________________________
SUBORDINATED DEBT SECURITIES OF MEDIAONE GROUP FUNDING, INC.
(Title of the indenture securities)
<PAGE>
Item 1. GENERAL INFORMATION. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency
Treasury Department
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
The Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the trustee.
No responses are included for Items 3-14 of this Form T-1 because the obligor is
not in default as provided under Item 13.
Item 15. FOREIGN TRUSTEE. Not applicable.
Item 16. LIST OF EXHIBITS. List below all exhibits filed as a part of this
Statement of Eligibility.
Norwest Bank incorporates by reference into this
Form T-1 the exhibits attached hereto.
Exhibit 1. a. A copy of the Articles of Association of the
trustee now in effect.*
Exhibit 2. a. A copy of the certificate of authority of the
trustee to commence business issued June 28, 1872,
by the Comptroller of the Currency to The
Northwestern National Bank of Minneapolis.*
b. A copy of the certificate of the Comptroller of the
Currency dated January 2, 1934, approving the
consolidation of The Northwestern National Bank of
Minneapolis and The Minnesota Loan and Trust Company of
Minneapolis, with the surviving entity being titled
Northwestern National Bank and Trust Company of
Minneapolis.*
c. A copy of the certificate of the Acting
Comptroller of the Currency dated January 12,
1943, as to change of corporate title of
Northwestern National Bank and Trust Company of
Minneapolis to Northwestern National Bank of
Minneapolis.*
<PAGE>
d. A copy of the letter dated May 12, 1983 from the
Regional Counsel, Comptroller of the Currency,
acknowledging receipt of notice of name change
effective May 1, 1983 from Northwestern National
Bank of Minneapolis to Norwest Bank Minneapolis,
National Association.*
e. A copy of the letter dated January 4, 1988 from
the Administrator of National Banks for the
Comptroller of the Currency certifying approval of
consolidation and merger effective January 1, 1988
of Norwest Bank Minneapolis, National Association
with various other banks under the title of
"Norwest Bank Minnesota, National Association."*
Exhibit 3. A copy of the authorization of the trustee to exercise
corporate trust powers issued January 2, 1934, by
the Federal Reserve Board.*
Exhibit 4. Copy of By-laws of the trustee as now in effect.*
Exhibit 5. Not applicable.
Exhibit 6. The consent of the trustee required by Section 321(b)
of the Act.
Exhibit 7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.**
Exhibit 8. Not applicable.
Exhibit 9. Not applicable.
* Incorporated by reference to exhibit number 25 filed with
registration statement number 33-66026.
** Incorporated by reference to exhibit number 25 filed with registration
statement number 333-62999.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, Norwest Bank Minnesota, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Minneapolis and State of Minnesota on the 6th day of October 1998.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Jane Y. Schweiger
-----------------------------
Jane Y. Schweiger
Corporate Trust Officer
<PAGE>
EXHIBIT 6
October 6, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, the undersigned hereby consents that reports of examination of the
undersigned made by Federal, State, Territorial, or District authorities
authorized to make such examination may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
/s/ Jane Y. Schweiger
-------------------------------
Jane Y. Schweiger
Corporate Trust Officer
