<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 1995
REGISTRATION NO. 33-56271
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------------
TELE-COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
DELAWARE 84-1260157
(STATE OR OTHER (I.R.S. EMPLOYER
JURISDICTION IDENTIFICATION NO.)
OF INCORPORATION OR 5619 DTC PARKWAY
ORGANIZATION) ENGLEWOOD, COLORADO 80111-3000
(303) 267-5500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
STEPHEN M. BRETT, ESQ.
TELE-COMMUNICATIONS, INC.
TERRACE TOWER II
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111-3000
(303) 267-5500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
ROBERT W. MURRAY JR., ESQ.
BAKER & BOTTS, L.L.P.
885 THIRD AVENUE
NEW YORK, NEW YORK 10022-4834
(212) 705-5000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
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, check the following box: [X]
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred Stock(3)(4)......................
- -------------------------------------------
Depositary Shares(4)....................... (2) (2) (2) N/A
- -------------------------------------------
Common Stock(5)............................
- -------------------------------------------
Warrants(6)................................
- ----------------------------------------------------------------------------------------------------------------
Total.................................. $575,000,000(7) 100% $575,000,000(7) $198,276(8)
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
(2) Not applicable pursuant to Form S-3 General Instruction II.D.
(3) Subject to note (7) below, there are being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time, by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Preferred Stock as shall be issuable upon
exercise of Warrants (after giving effect to anti-dilution adjustments) to
purchase Preferred Stock registered hereby.
(4) Subject to note (7) below, there are being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the
Registrant elects to offer to the public fractional interests in shares of
Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests, and the
shares of Preferred Stock will be issued to the depositary under the
Deposit Agreement.
(5) Subject to note (7) below, there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion or redemption of Preferred Stock (after giving effect to anti-
dilution adjustments) registered hereby and upon exercise of Warrants
(after giving effect to anti-dilution adjustments) to purchase Common Stock
registered hereby.
(6) Subject to note (7) below, there are being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Preferred Stock or Common Stock registered hereby.
(7) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$575,000,000. Any securities registered hereunder may be sold separately or
as units with other securities registered hereunder.
(8) The entire amount of the registration fee was previously paid by the
Registrant.
--------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 11, 1995
PROSPECTUS
LOGO TELE-COMMUNICATIONS, INC.
COMMON STOCK PREFERRED STOCK WARRANTS
----------
Tele-Communications, Inc. (the "Company") may offer from time to time (i)
shares of the Company's common stock, which may be Class A Common Stock, $1.00
par value per share ("Class A Common Stock"), Class B Common Stock, $1.00 par
value per share ("Class B Common Stock"), and/or any class of common stock that
may hereafter be created through an amendment to the Company's Restated
Certificate of Incorporation (collectively, "Common Stock"); (ii) shares of the
Company's Series Preferred Stock, $.01 par value per share ("Preferred Stock"),
which may be issued in the form of depositary shares evidenced by depositary
receipts ("Depositary Shares"), and (iii) warrants ("Warrants") to purchase
shares of Common Stock or Preferred Stock (which shares of Preferred Stock may
be issued in the form of Depositary Shares) (the Common Stock, Preferred Stock
and Warrants are collectively referred to as the "Offered Securities"), or any
combination of the foregoing, at an aggregate initial offering price not to
exceed $575,000,000, at prices and on terms to be determined at or prior to the
time of sale. Different classes of Common Stock may be offered in such amounts,
at market prices prevailing at the time of sale or at prices and on terms to be
determined at or prior to the time of sale and to be set forth in supplements
to this Prospectus. See "Description of Common Stock." The Preferred Stock may
be issued as convertible Preferred Stock which, unless previously redeemed or
otherwise purchased, will be convertible at any time during the specified
conversion period into shares of one or more classes of Common Stock. The
Preferred Stock may be offered as separate series in amounts, at prices, and on
terms to be determined at the time of sale and to be set forth in supplements
to this Prospectus. See "Description of Preferred Stock." The Warrants may be
issued in one or more separate series and may be offered independent of any
offering of Common Stock or Preferred Stock, or may be offered in combination
with any offering of Common Stock or Preferred Stock, in which case such
Warrants may remain attached to such Common Stock or Preferred Stock or may be
separable from such Common Stock or Preferred Stock. See "Description of
Warrants."
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement ("Prospectus Supplement"). Such terms shall include, without
limitation, the following: (i) in the case of Common Stock, the class, number
of shares, initial public offering price, any redemption provisions, any
conversion or exchange rights, voting rights, and the terms of the offering and
sale thereof; (ii) in the case of Preferred Stock, the designation, number of
shares, liquidation preference per share, initial public offering price,
dividend rate (or method of calculation thereof), dates on which dividends
shall be payable and dates from which dividends shall accrue, any redemption or
sinking fund provisions, any conversion or exchange rights, voting rights, and
whether the Company has elected to offer the Preferred Stock in the form of
Depositary Shares; and (iii) in the case of Warrants, the number and terms
thereof, the designation and the number of securities issuable upon their
exercise, the exercise price, the exercise period, the initial public offering
price, the terms of the offering and sale thereof and, where applicable, the
duration and detachability thereof.
The Company may sell Offered Securities on a negotiated or competitive bid
basis to or through underwriters or dealers designated from time to time, which
may be a group of underwriters represented by one or more managing
underwriters. In addition, the Offered Securities may be sold directly by the
Company to other purchasers or through agents. See "Plan of Distribution." The
names of any such underwriters, dealers, managing underwriters, purchasers, or
agents involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters, dealers,
purchasers, or agents will be set forth in the Prospectus Supplement. See "Plan
of Distribution" for possible indemnification arrangements for agents, dealers
and underwriters.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by the Prospectus Supplement applicable to the Offered
Securities being sold.
SEE "CERTAIN CONSIDERATIONS" FOR CERTAIN FACTORS THAT SHOULD BE CAREFULLY
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE OFFERED SECURITIES.
----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------
The date of this Prospectus is January , 1995.
<PAGE>
The Company was incorporated in 1994 under the name "TCI/Liberty Holding
Company" for the purpose of combining the Company's predecessor, Tele-
Communications, Inc. (renamed "TCI Communications, Inc." and referred to herein
as "TCIC"), and Liberty Media Corporation ("Liberty"). On August 4, 1994 the
mergers (the "TCI/Liberty Combination") of TCIC and Liberty with separate
wholly-owned subsidiaries of the Company were consummated in a tax-free
transaction and each of TCIC and Liberty became wholly-owned subsidiaries of
the Company. In connection with the TCI/Liberty Combination, the Company
changed its name to Tele-Communications, Inc. and TCIC changed its name to TCI
Communications, Inc. UNLESS THE CONTEXT INDICATES OTHERWISE, AS USED IN THIS
PROSPECTUS THE TERM "COMPANY" MEANS, ON AND AFTER AUGUST 4, 1994, TELE-
COMMUNICATIONS, INC. (FORMERLY NAMED "TCI/LIBERTY HOLDING COMPANY") AND, BEFORE
AUGUST 4, 1994, TCIC (FORMERLY NAMED "TELE-COMMUNICATIONS, INC."), AND THEIR
RESPECTIVE CONSOLIDATED SUBSIDIARIES.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments and exhibits, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended, in connection with this offering. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, information statements, and other
information with the Commission. Such reports, proxy statements, information
statements, and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and at 7 World Trade
Center, Suite 1300, New York, New York 10048; and copies of such material can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the following
documents filed with the Commission under the Exchange Act: (i) the Company's
Annual Report on Form 10-K for the year ended December 31, 1993, as amended by
Form 10-K/A (Amendment 1) (Commission File No. 0-5550), (ii) the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, as amended
by Form 10-Q/A (Amendment 1) (Commission File No. 0-5550), (iii) the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 (Commission
File No. 0-5550), (iv) the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1994, as amended by Form 10-Q/A (Amendment 1) and
Form 10-Q/A (Amendment 2) (Commission File No. 0-20421), (v) the Company's
Current Reports on Form 8-K dated February 15, 1994, February 25, 1994, April
6, 1994, and May 27, 1994, as amended by Form 8-K/A (Amendment 1) (Commission
File No. 0-5550), and (vi) the Company's Current Reports on Form 8-K dated
August 5, 1994, August 18, 1994, August 26, 1994, October 27, 1994, and
December 2, 1994 (Commission File No. 0-20421).
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act after the date hereof and prior
to the termination of the offering of the Offered Securities shall be deemed to
be incorporated herein by reference and to be a part hereof from the respective
dates of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or
2
<PAGE>
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a Prospectus
is delivered, on the written or oral request of any such person, a copy of any
or all of the documents incorporated by reference herein other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
into the documents that this Prospectus incorporates). Such requests should be
addressed to Stephen M. Brett, Esq., Executive Vice President and General
Counsel, Tele-Communications, Inc., Terrace Tower II, 5619 DTC Parkway,
Englewood, Colorado 80111-3000; telephone (303) 267-5500.
CERTAIN CONSIDERATIONS
The following factors, among others, should be considered carefully before
making an investment decision with respect to any Offered Securities.
Losses. The Company incurred a net loss in each of the three fiscal years in
the period ended December 31, 1993 and losses from continuing operations in the
fiscal years ended December 31, 1993 and December 31, 1991. The Company had net
earnings for the nine-month periods ended September 30, 1994 and 1993.
Notwithstanding the losses it has incurred, the Company has been able to, and
expects to continue to be able to, satisfy its debt service and other
obligations as and when they become due. The Company's Operating Cash Flow
(operating income before depreciation, amortization and other non-cash credits
or charges) ($1,858 million, $1,637 million, and $1,430 million for the years
ended December 31, 1993, 1992 and 1991, respectively, and $1,339 million, and
$1,409 million for the nine-month periods ended September 30, 1994 and 1993,
respectively) has historically been sufficient to cover its interest expense
($731 million, $718 million, and $826 million for the years ended December 31,
1993, 1992, and 1991, respectively, and $568 million and $549 million for the
nine-month periods ended September 30, 1994 and 1993, respectively). The
Company's interest coverage ratio for the years ended December 31, 1993, 1992,
and 1991 was 254%, 228%, and 173%, respectively, and for the nine months ended
September 30, 1994 and 1993 was 236% and 257%, respectively. Operating Cash
Flow is a measure of value and borrowing capacity within the cable television
industry and is not intended to be a substitute for cash flows provided by
operating activities, a measure of performance prepared in accordance with
generally accepted accounting principles, and should not be relied upon as
such.
Ratios of Earnings to Combined Fixed Charges and Preferred Stock
Dividends. The ratio of earnings to combined fixed charges and preferred stock
dividends was 1.02 and 1.22 for the years ended December 31, 1992 and 1993,
respectively, and 1.32 and 1.04 for the nine months ended September 30, 1993
and 1994, respectively. The ratio of earnings to combined fixed charges and
preferred stock dividends was less than 1.00 for the years ended December 31,
1991, 1990, and 1989 as earnings available for combined fixed charges and
preferred stock dividends were inadequate to cover combined fixed charges and
preferred stock dividends for such periods. See "Ratios of Earnings to Combined
Fixed Charges and Preferred Stock Dividends." The amounts of the coverage
deficiencies for the years ended December 31, 1991, 1990, and 1989 were
$177,000,000, $399,000,000, and $430,000,000, respectively. On a pro forma
basis, the effect of (i) the proposed merger with TeleCable Corporation and
(ii) the TCI/Liberty Combination would change the historical ratios of earnings
to combined fixed charges and preferred stock dividends for the nine months
ended September 30, 1994 from 1.04 to 1.31 and for the year ended December 31,
1993 from 1.22 to 1.18. For the ratio calculations, earnings available for
combined fixed charges and preferred stock dividends consist of earnings
(losses) before income taxes plus combined fixed charges and preferred stock
dividends (minus capitalized interest), distributions from and (earnings)
losses of less than 50%-owned affiliates with debt not guaranteed by the
Company (net of earnings not distributed of less than 50%-owned affiliates),
and minority interest in earnings (losses) of consolidated subsidiaries (other
than preferred stock dividend requirements). Combined fixed charges and
preferred stock dividends consist of (i) interest (including capitalized
interest) on indebtedness, excluding interest to 50%-owned affiliates, (ii) the
Company's proportionate share of interest of 50%-owned affiliates, (iii) that
portion of rental expense the Company believes to be representative of
3
<PAGE>
interest (one-third of rental expense), (iv) amortization of deferred debt
expense, (v) that portion of minority interest in earnings of consolidated
subsidiaries that represents preferred stock dividend requirements, excluding
preferred stock dividend requirements to 50%-owned affiliates, and (vi)
preferred stock dividend requirements of 50%-owned affiliates, other than
amounts to the Company. The Company has guaranteed the debt of certain less
than 50%-owned affiliates and certain other entities in which it has an
interest. Fixed charges of $13,833,000, $2,517,000, $506,000, $710,000, and
$745,000 relating to such guarantees for the years ended December 31, 1993,
1992, 1991, 1990, and 1989 respectively, and fixed charges of $10,676,000 and
$1,888,000 relating to such guarantees for the nine months ended September 30,
1994 and 1993, respectively, and on a pro forma basis, fixed charges of
$10,676,000 and $14,365,000 relating to such guarantees for the nine months
ended September 30, 1994 and for the year ended December 31, 1993,
respectively, have not been included in fixed charges.
Holding Company Structure; Restrictions on Dividends. The Company is a
holding company and its assets consist solely of investments in its
subsidiaries. All of the consolidated liabilities of the Company have been
incurred by its subsidiaries. The Company's rights, and therefore the extent to
which the holders of Common Stock and Preferred Stock will be able to
participate in the distribution of assets of any subsidiary upon the latter's
liquidation or reorganization, will be subject to prior claims of the
subsidiary's creditors, including trade creditors, except to the extent that
the Company may itself be a creditor with recognized claims against such
subsidiary (in which case the claims of the Company would still be subject to
the prior claims of any secured creditor of such subsidiary and of any holder
of indebtedness of such subsidiary that is senior to that held by the Company).
The Company's ability to pay dividends on the Common Stock or Preferred
Stock, and on any other classes and series of securities ranking on a parity
with the Common Stock or any class or series of Preferred Stock, is dependent
upon the ability of the Company's subsidiaries to distribute amounts to the
Company in the form of dividends, loans, or advances or in the form of
repayment of loans and advances from the Company. The subsidiaries are separate
and distinct legal entities and have no obligation, contingent or otherwise, to
pay any dividends on the Common Stock or Preferred Stock or to make any funds
available therefor, whether by dividends, loans, or other payments. The payment
of dividends, loans, or advances to the Company by its subsidiaries may be
subject to statutory or regulatory restrictions, is contingent upon the cash
flows generated by those subsidiaries, and is subject to various business
considerations. Further, certain of the Company's subsidiaries are subject to
loan agreements that prohibit or limit the transfer of funds by such
subsidiaries to the Company in the form of dividends, loans, or advances and
require that such subsidiaries' indebtedness to the Company be subordinate to
the indebtedness under such loan agreements. The amount of net assets of
subsidiaries subject to such restrictions exceeds the Company's consolidated
net assets.
THE COMPANY
The Company, through its subsidiaries and affiliates, is principally engaged
in the construction, acquisition, ownership, and operation of cable television
systems and the provision of satellite-delivered video entertainment,
information, and home shopping programming services to various video
distribution media, principally cable television systems. The Company also has
investments in cable and telecommunications operations and television
programming in certain international markets as well as investments in
companies and joint ventures involved in developing and providing programming
for new television and telecommunications technologies. The Company is a
Delaware corporation and its executive offices are located at Terrace Tower II,
5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500.
The Company is organized into four principal business groups: Domestic Cable
and Communications; Domestic Programming; International Cable and Programming;
and Technology/Venture Capital.
DOMESTIC CABLE AND COMMUNICATIONS
Based on the number of basic subscribers served by the Company and its
affiliates, the Company is the largest provider of cable television services in
the United States. At September 30, 1994, the Company, through its
subsidiaries, operated cable television systems serving approximately 11.3
million basic subscribers
4
<PAGE>
throughout the continental United States and Hawaii (12.1 million after giving
pro forma effect to the proposed merger with TeleCable Corporation). In
addition, at December 31, 1993, the Company's affiliates accounted for under
the equity method provided cable television services to approximately 4.7
million basic subscribers.
In addition to its cable television systems, the Company has an investment,
along with other cable television operators, in Teleport Communications Group,
Inc. ("TCG"). TCG believes that, based on the number of route miles served by
TCG and its subsidiaries, it is the nation's largest competitive access
provider. The Company intends to expand further its telephony investments as
permitted by applicable federal and state regulatory authorities. The Company
also has an investment in Primestar Partners, a direct broadcast satellite
service.
Subsidiaries of the Company, Comcast Corporation ("Comcast"), Cox Cable
Communications, Inc. ("Cox"), and Sprint Corporation ("Sprint") have formed a
partnership ("WirelessCo") to engage in the business of providing wireless
communications services on a nationwide basis. At the date of this Prospectus,
through WirelessCo, the partners are bidding for broadband personal
communications services ("PCS") licenses in auctions (the "PCS Auctions") being
conducted by the Federal Communications Commission. The PCS Auctions commenced
in December 1994, and WirelessCo applied for eligibility to bid for licenses in
39 of the 51 Major Trading Areas ("MTAs") for which PCS licenses are being
auctioned. WirelessCo may also invest in, affiliate with, or acquire licenses
from successful bidders in the PCS Auctions. The Company owns a 30% interest in
WirelessCo. Subsidiaries of Cox, Sprint, and the Company have also formed a
separate partnership, in which the Company owns a 35.3% interest, to bid for
PCS licenses for the Philadelphia MTA. The Company cannot predict the cost of
obtaining licenses in the PCS Auctions or the likelihood that WirelessCo and
the Philadelphia partnership will be successful bidders for any of the PCS
licenses for which they have applied to bid. If the respective bidding
strategies of WirelessCo and the Philadelphia partnership are successful,
however, the capital required to fund the license costs and the construction of
the PCS systems will be substantial and the Company's share thereof would
represent a material increase in its capital requirements.
The Company, Comcast, Cox (collectively, the "Cable Partners"), and Sprint
have also agreed upon the basis upon which they would negotiate a definitive
agreement for the formation of a partnership ("NewTelco") to engage in the
business of providing local wireline communications services to residences
and businesses on a nationwide basis, using cable television facilities of the
Cable Partners and other cable television operators that agree to affiliate
with NewTelco. The parties intend that the Cable Partners would contribute
their interests in TCG and its affiliated entities and other competitive access
businesses to NewTelco. The Company currently owns an approximately 29.9%
interest in TCG and would own a 30% interest in NewTelco. The modification or
repeal of existing regulatory and legislative barriers to competition in the
local telephony market will be necessary in order for NewTelco to provide its
proposed services in most states. Formation of NewTelco is subject to certain
conditions including the negotiation of a definitive partnership agreement and
contribution agreement. The contributions of TCG and other competitive access
businesses to NewTelco will be subject, among other things, to the receipt of
necessary regulatory and other consents and approvals.
DOMESTIC PROGRAMMING
The Company and its affiliates provide satellite-delivered video
entertainment, information, and home shopping television services to video
distribution outlets, including cable television systems, broadcast television
stations, and the direct-to-home satellite market. The Company has ownership
interests in several domestic programming businesses, including Turner
Broadcasting System, Inc.; Discovery Communications, Inc.; Home Shopping
Network Inc.; QVC, Inc.; Encore Media Corporation; BET Holdings, Inc.;
International Family Entertainment; E! Entertainment Television; and two
national and 15 regional sports networks. Recently, the Company launched
STARZ!, a first-run premium programming service. The Company is also the owner
of Netlink USA, one of the larger providers, based on its number of
subscribers, of programming packages to home satellite dish owners.
5
<PAGE>
INTERNATIONAL CABLE AND PROGRAMMING
The Company has significant investments in cable and telecommunications
operations and television programming in international markets. The Company
seeks to invest in markets with favorable regulatory environments and
attractive growth opportunities. Among its overseas investments, the Company
has a 38.7% interest in TeleWest Communications plc ("TeleWest"), a joint
venture with U S WEST Communications, Inc. TeleWest provides cable television
and residential and business cable telephony in the United Kingdom. The Company
also has a majority interest in Flextech plc, which provides television
programming in the United Kingdom through its interests in Bravo, The
Children's Channel, UK Gold, UK Living and The Family Channel UK. Through
certain other joint ventures, the Company has interests in cable television
systems and television programming in Hungary, Norway, Sweden, Israel, Ireland,
Malta, France, Chile, Puerto Rico, the Dominican Republic, New Zealand,
Australia, Singapore, and Japan.
TECHNOLOGY/VENTURE CAPITAL
The Company is an investor in companies and joint ventures involved in
developing and providing programming for new television and telecommunications
technologies. Current investments and technologies under development include
interactive and set-top box technology, entertainment software, and other
services for wireline and wireless switched broadband interactive networks. The
Company has formed a joint venture with Sega of America and Time Warner
Entertainment Company, L.P. to develop and market the first video game channel,
called "The Sega Channel." More recently, the Company has made investments in
TSX Corporation, a producer of communications equipment, and Interactive
Network, Inc., a developer of interactive television programming systems. The
Company has announced a proposed investment in Acclaim Entertainment, Inc.
("Acclaim") and the formation of a joint venture with Acclaim that will develop,
acquire and distribute games and other interactive entertainment software over
various telecommunications networks. The Company has also created the National
Digital Television Center, a provider of digital compression and authorization
services to programming suppliers and to cable television systems and other
video distribution outlets.
In addition to its technology investments, the Company operates Western Tele-
Communications, Inc., a wholesale provider of long distance video, voice, data
and other telecommunications services.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Offered Securities may
be used, together with internally generated funds: (i) for general corporate
purposes, which may include funding of current and future (a) investments, both
domestic and international, in cable, satellite, and telephony distribution
systems and related ventures, (b) programming investments and/or (c)
developmental expenses and investments in new telecommunications technologies
and related programming; (ii) to repay, redeem, or repurchase outstanding
indebtedness; (iii) for acquisitions, capital expenditures, and working capital
requirements; and/or (iv) for such other purposes as may be specified in a
Prospectus Supplement. All or a portion of such proceeds may be advanced to
subsidiaries of the Company in the form of loans or as a contribution to
capital.
A description of any indebtedness to be repaid with the proceeds of the
Offered Securities will be set forth in the Prospectus Supplement. Specific
plans, arrangements, or agreements, written or oral, with respect to any
material acquisitions by the Company by merger or otherwise, or with respect to
any material disposition of assets by the Company, if any, will, to the extent
not disclosed in a document incorporated by reference herein, be disclosed in
the Prospectus Supplement.
Pending application of the net proceeds to the foregoing uses, the net
proceeds will be added to working capital and invested in short-term interest-
bearing obligations.
6
<PAGE>
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's ratios of earnings to combined
fixed charges and preferred stock dividends for the nine month periods ended
September 30, 1994 and 1993 and for each of the five fiscal years in the
period ended December 31, 1993. The table also sets forth the unaudited pro
forma ratios of earnings to combined fixed charges and preferred stock
dividends for the nine months ended September 30, 1994 and for the fiscal year
ended December 31, 1993, giving pro forma effect to (i) the proposed merger
with TeleCable Corporation and (ii) the TCI/Liberty Combination, which was
effected on August 4, 1994, as if such transactions had occurred prior to
January 1, 1993. The pro forma ratios are not necessarily indicative of the
ratios of earnings to combined fixed charges and preferred stock dividends
that would have been obtained if such transactions had been effective at or
prior to January 1, 1993.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
--------------------- ------------------------------------
PRO FORMA PRO FORMA
1994 1994 1993 1993 1993 1992 1991 1990 1989
--------- ----- ----- --------- ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
combined
fixed charges and pre-
ferred stock divi-
dends(1).............. 1.31x 1.04x 1.32x 1.18x 1.22x 1.02x -- -- --
</TABLE>
- --------
(1) For the ratio calculations, earnings available for combined fixed charges
and preferred stock dividends consist of earnings (losses) before income
taxes plus combined fixed charges and preferred stock dividends (minus
capitalized interest), distributions from and (earnings) losses of less
than 50%-owned affiliates with debt not guaranteed by the Company (net of
earnings not distributed of less than 50%-owned affiliates), and minority
interests in earnings (losses) of consolidated subsidiaries (other than
preferred stock dividend requirements). Combined fixed charges and
preferred stock dividends consist of (i) interest (including capitalized
interest) on indebtedness, excluding interest to 50%-owned affiliates,
(ii) the Company's proportionate share of interest of 50%-owned
affiliates, (iii) that portion of rental expense the Company believes to
be representative of interest (one-third of rental expenses), (iv)
amortization of deferred debt expense, (v) that portion of minority
interest in earnings of consolidated subsidiaries that represents
preferred stock dividend requirements, excluding preferred stock dividend
requirements to 50%-owned affiliates, and (vi) preferred stock dividend
requirements of 50%-owned affiliates, other than amounts payable to the
Company. The Company has guaranteed the debt of certain less than 50%-
owned affiliates and certain other entities in which it has an interest.
Fixed charges of $13,833,000, $2,517,000, $506,000, $710,000, and $745,000
relating to such guarantees for the years ended December 31, 1993, 1992,
1991, 1990, and 1989, respectively, and $10,676,000 and $1,888,000 for the
nine months ended September 30, 1994 and 1993, respectively, and, on a pro
forma basis, fixed charges of $10,676,000 and $14,365,000 relating to such
guarantees for the nine months ended September 30, 1994 and for the year
ended December 31, 1993, respectively, have not been included in fixed
charges. The ratio of earnings to combined fixed charges and preferred
stock dividends was less than 1.00 for the years ended December 31, 1991,
1990, and 1989 as earnings available for combined fixed charges and
preferred stock dividends were inadequate to cover combined fixed charges
and preferred stock dividends for such periods. The amount of the coverage
deficiencies for the years ended December 31, 1991, 1990, and 1989 were
$177,000,000, $399,000,000, and $430,000,000, respectively. On a pro forma
basis, the effect of (i) the proposed merger with TeleCable Corporation
and (ii) the TCI/Liberty Combination would change the historical ratios of
earnings to combined fixed charges and preferred stock dividends for the
nine months ended September 30, 1994 from 1.04 to 1.31 and for the year
ended December 31, 1993 from 1.22 to 1.18.
DESCRIPTION OF COMMON STOCK
Class A and Class B Common Stock. The statements below describing the Class
A Common Stock and the Class B Common Stock are in general terms and in all
respects are subject to and qualified in their entirety by reference to the
applicable provisions of the Company's Restated Certificate of Incorporation
and Bylaws.
The Company is authorized to issue 1,100,000,000 shares of Class A Common
Stock and 150,000,000 shares of Class B Common Stock. Each share of Class A
Common Stock has one vote and each share of Class B Common Stock has 10 votes
per share. The Class A and Class B Common Stock are otherwise identical in all
respects, except that each share of Class B Common Stock is convertible into
one share of Class A Common Stock at the option of the holder. A number of
shares of Class A Common Stock equal to the number of shares of Class B Common
Stock outstanding from time to time are set aside and reserved for issuance
upon conversion of shares of Class B Common Stock. The Class A Common Stock is
not convertible into Class B Common Stock.
7
<PAGE>
Subject to the preferential rights, if any, of holders of any then
outstanding preferred stock, the holders of the Class A and Class B Common
Stock are entitled to receive dividends when and as declared by the Board of
Directors out of funds legally available for such payment. Holders of Class A
and Class B Common Stock have no preemptive rights to purchase additional
shares. Subject to the preferential rights of holders of any then outstanding
preferred stock, the holders of Class A and Class B Common Stock are entitled
to share ratably in the assets of the Company available for distribution to
stockholders in the event of the Company's liquidation, dissolution, or winding
up.
The holders of the Class A and Class B Common Stock vote as one class for the
election of directors and have no cumulative voting rights in the election of
directors. The Company's Restated Certificate of Incorporation also provides
that the Board of Directors be divided into three classes of approximately
equal size, with one class to be elected for a three-year term at each annual
meeting of stockholders.
The Restated Certificate of Incorporation may be amended or repealed only
upon a vote of the holders of 66 2/3% of the total voting power of the
outstanding Class A and Class B Common Stock and any then outstanding preferred
stock entitled to vote with the Class A and Class B Common Stock generally on
matters submitted to stockholders for a vote (collectively "Voting Stock"),
voting as one class, and the Company's Bylaws may be amended only upon the
affirmative vote of at least 75% of the members of the Board of Directors, or
by a vote of holders of 66 2/3% of the total voting power of the outstanding
Voting Stock, voting as a single class. In addition, the Restated Certificate
of Incorporation provides that, subject to the rights of the holders of any
class or series of preferred stock, a vote of the holders of 66 2/3% of the
total voting power of the outstanding Voting Stock, voting as a single class,
is required to remove directors (who may be removed only for cause) and to
approve dissolution and certain mergers, consolidations, sales of assets, and
similar transactions.
Other Classes of Common Stock. The Company may create, after the date of this
Prospectus, one or more additional classes of Common Stock through an amendment
to the Company's Restated Certificate of Incorporation. Any such amendment
would require a vote of the holders of 66 2/3% of the total voting power of the
outstanding Voting Stock, voting as a single class. See "Class A and Class B
Common Stock" above. Except as described in a Prospectus Supplement relating to
a new class of Common Stock, any additional classes of Common Stock will be
identical in all respects to the Class A and Class B Common Stock.
On November 17, 1994, the Company announced that its Board of Directors had
approved a plan to create several new classes of Common Stock intended to track
and reflect the performance of each of the Company's four principal business
groups ("Tracking Common Stock"). Those groups comprise the following
operations of the Company: Domestic Cable and Communications; Domestic
Programming; International Cable and Programming; and Technology/Venture
Capital. For a summary description of each group, see "The Company." The
Tracking Common Stock may be initially issued in any one or more of several
ways to be determined by the Board of Directors, including as a rights offering
or an exchange offer to stockholders; as a distribution on outstanding shares
of Class A and Class B Common Stock; in one or more public offerings for cash;
in connection with future acquisitions or investments; or in a sale to
strategic investors. After the issuance of any class of Tracking Common Stock,
holders of such class would remain stockholders of the Company. Accordingly,
the Company would continue to be the owner of the subsidiaries in which the
four business groups are conducted, and holders of Tracking Common Stock would
have no direct equity interest in any such subsidiary. The issuance of any
class of Tracking Common Stock is subject to various contingencies, including
the approval of an amendment to the Company's Restated Certificate of
Incorporation, which would authorize each class of Tracking Common Stock, by
the holders of 66 2/3% of the total voting power of the outstanding Voting
Stock, voting as a single class, and further approvals by the Board of
Directors of the Company of the issuance of any class of Tracking Common Stock.
There can be no assurance that all such contingencies will be satisfied
(including that such approvals will be obtained) or that any class of Tracking
Common Stock will ultimately be issued by the Company.
The Prospectus Supplement relating to any class of Common Stock that is
created after the date of this Prospectus will set forth (i) the title of such
class of Common Stock and the number of shares offered; (ii)
8
<PAGE>
any special dividend rights; (iii) any special rights on liquidation; (iv) any
redemption provisions; (v) any conversion or exchange rights; (vi) voting
rights; and (vii) any relative, participating, optional, and special rights and
qualifications, limitations, and restrictions that are different from or in
addition to those pertaining to the Class A and Class B Common Stock. If any
class of such Common Stock consists of Tracking Common Stock, the Prospectus
Supplement relating thereto will also include a detailed description of the
business group the performance of which such Tracking Common Stock is intended
to reflect, combined financial information for such business group prepared in
accordance with generally accepted accounting principles, and a management's
discussion and analysis of financial condition and results of operations of
such business group.
DESCRIPTION OF PREFERRED STOCK
The Company is authorized to issue up to 12,375,096 shares of preferred
stock, divided into 700,000 shares of Class A Preferred Stock ("Class A
Preferred Stock"), 1,675,096 shares of Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock ("Class B Preferred Stock"), and 10,000,000
shares of Series Preferred Stock. The Series Preferred Stock is issuable in one
or more series, with such designations, preferences, and relative,
participating, optional, or other special rights, qualifications, limitations,
or restrictions thereof as shall be stated or expressed in a resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors. All shares of any one series of the Series Preferred Stock are
required to be alike in every particular and all series are required to rank
equally and be identical in all respects, except insofar as they may vary with
respect to matters which the Board of Directors is expressly authorized by the
Company's Restated Certificate of Incorporation to determine in the resolution
or resolutions providing for the issue of any series of the Series Preferred
Stock. As of the date of this Prospectus, the Company has issued and
outstanding three series of Series Preferred Stock and the Board of Directors
has approved the issuance of a fourth series of Series Preferred Stock. For a
description of each outstanding class and series of the Company's preferred
stock and of the fourth series of Series Preferred Stock proposed to be issued
by the Company, see "--Outstanding Preferred Stock" below.
As described under "Description of Depositary Shares" below, the Company may,
at its option, elect to offer Depositary Shares evidenced by depositary
receipts, each representing an interest in a fraction (to be specified in the
Prospectus Supplement relating to the particular series of Preferred Stock) of
a share of the particular series of Preferred Stock issued and deposited with a
depositary, in lieu of offering any shares of such series of Preferred Stock.
See "Description of Depositary Shares."
The Preferred Stock shall have the dividend, liquidation, redemption, and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (a) the
designation of such Preferred Stock and the number of shares offered; (b) the
amount of liquidation preference per share; (c) the initial public offering
price at which such Preferred Stock will be issued; (d) the dividend rate (or
method of calculation), the dates on which dividends shall be payable and the
dates from which dividends shall commence to cumulate, if any; (e) any
redemption or sinking fund provisions; (f) any conversion or exchange rights;
(g) whether the Company has elected to offer Depositary Shares as described
below under "Description of Depositary Shares;" and (h) any additional voting
and other rights, preferences, privileges, limitations, and restrictions of
such series of Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable and
will have no preemptive rights. The rights of the holders of each series of the
Preferred Stock to receive dividends and distributions of assets will be
subordinate to those of the Company's general creditors, but superior to the
rights of holders of any capital stock of the Company ranking junior to the
Preferred Stock as to the payment of dividends, rights of redemption, and
rights on liquidation, including the Class A and Class B Common Stock. See
"Certain Considerations--Holding Company Structure; Restrictions on Dividends."
9
<PAGE>
DIVIDEND RIGHTS
Holders of Preferred Stock of each series will be entitled to receive, when,
as, and if declared by the Board of Directors of the Company, out of funds of
the Company legally available therefor, cash dividends on such dates and at
such rates as are set forth in, or as are determined by the method described
in, the Prospectus Supplement relating to such series of Preferred Stock. Such
rate may be fixed or variable or both. Each such dividend will be payable to
the holders of record as they appear on the stock books of the Company (or, if
applicable, the records of the Depositary (as hereinafter defined) referred to
under "Description of Depositary Shares") on such record dates, fixed by the
Board of Directors of the Company, as specified in the Prospectus Supplement
relating to such series of Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Preferred Stock. If the Board
of Directors of the Company fails to declare a dividend payable on a dividend
payment date on any series of Preferred Stock for which dividends are
noncumulative, then the right to receive a dividend in respect of the dividend
period ending on such dividend payment date will be lost, and the Company will
have no obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
dates. Dividends on the shares of each series of Preferred Stock for which
dividends are cumulative will accrue from the date on which the Company
initially issues shares of such series.
Unless otherwise specified in the applicable Prospectus Supplement, if at any
time the Company shall have failed to pay, or declare and set aside the
consideration sufficient to pay, full dividends on any series of Preferred
Stock for the immediately preceding dividend period (or, if such Preferred
Stock is cumulative, for all prior dividend periods), and until such dividends
(or, if such Preferred Stock is cumulative, full cumulative dividends) are
paid, or declared and the consideration sufficient to pay the same in full is
set aside for such purpose and for no other purpose, the Company may not (i)
declare or pay any dividend on or make any distribution with respect to any
class or series of capital stock of the Company ranking pari passu with or
junior to such series of Preferred Stock, except for dividends declared and
paid on any such stock ranking on a parity basis with such Preferred Stock
contemporaneously and on a pro rata basis with dividends declared and paid on
such Preferred Stock, or (ii) redeem or otherwise acquire any shares of such
series of Preferred Stock, any parity stock, or any junior stock unless all
then outstanding shares of such Preferred Stock and any other class or series
of parity stock that by the terms of the instrument creating or evidencing such
parity stock is required to be redeemed under such circumstances are redeemed.
The failure of the Company to pay, or declare and set aside the consideration
sufficient to pay, full dividends (or, if such Preferred Stock is cumulative,
full cumulative dividends) on any series of Preferred Stock shall not prevent
the Company from (i) paying any dividends on junior stock solely in shares of
junior stock or the redemption or other acquisition of junior stock solely in
exchange for (together with a cash adjustment for fractional shares, if any)
shares of junior stock or (ii) paying any dividends on parity stock solely in
shares of parity stock or junior stock (or both) or the redemption or other
acquisition of shares of such series of Preferred Stock or parity stock solely
in exchange for shares junior stock.
LIQUIDATION PREFERENCES
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of any liquidation, dissolution, or winding up of the Company, whether
voluntary or involuntary, the holders of each series of Preferred Stock will be
entitled to receive out of the assets of the Company available for distribution
to stockholders, before any distribution of assets is made to the holders of
any capital stock of the Company ranking junior to the shares of such series of
Preferred Stock, the amount set forth in the Prospectus Supplement relating to
such series of Preferred Stock. If, upon any voluntary or involuntary
liquidation, dissolution, or winding up of the Company, the assets of the
Company available for distribution to the holders of shares of such series of
Preferred Stock and any other shares of capital stock of the Company ranking on
a parity with shares of such Preferred Stock upon liquidation will not be
sufficient to pay in full all amounts to
10
<PAGE>
which such holders are entitled, no such distribution will be made on account
of any other class or series of capital stock ranking on a parity as to
liquidation preference with the shares of such Preferred Stock unless
proportionate distributive amounts are paid on account of shares of such series
of Preferred Stock and shares of such parity stock ratably in proportion to the
full respective preferential amounts to which they are entitled. After payment
to the holders of Preferred Stock of the full preferential amounts of the
liquidating distribution to which they are entitled, the holders thereof will
be entitled to no further participation in any distribution of assets by the
Company.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or from time to
time in part, at the option of the Company or the holder (or both), and may be
subject to mandatory redemption pursuant to a sinking fund or otherwise, in
each case upon terms, at the times, and at the redemption prices set forth in
the Prospectus Supplement relating to such series. Unless otherwise provided in
the applicable Prospectus Supplement, shares of a series of Preferred Stock
redeemed by the Company will be restored to the status of authorized but
unissued shares of Series Preferred Stock.
In the event that fewer than all of the outstanding shares of a series of
Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or
pro rata (subject to rounding to avoid fractional shares) as may be determined
by the Company or by any other method as may be determined by the Company in
its sole discretion to be equitable. From and after the redemption date (unless
default is made by the Company in providing for the payment of the redemption
price plus accumulated and unpaid dividends, if any) dividends will cease to
accumulate on the shares of Preferred Stock called for redemption and all
rights of the holders thereof (except the right to receive the redemption price
plus accumulated and unpaid dividends, if any) will cease.
Unless otherwise specified in the applicable Prospectus Supplement, if the
Company fails to redeem any shares of a series of Preferred Stock required to
be redeemed on a redemption date, and until such shares are redeemed in full,
the Company may not declare or pay any dividend on or make any distribution
with respect to any class or series of capital stock ranking junior to such
series of Preferred Stock, and neither the Company nor any subsidiary may
redeem any parity stock or junior stock, or purchase or otherwise acquire any
shares of such series of Preferred Stock, parity stock or junior stock. The
failure of the Company to so redeem shares of such series of Preferred Stock
shall not prevent the Company from (i) paying any dividends on junior stock
solely in shares of junior stock or the redemption or other acquisition of
junior stock solely in exchange for (together with a cash adjustment for
fractional shares, if any) shares of junior stock or (ii) the redemption or
other acquisition of shares of such Preferred Stock or parity stock solely in
exchange for shares of parity stock or junior stock (or both).
EXCHANGE OR CONVERSION RIGHTS
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of a
particular class of Common Stock, another series of Preferred Stock or any
other capital stock of the Company will be set forth in the Prospectus
Supplement relating thereto.
VOTING RIGHTS
Except as indicated in a Prospectus Supplement relating to a particular
series of the Preferred Stock, or except as required by applicable law, the
holders of the Preferred Stock will not be entitled to vote for any purpose.
11
<PAGE>
OUTSTANDING PREFERRED STOCK
The following is a brief description of certain terms of the outstanding
classes and series of preferred stock of the Company. The description does not
purport to be complete and is qualified in its entirety by reference to the
Company's Restated Certificate of Incorporation (including the Certificate of
Designations with respect to each outstanding series of Series Preferred
Stock).
Class A Preferred Stock. The Company is authorized to issue 700,000 shares of
Class A Preferred Stock, of which 592,798 were issued and outstanding as of the
date of this Prospectus and all of which were held by a wholly owned subsidiary
of the Company. The dividend, liquidation, and redemption features of the Class
A Preferred Stock, each of which is discussed below, are determined by
reference to the liquidation value of the Class A Preferred Stock, which as of
any date of determination will be equal, on a per share basis, to the sum of
(i) $322.84, plus (ii) all dividends accrued on such share through the dividend
payment date on or immediately preceding such date of determination to the
extent not paid on or before such date, plus (iii), for purposes of determining
liquidation and redemption payments, all unpaid dividends accrued on the sum of
clauses (i) and (ii) above, to such date of determination.
Subject to the prior preferences and other rights of any class or series of
preferred stock ranking prior to the Class A Preferred Stock with respect to
the declaration or payment of dividends, the holders of Class A Preferred Stock
are entitled to receive preferential cumulative cash dividends when and as
declared by the Board of Directors out of unrestricted funds legally available
therefor. Dividends accrue cumulatively at an annual rate of 9 3/8% of the
liquidation value per share, whether or not such dividends are declared or funds
are legally or contractually available for payment of dividends. Dividends not
paid on any dividend payment date are added to the liquidation value on such
date and remain a part thereof until such dividends and all dividends accrued
thereon are paid in full.
Upon the dissolution, liquidation, or winding up of the Company, holders of
Class A Preferred Stock will be entitled to receive from the assets of the
Company available for distribution to stockholders an amount in cash or
property or a combination thereof, per share, equal to the liquidation value.
The Class A Preferred Stock is subject to optional redemption at any time by
the Company, in whole or in part, and to mandatory redemption by the Company on
the twelfth anniversary of the issue date, in each case at a redemption price
per share equal to the liquidation value of the Class A Preferred Stock.
The Class A Preferred Stock ranks senior to the Class A and Class B Common
Stock and Class B Preferred Stock and on a parity basis with the Series C
Preferred Stock (as defined below) and the Series E Preferred Stock (as defined
below) as to dividend rights, rights to redemptions and rights on liquidation.
For so long as any dividends are in arrears on the Class A Preferred Stock or
any class or series of preferred stock of the Company ranking pari passu with
the Class A Preferred Stock which is entitled to payment of cumulative
dividends prior to the redemption or other acquisition of the Class A Preferred
Stock, and until all dividends accrued up to the immediately preceding dividend
payment date on the Class A Preferred Stock and any such parity stock shall
have been paid or declared and set apart so as to be available for payment in
full thereof and for no other purpose, neither the Company nor any subsidiary
thereof may redeem or otherwise acquire any shares of Class A Preferred Stock,
any parity stock, or any class or series of capital stock of the Company
ranking junior to the Class A Preferred Stock, or set aside any money or assets
for any such purpose, unless all of the outstanding shares of Class A Preferred
Stock and such parity stock are redeemed. For so long as any dividends are in
arrears on the Class A Preferred Stock and until all dividends accrued up to
the immediately preceding dividend payment date on the Class A Preferred Stock
shall have been paid or declared and set apart so as to be available for
payment in full thereof and for no other purpose, the Company may not declare
or pay any dividend on or make any distribution with respect to any junior
stock or parity stock or set aside any money or assets for any such purpose,
except for dividends declared and paid on parity stock contemporaneously
and on a pro rata basis with dividends declared and
12
<PAGE>
paid on the Class A Preferred Stock. If the Company fails to redeem shares of
Class A Preferred Stock required to be redeemed on a redemption date, the
Company may not declare or pay any dividend on or make any distribution with
respect to any junior stock or set aside money or assets for any such purpose,
and neither the Company nor any subsidiary may redeem any parity stock or
junior stock, or purchase or otherwise acquire any Class A Preferred Stock,
parity stock or junior stock, or set aside any money or assets for any such
purpose, until such shares are redeemed in full. The failure of the Company to
pay any dividends on any class or series of parity stock or to redeem on any
date fixed for redemption any shares of Class A Preferred Stock shall not
prevent the Company from (i) paying any dividends on junior stock solely in
shares of junior stock or the redemption or other acquisition of junior stock
solely in exchange for (together with a cash adjustment for fractional shares,
if any), or (but only in the case of failure to pay dividends on any parity
stock) through the application of the proceeds from the sale of shares of
junior stock; or (ii) the payment of dividends on any parity stock solely in
shares of parity stock and/or junior stock or the redemption or other
acquisition of Class A Preferred Stock or parity stock solely in exchange for
(together with a cash adjustment for fractional shares, if any), or (but only
in the case of a failure to pay dividends on any parity stock) through the
application of the proceeds from the sale of shares of parity stock and/or
junior stock.
The Class A Preferred Stock has no voting rights, except as required by the
Delaware General Corporation Law (the "DGCL"), and except that at such time as
any shares of Class A Preferred Stock are not held by the Company or its
majority-owned subsidiaries, such shares will vote with the Class A and Class B
Common Stock, on the basis of one vote per share, in any general election of
directors of the Company.
Class B Preferred Stock. The Company is authorized to issue 1,675,096 shares
of Class B Preferred Stock, all of which were issued and outstanding as of the
date of this Prospectus. Subject to the prior preferences and other rights of
any class or series of preferred stock ranking prior to the Class B Preferred
Stock with respect to the payment of dividends, the holders of Class B
Preferred Stock are entitled to receive preferential cumulative dividends, when
and as declared by the Board of Directors out of unrestricted funds legally
available therefor. Dividends accrue cumulatively (but without compounding) at
an annual rate of 6% of the stated liquidation value of $100 per share (the
"Stated Liquidation Value"), whether or not such dividends are declared or
funds are legally available for the payment of dividends. Accrued dividends are
payable annually and, in the sole discretion of the Board of Directors, may be
declared and paid in cash, in shares of Class A Common Stock or in any
combination of the foregoing. Accrued dividends not paid as provided above on
any dividend payment date will accumulate and such accumulated unpaid dividends
may be declared and paid in cash, shares of Class A Common Stock, or any
combination thereof at any time without reference to any regular dividend
payment date to holders of record of Class B Preferred Stock as of a special
record date fixed by the Board of Directors. No interest or additional
dividends will accrue or be payable with respect to any dividend payment on the
Class B Preferred Stock that may be in arrears or with respect to that portion
of any other payment on the Class B Preferred Stock that is in arrears which
consists of accumulated or accrued and unpaid dividends.
Upon the liquidation, dissolution, or winding up of the Company, the holders
of Class B Preferred Stock will be entitled, after payment of preferential
amounts on any class or series of preferred stock ranking prior to the Class B
Preferred Stock with respect to liquidating distributions, to receive from the
assets of the Company available for distribution to stockholders an amount in
cash or property or a combination thereof, per share, equal to the Stated
Liquidation Value, plus all accumulated and accrued but unpaid dividends
thereon to the date of payment.
The Class B Preferred Stock is redeemable at any time at the option of the
Company, in whole or in part, for a redemption price per share payable in cash
equal to the Stated Liquidation Value, plus all accumulated and accrued but
unpaid dividends thereon to and including the redemption date. The Company does
not have any mandatory obligation to redeem the Class B Preferred Stock as of
any fixed date, at the option of the holders or otherwise.
13
<PAGE>
Subject to the prior preferences and other rights of any class or series of
preferred stock, the Class B Preferred Stock is exchangeable at the option of
the Company in whole but not in part at any time for junior subordinated debt
securities of the Company ("Junior Exchange Notes"). If the Company exercises
its optional exchange right, each holder of outstanding shares of Class B
Preferred Stock will be entitled to receive in exchange therefor newly issued
Junior Exchange Notes of a series authorized and established for the purpose of
such exchange, the aggregate principal amount of which will be equal to the
aggregate Stated Liquidation Value of the shares of Class B Preferred Stock so
exchanged by such holder, plus all accumulated and accrued but unpaid dividends
thereon to and including the exchange date. The Junior Exchange Notes will
mature on the fifteenth anniversary of the date of issuance and will be subject
to earlier redemption at the option of the Company, in whole or in part, for a
redemption price equal to the principal amount thereof plus accrued but unpaid
interest. Interest will accrue, and be payable annually, on the principal
amount of the Junior Exchange Notes at a rate per annum to be determined prior
to issuance by adding a spread of 215 basis points to the "Fifteen Year
Treasury Rate" (as defined in the Indenture pursuant to which the Junior
Exchange Notes will be issued). Interest will accrue on overdue principal at
the same rate, but will not accrue on overdue interest.
The Class B Preferred Stock ranks senior to the Class A and Class B Common
Stock and junior to the Class A Preferred Stock, the Series C Preferred Stock,
and the Series E Preferred Stock as to dividend rights, rights to redemption,
and rights on liquidation.
For so long as any dividends are in arrears on the Class B Preferred Stock or
any class or series of preferred stock of the Company ranking pari passu with
the Class B Preferred Stock which is entitled to payment of cumulative
dividends prior to the redemption, exchange, purchase, or other acquisition of
the Class B Preferred Stock, and until all dividends accrued up to the
immediately preceding dividend payment date on the Class B Preferred Stock and
such parity stock shall have been paid or declared and set apart so as to be
available for payment in full thereof and for no other purpose, neither the
Company nor any subsidiary thereof may redeem, exchange, purchase, or otherwise
acquire any shares of Class B Preferred Stock, any such parity stock or any
class or series of its capital stock ranking junior to the Class B Preferred
Stock, or set aside any money or assets for such purpose, unless all of the
outstanding shares of Class B Preferred Stock and such parity stock are
redeemed. For so long as any dividends are in arrears on the Class B Preferred
Stock and until all dividends accrued up to the immediately preceding dividend
payment date on the Class B Preferred Stock shall have been paid or declared
and set apart so as to be available for payment in full thereof and for no
other purpose, the Company may not declare or pay any dividend on or make any
distribution with respect to any junior stock or parity stock or set aside any
money or assets for any such purpose, except for dividends declared and paid on
parity stock contemporaneously and on a pro rata basis with dividends declared
and paid on the Class B Preferred Stock. If the Company fails to redeem or
exchange shares of Class B Preferred Stock on a date fixed for redemption or
exchange, and until such shares are redeemed or exchanged in full, the Company
may not redeem or exchange any parity stock or junior stock, declare or pay any
dividend on or make any distribution with respect to any junior stock, or set
aside money or assets for such purpose and neither the Company nor any
subsidiary thereof may purchase or otherwise acquire any Class B Preferred
Stock, parity stock, or junior stock or set aside any money or assets for any
such purpose. The failure of the Company to pay any dividends on any class or
series of parity stock or to redeem or exchange on any date fixed for
redemption or exchange any shares of Class B Preferred Stock shall not prevent
the Company from (i) paying any dividends on junior stock solely in shares of
junior stock or the redemption, purchase, or other acquisition of junior stock
solely in exchange for (together with a cash adjustment for fractional shares,
if any), or (but only in the case of a failure to pay dividends on any parity
stock) through the application of the proceeds from the sale of, shares of
junior stock; or (ii) the payment of dividends on any parity stock solely in
shares of parity stock and/or junior stock or the redemption, exchange,
purchase, or other acquisition Class B Preferred Stock or parity stock solely
in exchange for (together with a cash adjustment for fractional shares, if
any), or (but only in the case of a failure to pay dividends on any parity
stock) through the application of the proceeds from the sale of, parity stock
and/or junior stock.
14
<PAGE>
The Class B Preferred Stock has no voting rights, except as required by the
DGCL, and except that the holders of Class B Preferred Stock have the right to
vote with the Class A and Class B Common Stock, on the basis of one vote per
share, in any general election of directors of the Company.
Series C Preferred Stock. The Company is authorized to issue 80,000 shares of
Convertible Preferred Stock, Series C ("Series C Preferred Stock"), of which
70,559 were issued and outstanding as of the date of this Prospectus. Each
share of Series C Preferred Stock is convertible, at the option of the holder,
into 100 shares of Class A Common Stock, subject to anti-dilution adjustments.
The dividend, liquidation, and redemption features of the Series C Preferred
Stock, each of which is discussed below, are determined by reference to the
liquidation value of the Series C Preferred Stock, which as of any date of
determination is equal, on a per share basis, to the sum of (i) $2,375, plus
(ii) all dividends accrued on such share through the dividend payment date on
or immediately preceding such date of determination to the extent not paid on
or before such date, plus (iii), for purposes of determining liquidation and
redemption payments, all unpaid dividends accrued on the sums of clauses
(i) and (ii) above, to such date of determination.
Subject to the prior preferences and other rights of any class or series of
preferred stock ranking senior to or on a parity with the Series C Preferred
Stock, the holders of Series C Preferred Stock are entitled to receive
preferential cumulative cash dividends out of funds legally available therefor.
Dividends accrue cumulatively at an annual rate of 5 1/2% of the liquidation
value per share, whether or not such dividends are declared or funds are
legally or contractually available for payment of dividends, except that if the
Company fails to redeem shares of Series C Preferred Stock required to be
redeemed on a redemption date, dividends will thereafter accrue cumulatively at
an annual rate of 15% of the liquidation value per share. Dividends not paid on
any dividend payment date will be added to the liquidation value on such date
and remain a part thereof until such dividends and all dividends accrued
thereon are paid in full. Dividends will accrue on unpaid dividends at the rate
of 5 1/2% (15% under the circumstances described above) per annum, unless such
dividends remain unpaid for two consecutive quarters in which event such rate
will increase to 15% per annum until such dividends and all dividends accrued
thereon are paid in full.
Upon the dissolution, liquidation, or winding up of the Company, holders of
the Series C Preferred Stock will be entitled to receive from the assets of the
Company available for distribution to stockholders an amount in cash, per
share, equal to the liquidation value of the Series C Preferred Stock.
The Series C Preferred Stock is subject to optional redemption at any time
after August 8, 2001, in whole or in part, by the Company at a redemption price
per share equal to the then liquidation value of the Series C Preferred Stock.
Subject to the prior preferences and other rights of any other class or series
of preferred stock ranking senior to or on a parity with the Series C Preferred
Stock and subject to any prohibition or restriction contained in any instrument
evidencing indebtedness of the Company, the Series C Preferred Stock is
required to be redeemed by the Company at any time on or after August 8, 2001
at the option of the holder, in whole or in part (provided that the aggregate
liquidation value of the shares to be redeemed is in excess of $1 million), in
each case at a redemption price per share equal to the then liquidation value.
The Series C Preferred Stock ranks senior to the Class A and Class B Common
Stock and Class B Preferred Stock and on a parity basis with the Class A
Preferred Stock and the Series E Preferred Stock as to dividend rights, rights
to redemption, and rights on liquidation.
For so long as any dividends are in arrears on the Series C Preferred Stock
and until all dividends accrued up to the immediately preceding dividend
payment date on the Series C Preferred Stock shall have been paid or declared
and set apart so as to be available for payment in full thereof and for no
other purpose, the Company may not redeem or otherwise acquire any shares of
Series C Preferred Stock or any shares of any class or series of its capital
stock ranking junior to the Series C Preferred Stock, unless all of the
outstanding shares of Series C Preferred Stock are redeemed. For so long as any
dividends are in arrears on the Series C Preferred Stock and until all
dividends accrued up to the immediately preceding dividend payment date on
the Series C Preferred Stock shall have been paid or declared and set apart so
as to be available for payment
15
<PAGE>
in full thereof and for no other purpose, the Company may not declare or pay
any dividend on or make any other distribution with respect to any junior stock
or set aside any money or assets for such purpose, except that the Company may
pay a dividend on any class or series of junior stock solely in shares of
capital stock ranking junior to the Series C Preferred Stock. If the Company
fails to redeem shares of Series C Preferred Stock required to be redeemed on a
redemption date, and until all then outstanding shares of Series C Preferred
Stock are redeemed in full, the Company may not redeem any junior stock, or
otherwise acquire any shares of such stock or Series C Preferred Stock, except
that the Company may acquire shares of Series C Preferred Stock pursuant to a
purchase or exchange offer made to holders of all outstanding shares of Series
C Preferred Stock, if as to holders of all outstanding shares of Series C
Preferred Stock, the terms of the purchase or exchange offer for all such
shares are identical.
The holders of Series C Preferred Stock are entitled to vote on an as
converted basis on all matters submitted to a vote of holders of Class A and
Class B Common Stock and any other class of capital stock of the Company
entitled to vote generally on the election of directors. Holders of Series C
Preferred Stock are not entitled to vote as a separate class except as
otherwise may be required by the DGCL.
Series E Preferred Stock. The Company is authorized to issue 400,000 shares
of Redeemable Convertible Preferred Stock, Series E ("Series E Preferred
Stock"), of which 246,402 were issued and outstanding as of the date of this
Prospectus and all of which were held by wholly owned subsidiaries of the
Company. At any time after the Company amends its Restated Certificate of
Incorporation to increase the number of authorized shares of Class A Common
Stock to a number that would permit the conversion of all of the shares of
Series E Preferred Stock then outstanding, the shares of Series E Preferred
Stock shall be convertible, at the option of the holder, into Class A Common
Stock at the rate of 1,000 shares of Class A Common Stock for each share of
Series E Preferred Stock, subject to anti-dilution adjustments. The dividend,
liquidation, and redemption features of the Series E Preferred Stock, each of
which is discussed below, are determined by reference to the liquidation
preference of the Series E Preferred Stock, which as of any date of
determination is equal, on a per share basis, to the sum of (i) $22,303, plus
(ii) all dividends accrued on such share through the dividend payment date on
or immediately preceding such date of determination to the extent not paid on
or before such date, plus (iii) for purposes of determining liquidation and
redemption payments, all unpaid dividends accrued on the sum of clauses (i) and
(ii) above, to such date of determination.
Subject to the prior preferences and other rights of any class or series of
preferred stock ranking prior to the Series E Preferred Stock, the holders of
Series E Preferred Stock are entitled to receive preferential cumulative cash
dividends out of funds legally available therefor. Dividends accrue
cumulatively at an annual rate of 5% of the stated liquidation value per share,
whether or not such dividends are declared or funds are legally available for
payment of dividends. Dividends not paid on any dividend payment date are added
to the liquidation value on such date and remain a part thereof until such
dividends are paid. No interest or additional dividends will accrue or be
payable with respect to any dividend payment on the Series E Preferred Stock
that may be in arrears or with respect to that portion of any other payment on
the Series E Preferred Stock that is in arrears which consists of accumulated
or accrued and unpaid dividends.
Upon the dissolution, liquidation or winding up of the Company, holders of
the Series E Preferred Stock will be entitled to receive from the assets of the
Company available for distribution to stockholders an amount in cash or
property or a combination thereof, per share, equal to the liquidation value of
the Series E Preferred Stock.
The Series E Preferred Stock is subject to optional redemption by the Company
at any time, in whole or in part, at a redemption price, per share, equal to the
then liquidation value of the Series E Preferred Stock. The Company may elect to
pay the redemption price (or designated portion thereof) of the shares of Series
E Preferred Stock called for redemption by issuing to the holder thereof, in
respect of his shares to be redeemed, a number of shares of Class A Common Stock
equal to the aggregate redemption price (or designated portion thereof) of such
shares divided by the average of the last daily sales prices of the Class A
Common Stock for a specified period, subject to adjustments described in the
Certificate of Designations establishing the Series E Preferred Stock.
16
<PAGE>
The Series E Preferred Stock ranks senior to the Class A and Class B Common
Stock and the Class B Preferred Stock and on a parity basis with the Class A
Preferred Stock and Series C Preferred Stock as to dividend rights, rights to
redemption, and rights on liquidation.
For so long as any dividends are in arrears on the Series E Preferred Stock
or any class or series of preferred stock of the Company ranking pari passu
with the Series E Preferred Stock which is entitled to payment of cumulative
dividends prior to the redemption or other acquisition of the Series E
Preferred Stock, and until all dividends accrued up to the immediately
preceding dividend payment date on the Series E Preferred Stock and any such
parity stock shall have been paid or declared and set apart so as to be
available for payment in full thereof and for no other purpose, neither the
Company nor any subsidiary thereof may redeem or otherwise acquire any shares
of Series E Preferred Stock, any parity stock, or any class or series of
capital stock of the Company ranking junior to the Series E Preferred Stock, or
set aside any money or assets for any such purpose, unless all of the
outstanding shares of Series E Preferred Stock and such parity stock are
redeemed. For so long as any dividends are in arrears on the Series E Preferred
Stock and until all dividends accrued up to the immediately preceding dividend
payment date on the Series E Preferred Stock shall have been paid or declared
and set apart so as to be available for payment in full thereof and for no
other purpose, the Company may not declare or pay any dividend on or make any
distribution with respect to any junior stock or parity stock or set aside any
money or assets for any such purpose, except for dividends declared and paid on
parity stock contemporaneously and on a pro rata basis with dividends declared
and paid on the Series E Preferred Stock. If the Company fails to redeem shares
of Series E Preferred Stock required to be redeemed on a redemption date, the
Company may not declare or pay any dividend on or make any distribution with
respect to any junior stock or set aside money or assets for any such purpose,
and neither the Company nor any subsidiary may redeem any parity stock or
junior stock, or purchase or otherwise acquire any Series E Preferred Stock,
parity stock, or junior stock, or set aside any money or assets for any such
purpose, until such shares of Series E Preferred Stock are redeemed. The
failure of the Company to pay any dividends on any class or series of parity
stock or to redeem on any date fixed for redemption any shares of Series E
Preferred Stock shall not prevent the Company from (i) paying any dividends on
junior stock solely in shares of junior stock or the redemption or other
acquisition of junior stock solely in exchange for (together with a cash
adjustment for fractional shares, if any), or (but only in the case of failure
to pay dividends on any parity stock) through the application of the proceeds
from the sale of shares of junior stock; or (ii) the payment of dividends on
any parity stock solely in shares of parity stock and/or junior stock or the
redemption or other acquisition of Series E Preferred Stock or parity stock
solely in exchange for (together with a cash adjustment for fractional shares,
if any), or (but only in the case of a failure to pay dividends on any parity
stock) through the application of the proceeds from the sale of shares of
parity stock and/or junior stock.
The Series E Preferred Stock has no voting rights, except as required by the
DGCL, and except that at such time as any shares of Series E Preferred Stock
are not held by the Company or its majority-owned subsidiaries, such shares
will vote with the Class A and Class B Common Stock, on the basis of one vote
per share, in any general election of directors of the Company.
Series D Preferred Stock. The Company has entered into a definitive merger
agreement with TeleCable Corporation ("TeleCable") whereby TeleCable will be
merged with and into a wholly owned subsidiary of the Company (the "TeleCable
Merger"). The terms of the TeleCable Merger contemplate the issuance to the
former stockholders of TeleCable of one million shares of a new series of
Series Preferred Stock to be designated as "Convertible Preferred Stock, Series
D" ("Series D Preferred Stock"), as partial consideration for the proposed
acquisition by the Company of TeleCable. If such series is issued, the
preferences and relative, participating, optional, or other special rights,
qualifications, limitations, or restrictions thereof are expected to be as
follows:
Each share of Series D Preferred Stock will be convertible, at the option of
the holder, into 10 shares of Class A Common Stock, subject to anti-dilution
adjustments. The dividend, liquidation, and redemption features of the
Series D Preferred Stock, each of which is discussed below, will be determined
by reference to
17
<PAGE>
the liquidation value of the Series D Preferred Stock, which as of any date of
determination will equal, on a per share basis, the sum of (i) $300, plus (ii)
all dividends accrued on such share through the dividend payment date on or
immediately preceding such date of determination to the extent not paid on or
before such date, plus (iii) for purposes of determining liquidation and
redemption payments, all unpaid dividends accrued on the sum of clauses (i) and
(ii) above, to such date of determination.
Subject to the prior preferences and other rights of any class or series of
preferred stock ranking senior to or on a parity with the Series D Preferred
Stock with respect to the payment or declaration of dividends, the holders of
Series D Preferred Stock will be entitled to receive preferential cumulative
cash dividends out of funds legally available therefor. Dividends will accrue
on a daily basis at an annual rate of 5 1/2% of the liquidation value per
share, whether or not such dividends are declared or funds are legally or
contractually available for payment of dividends, except that if the Company
fails to redeem shares of Series D Preferred Stock required to be redeemed on a
redemption date, dividends thereafter will accrue cumulatively at an annual
rate of 10% of the liquidation value per share until such shares are redeemed.
Dividends not paid on any dividend payment date will be added to the
liquidation value on such date and remain a part thereof until such dividends
and all dividends accrued thereon are paid in full. Dividends will accrue on
unpaid dividends at the rate of 5 1/2% (10% under the circumstances described
above) per annum, unless such dividends remain unpaid for two consecutive
quarters in which event such rate shall increase to 10% per annum until such
dividends and all dividends accrued thereon are paid in full. However, to the
extent any cash dividends are not paid on any dividend payment date, the amount
of such dividends will be converted, to the extent permissible under the DGCL,
into shares of Class A Common Stock at a conversion rate equal to 95% of the
then "current market price" of the Class A Common Stock, and upon issuance of
Class A Common Stock to holders of Series D Preferred Stock in respect of such
conversion such dividend will be deemed paid for all purposes.
Upon the dissolution, liquidation, or winding up of the Company, holders of
the Series D Preferred Stock will be entitled to receive from the assets of the
Company available for distribution to stockholders an amount in cash, per
share, equal to the liquidation value of the Series D Preferred Stock.
The Series D Preferred Stock will be subject to optional redemption by the
Company at any time after the fifth anniversary of its issuance, in whole or
from time to time in part, at a redemption price per share equal to the
liquidation value of the Series D Preferred Stock. Shares of Series D Preferred
Stock may also be subject to optional redemption by the Company after the third
anniversary of the issue date, in whole or from time to time in part, at a
redemption price per share equal to the liquidation value of the Series D
Preferred Stock if the "market value" per share of Class A Common Stock shall
have exceeded $37.50 for the period specified in the Certificate of
Designations establishing the Series D Preferred Stock. Subject to the prior
preferences and other rights of any other class or series of preferred stock
ranking senior to or on a parity basis with the Series D Preferred Stock and
subject to any prohibition or restriction contained in any instrument
evidencing indebtedness of the Company, any holder of Series D Preferred Stock,
at such holder's option, may require the Company, at any time after the tenth
anniversary of the issuance of such Series D Preferred Stock, to redeem all or
a portion of such holder's shares of Series D Preferred Stock, provided that
the aggregate liquidation value of the shares to be redeemed is in excess of
$50,000 (or, if all of the shares of Series D Preferred Stock held by such
holder has an aggregate liquidation value of less than $50,000, all but not
less than all of such shares of Series D Preferred Stock), in each case at a
redemption price per share equal to the then liquidation value of the Series D
Preferred Stock. If the Company fails to effect any redemption of Series D
Preferred Stock called for redemption or which a holder has validly requested
be redeemed, the holders thereof will have the option to convert their shares
of Series D Preferred Stock into Class A Common Stock at a conversion rate
equal to the quotient obtained by dividing the redemption price by 95% of the
"current market value" of the Class A Common Stock on the redemption date,
provided that in the case of a failure by the Company to redeem shares at the
request of a holder, the exercise of the foregoing conversion right will be
delayed for one year.
If the Company issues to all holders of Class A Common Stock rights or
options to subscribe for or purchase shares of the capital stock (other than
Class A or Class B Common Stock) of the Company or of a subsidiary of the
Company which (a) is common stock of the issuer thereof or (b) participates in
one or more
18
<PAGE>
business operations of the issuer thereof in such a manner that if such
operations were owned by a corporation and such capital stock were issued
thereby such capital stock would be common stock of such corporation, holders
of Series D Preferred Stock will have the option, in lieu of any anti-dilution
adjustment which might otherwise apply to the conversion rate of Series D
Preferred Stock, to exchange a portion of their shares of Series D Preferred
Stock for shares of a new series of preferred stock which would be convertible
into such capital stock issued upon exercise of such rights or options and
which would otherwise contain terms and conditions similar to the Series D
Preferred Stock.
The Series D Preferred Stock will rank senior to the Class A and Class B
Common Stock and the Class B Preferred Stock and on a parity basis with the
Class A Preferred Stock, Series C Preferred Stock, and Series E Preferred Stock
as to dividend rights, rights to redemption, and rights on liquidation.
For so long as any dividends are in arrears on the Series D Preferred Stock
and until all dividends accrued up to the immediately preceding dividend
payment date on the Series D Preferred Stock shall have been paid or declared
and set apart so as to be available for payment in full thereof and for no
other purpose, the Company may not redeem or otherwise acquire any shares of
Series D Preferred Stock or any shares of any class or series of its capital
stock ranking pari passu with or junior to the Series D Preferred Stock, unless
all of the outstanding shares of Series D Preferred Stock are redeemed. For so
long as any dividends are in arrears on the Series D Preferred Stock and until
all dividends accrued up to the immediately preceding dividend payment date on
the Series D Preferred Stock shall have been paid or declared and set apart so
as to be available for payment in full thereof and for no other purpose, the
Company may not declare or pay any dividend on or make any other distribution
with respect to any junior stock or set aside any money or assets for such
purpose, except that the Company may pay a dividend on any class or series of
junior stock solely in shares of capital stock ranking junior to the Series D
Preferred Stock. If the Company fails to redeem shares of Series D Preferred
Stock required to be redeemed on a redemption date, and until all then
outstanding shares of Series D Preferred Stock are redeemed in full, the
Company may not redeem any junior stock, or otherwise acquire any shares of
such stock or Series D Preferred Stock, except that the Company may acquire
shares of Series D Preferred Stock pursuant to a purchase or exchange offer
made to holders of all outstanding shares of Series D Preferred Stock, if as to
holders of all outstanding shares of Series D Preferred Stock the terms of the
purchase or exchange offer for all such shares are identical.
The Series D Preferred Stock will have no voting rights, except as required
by the DGCL and except that without the consent of the holders of 66 2/3% in
liquidation value of the Series D Preferred Stock, the Company may not create
any series of Preferred Stock that is senior as to dividend rights, rights to
redemption, or rights on liquidation to the Series D Preferred Stock.
DESCRIPTION OF DEPOSITARY SHARES
If so indicated in the applicable Prospectus Supplement, shares of a
particular series of Preferred Stock will be represented by Depositary Receipts
(as defined below) evidencing Depositary Shares each equivalent to a specified
fractional interest in a share of such series of Preferred Stock. The
description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject
to and qualified in its entirety by reference to the Deposit Agreement and
Depositary Receipts relating to such series of Preferred Stock, forms of which
are filed as exhibits to the Registration Statement of which this Prospectus is
a part.
GENERAL
The Company may, at its option, elect to offer interests in fractions of
shares of Preferred Stock in lieu of shares of the Preferred Stock. In such
event, the Company will provide for the issuance by a Depositary of
19
<PAGE>
receipts ("Depositary Receipts") for Depositary Shares, each of which will
represent an interest in a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of the Preferred Stock) of a share
of a particular series of the Preferred Stock as described below.
The shares of any series of Preferred Stock underlying the Depositary Shares
will be deposited under a separate Deposit Agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). The Prospectus Supplement
relating to a series of Depositary Shares will set forth the name and address
of the Depositary. Subject to the terms of the Deposit Agreement, each owner of
a Depositary Share will be entitled, in proportion to the applicable fraction
of a share of Preferred Stock underlying such Depositary Share, to all the
rights and preferences of the Preferred Stock underlying such Depositary Share
(including dividend, voting, redemption, conversion, and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive Depositary Receipts, the Depositary
may, upon the written order of the Company, issue temporary Depositary Receipts
substantially identical to (and entitling the holders thereof to all the rights
pertaining to) the definitive Depositary Receipts but not in definitive form.
Definitive Depositary Receipts will be prepared thereafter without unreasonable
delay, and temporary Depositary Receipts will be exchangeable for definitive
Depositary Receipts at the Company's expense.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
in respect of shares of Preferred Stock to the record holders of Depositary
Shares in proportion, insofar as practicable, to the number of Depositary
Shares owned by such holders.
In the event of a distribution other than cash in respect of shares of
Preferred Stock, the Depositary will distribute property received by it to the
record holders of Depositary Shares in proportion, insofar as practicable, to
the number of Depositary Shares owned by such holders, unless the Depositary
determines that it is not feasible to make such distribution, in which case the
Depositary may, with the approval of the Company, adopt such method as it deems
equitable and practicable for the purpose of effecting such distribution,
including sale (at public or private sale) of such property and distribution of
the net proceeds from such sale to such holders.
The amount distributed in any of the foregoing cases will be reduced by any
amount required to be withheld by the Company or the Depositary on account of
taxes.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Preferred Stock.
Whenever the Company redeems shares of Preferred Stock held by the Depositary,
the Depositary will redeem as of the same redemption date the number of
Depositary Shares relating to shares of Preferred Stock so redeemed. If less
than all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata as may be determined by the
Depositary to be equitable.
20
<PAGE>
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences, or privileges shall be offered with respect to the shares of a
series of Preferred Stock underlying the Depositary Shares, or (ii) the
Depositary shall receive notice of any meeting at which holders of shares of
such Preferred Stock are entitled to vote or of which holders of shares of such
Preferred Stock are entitled to notice, or of any election on the part of the
Company to call for redemption any shares of such Preferred Stock, the
Depositary shall in each such instance fix a record date (which shall be the
same date as the record date for the shares of such Preferred Stock) for the
determination of the holders of Depositary Shares (x) who shall be entitled to
receive such dividend, distribution, rights, preferences, or privileges, (y)
who shall be entitled to give instructions for the exercise of voting rights at
any such meeting or to receive notice of such meeting, or (z) who shall be
subject to such redemption, subject to the provisions of the Deposit Agreement.
VOTING
Upon receipt of notice of any meeting at which holders of shares of a series
of Preferred Stock underlying the Depositary Shares are entitled to vote, the
Depositary will mail the information contained in such notice of meeting to the
record holders of Depositary Shares relating to such Preferred Stock. Each
record holder of Depositary Shares on the record date (which will be the same
date as the record date for the underlying Preferred Stock) will be entitled to
instruct the Depositary as to the exercise of the voting rights pertaining to
the number of shares of Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the
number of shares of Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company has agreed to take all
reasonable action which may be deemed necessary by the Depositary in order to
enable the Depositary to do so.
The Depositary will abstain from voting shares of Preferred Stock to the
extent it does not receive specific written voting instructions from the
holders of Depositary Shares representing such Preferred Stock.
WITHDRAWAL OF UNDERLYING PREFERRED STOCK
Unless otherwise indicated in the applicable Prospectus Supplement, upon
surrender of Depositary Receipts at the Corporate Office (as defined in the
Deposit Agreement) of the Depositary, the owner of the Depositary Shares
evidenced thereby will be entitled to delivery at such office of certificates
evidencing the number of shares of Preferred Stock (but only in whole shares of
Preferred Stock) represented by such Depositary Receipts. If the Depositary
Receipts delivered by a holder evidence a number of Depositary Shares in excess
of the number of Depositary Shares representing the number of whole shares of
Preferred Stock to be withdrawn, the Depositary will at the same time deliver
to such holder a new Depositary Receipt or Receipts evidencing such excess
number of Depositary Shares.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of Depositary Receipts and any provision of the Deposit Agreement
may at any time be amended by agreement between the Company and the Depositary.
However, any amendment that imposes any fees, taxes, or other charges payable
by holders of Depositary Shares (other than taxes and other governmental
charges, fees, and other expenses payable by such holders as stated under
"Charges of
21
<PAGE>
Depositary"), or that otherwise prejudices any substantial existing right of
holders of Depositary Shares, will not take effect as to outstanding Depositary
Shares until the expiration of 90 days after notice of such amendment has been
mailed to the record holders of outstanding Depositary Shares. Every holder of
Depositary Shares at the time any such amendment becomes effective shall be
deemed to consent and agree to such amendment and to be bound by the Deposit
Agreement, as so amended.
Whenever so directed by the Company, the Depositary will terminate the
Deposit Agreement after mailing notice of such termination to the record
holders of all Depositary Shares then outstanding at least 30 days prior to the
date fixed in such notice for such termination. The Depositary may likewise
terminate the Depositary Agreement if at any time 45 days shall have expired
after the Depositary shall have delivered to the Company a written notice of
its election to resign and a successor depositary shall not have been appointed
and accepted its appointment. If any Depositary Shares remain outstanding after
the date of termination, the Depositary thereafter will discontinue the
transfer of Depositary Shares, will suspend the distribution of dividends to
the holders thereof, and will not give any further notices (other than notice
of such termination) or perform any further acts under the Deposit Agreement
except as provided below and except that the Depositary will continue to
collect dividends on the Preferred Stock underlying such Depositary Shares and
any other distributions with respect thereto. At any time after the expiration
of two years from the date of termination, the Depositary may sell the
Preferred Stock then held by it at public or private sale, at such place or
places and upon such terms as it deems proper and may thereafter hold the net
proceeds of any such sale, together with any money and other property then held
by it, without liability for interest thereon, for the pro rata benefit of the
holders of Depositary Shares. The Company does not presently intend to
terminate any Deposit Agreement or to permit the resignation of any Depositary
without appointing a successor depositary.
CHARGES OF DEPOSITARY
The Company will pay all charges of the Depositary, including charges in
connection with the initial deposit of shares of any series of Preferred Stock,
the initial execution and delivery of the Depositary Receipts, the distribution
of information to the holders of Depositary Receipts with respect to matters on
which such Preferred Stock is entitled to vote, withdrawals of shares of such
Preferred Stock, or redemption or conversion of shares of such Preferred Stock,
except for taxes (including transfer taxes, if any) and other governmental
charges and such other charges as are provided in the Deposit Agreement to be
at the expense of holders of Depositary Receipts.
MISCELLANEOUS
The Depositary will make available for inspection by holders of Depositary
Receipts at its Corporate Office any reports and communications from the
Company that are delivered to the Depositary and made generally available to
the holders of shares of the series of Preferred Stock underlying the
Depositary Shares.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control from or in performing its
obligations under the Deposit Agreement.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of a particular class of
Common Stock or a particular series of Preferred Stock. If so indicated in the
applicable Prospectus Supplement, shares of a particular series of Preferred
Stock that may be purchased upon exercise of Warrants will be represented by
Depositary Receipts evidencing Depositary Shares, each equivalent to a
specified fractional interest in a share of such series of Preferred Stock. See
"Description of Depositary Shares." Warrants may be issued independently or
together with a particular class of Common Stock or a particular series of
Preferred Stock offered by any Prospectus Supplement and may be attached to or
separate form such Common Stock or Preferred Stock. Each series of Warrants
will be issued under a separate warrant agreement (a "Warrant Agreement") to be
22
<PAGE>
entered into between the Company and a warrant agent to be designated by the
Company (the "Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of offered Warrants. The Warrant Agent will
act solely as an agent of the Company in connection with the Warrants and will
not assume any obligation or relationship of agency or trust for or with any
holders of Warrants or beneficial owners of Warrants. Holders of Warrants
(without the consent of the Warrant Agent, the holders of any Common Stock or
Preferred Stock issued upon exercise of Warrants for the purchase of such
Common Stock or Preferred Stock, respectively, or the holder of any other
Warrants) may, on their own behalf and for their own benefit, enforce, and may
institute and maintain any suit, action, or proceeding against the Company
suitable to enforce or otherwise in respect of, their rights to exercise
Warrants evidenced by Warrant Certificates. Copies of the forms of Warrant
Agreements, including the forms of Warrant Certificates representing the
Warrants, are filed as exhibits to the Registration Statement of which this
Prospectus is a part. The following summary of certain provisions of the
Warrants does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Warrant Agreements.
Reference is made to the Prospectus Supplement relating to any particular
issue of Warrants for the terms of such Warrants, including, where applicable:
(i) the initial public offering price of such Warrants; (ii) the title and
terms of any class of Common Stock with which such Warrants are issued, the
number of such Warrants issued with each share of such Common Stock offered,
and the date, if any, on or after such Warrants and the related Common Stock
will be separately transferable; (iii) the title, number, and terms of any
class of Common Stock purchasable upon exercise of Warrants to purchase Common
Stock and the price at which such number of shares of Common Stock of such
class may be purchased upon such exercise; (iv) the title and terms of any
series of Preferred Stock with which such Warrants are issued, the number of
such Warrants issued with each share of Preferred Stock offered, and the date,
if any, on or after such Warrants and the related Preferred Stock will be
separately transferable; (v) the designation, number, stated value, and terms
(including, without limitation, liquidation, dividend, conversion, and voting
rights) of the series of Preferred Stock purchasable upon exercise of Warrants
to purchase Preferred Stock, the price at which such number of shares of
Preferred Stock of such series may be purchased upon such exercise, and whether
the Company has elected to deliver Depositary Shares for such Preferred Stock
upon exercise of such Warrants; (vi) the date on which the right to exercise
such Warrants shall commence and the date (the "Expiration Date") on which such
right shall expire; (vi) U.S. federal income tax consequences applicable to
such Warrants; and (vii) any other terms of such Warrants. Warrants will be
issued in registered form only. The exercise price for Warrants may be subject
to adjustment in accordance with the applicable Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, each Warrant
will entitle the holder thereof to purchase such number of shares of Common
Stock or Preferred Stock, as the case may be, at such exercise price as shall
in each case be set forth in, or calculable from, the Prospectus Supplement
relating to the offered Warrants, which exercise price may be subject to
adjustment upon the occurrence of certain events as set forth in such
Prospectus Supplement. After the close of business on the Expiration Date (or
such later date to which such Expiration Date may be extended by the Company),
unexercised Warrants will become void. The place or places where, and the
manner in which, Warrants may be exercised will be specified in the Prospectus
Supplement relating to such Warrants.
Prior to the exercise of any Warrants to purchase a particular class of
Common Stock or a particular series of Preferred Stock, holders of such
Warrants will not have any rights of holders of such Common Stock or Preferred
Stock purchasable upon such exercise, including the right to receive payments
of dividends, if any, on such Common Stock or Preferred Stock purchasable upon
such exercise or to exercise any applicable right to vote.
Unless otherwise provided in the related Prospectus Supplement, each Warrant
Agreement may be amended by the Company and the Warrant Agent (i) without the
consent of the holders of Warrants for the purpose of curing any ambiguity,
curing, correcting, or supplementing any defective provision contained therein
or making such provisions with respect to matters or questions arising
thereunder as the Company
23
<PAGE>
and the Warrant Agent may deem necessary or desirable, provided that such
action will not have a material adverse effect on the interests of the holders
of Warrants, and (ii) with the consent of the holders of not less than a
majority of the Warrants then outstanding and unexercised for any other reason.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities on a negotiated or competitive
bid basis to or through underwriters or dealers, and also may sell the Offered
Securities directly to other purchasers or through agents.
The distribution of the Offered Securities may be effected from time to time
in one of more transactions at a fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
If an underwriter or underwriters are utilized in the sale, the Company will
execute an underwriting agreement with such underwriters and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of the Offered Securities. Unless otherwise indicated in the Prospectus
Supplement, the obligations of any underwriters to purchase the Offered
Securities will be subject to certain conditions precedent and the underwriters
will be obligated to purchase all of the Offered Securities if any are
purchased. Such underwriters may include Bear, Stearns & Co. Inc., Citicorp
Securities Markets, Inc., Donaldson, Lufkin & Jenrette Securities Corporation,
CS First Boston Corporation, Furman & Selz, Goldman, Sachs & Co., Lehman
Brothers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, Oppenheimer & Co., Inc., PaineWebber Incorporated, or Salomon
Brothers Inc, or may be a group of underwriters represented by firms including
one or more of such firms.
If a dealer is utilized in the sale, the Company will sell the Offered
Securities to the dealer as principal. The dealer may then resell the Offered
Securities to the public at varying prices to be determined by such dealer at
the time of resale.
Offers to purchase Offered Securities may be solicited by the Company or
agents designated by the Company from time to time. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
In connection with the sale of the Offered Securities, underwriters, dealers,
and agents may receive compensation in the form of discounts, concessions, or
commissions from the Company or from purchasers of the Offered Securities for
whom they may act as agents. Underwriters, dealers, and agents that participate
in the distribution of the Offered Securities may be deemed to be underwriters
as that term is defined in the Securities Act, and any discounts or commissions
received by them from the Company and any profits on the resale of the Offered
Securities by them may be deemed to be underwriting discounts and commissions
under the Securities Act. Any such person who may be deemed to be an
underwriter will be identified and any such compensation received from the
Company will be described in the Prospectus Supplement.
If so indicated in the Prospectus Supplement, the Company will authorize
agents and underwriters to solicit offers by certain specified institutions to
purchase Offered Securities from the Company at the public offering price set
forth in the Prospectus Supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future.
Institutions with whom such contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions but
shall in all cases be subject to the approval of the Company. Such contracts
will be subject only to those conditions set forth in the Prospectus Supplement
and the Prospectus Supplement will set forth the commission payable for
solicitation of such contracts.
24
<PAGE>
Agents, underwriters and dealers may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the agents, underwriters, or dealers may be
required to make in respect thereof. Agents, underwriters, and dealers may be
customers of, engage in transactions with, or perform services for the Company
in the ordinary course of business.
The anticipated place and time of delivery for the Offered Securities will be
set forth in the Prospectus Supplement.
LEGAL MATTERS
Certain legal matters with respect to the Offered Securities offered hereby
will be passed upon for the Company by Baker & Botts, L.L.P., New York, New
York. Mr. Jerome H. Kern, a partner of Baker & Botts, L.L.P., is a director of
the Company. Mr. Kern holds options to purchase shares of Class A Common Stock.
EXPERTS
The consolidated balance sheets of TCI Communications, Inc. (formerly Tele-
Communications, Inc.) and subsidiaries as of December 31, 1993 and 1992, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1993, and the related financial statement schedules, which appear in the Annual
Report on Form 10-K, as amended, of TCI Communications, Inc. for the year ended
December 31, 1993, have been incorporated by reference herein in reliance upon
the reports, dated March 21, 1994, of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The reports of
KPMG Peat Marwick LLP refer to a change in the method of accounting for income
taxes in 1993.
The consolidated balance sheets of Liberty Media Corporation and subsidiaries
(Successor) as of December 31, 1993 and 1992, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 1993 and 1992 and the period from April 1, 1991 to December
31, 1991 (Successor Periods) and the consolidated statements of operations,
stockholders' equity, and cash flows of Liberty Media (a combination of certain
programming interests and cable television assets of TCI Communications, Inc.
(formerly Tele-Communications, Inc.)) (Predecessor) for the period from January
1, 1991 to March 31, 1991 (Predecessor Period), included in the Form 8-K of TCI
Communications, Inc. dated April 6, 1994, have been incorporated by reference
herein in reliance upon the report, dated March 18, 1994, of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP refers to a change in the method
of accounting for income taxes in 1993.
The financial statements of TeleCable Corporation as of December 31, 1993 and
1992 and for each of the two years in the period ended December 31, 1993,
incorporated herein by reference to the Current Report on Form 8-K of the
Company dated August 26, 1994, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in accounting and auditing.
25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR THE PROSPECTUS SUP-
PLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT
DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SE-
CURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OF-
FERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Documents By Reference................................... 2
Certain Considerations.................................................... 3
The Company............................................................... 4
Use of Proceeds........................................................... 6
Ratios of Earnings to Combined Fixed Charges and Preferred Stock Divi-
dends.................................................................... 7
Description of Common Stock............................................... 7
Description of Preferred Stock............................................ 9
Description of Depositary Shares.......................................... 19
Description of Warrants................................................... 22
Plan of Distribution...................................................... 24
Legal Matters............................................................. 25
Experts................................................................... 25
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOGO TELE-COMMUNICATIONS, INC.
COMMON STOCK
PREFERRED STOCK
WARRANTS
---------------
PROSPECTUS
---------------
JANUARY , 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses to be borne by the Company in connection with the issuance and
distribution of the Depositary Shares are set forth below.
<TABLE>
<S> <C>
Registration Fee................................................ $198,276
Blue Sky Fees and Expenses (including counsel fees)*............ $ 15,000
Legal Fees and Expenses*........................................ $100,000
Accounting Fees and Expenses*................................... $ 25,000
Printing Fees and Expenses*..................................... $130,000
Depositary Fees*................................................ $ 5,000
Miscellaneous*.................................................. $ 26,724
--------
Total....................................................... $500,000
========
</TABLE>
- --------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides, generally, that
a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any action, suit or proceeding
(except actions by or in the right of the corporation) by reason of the fact
that such person is or was a director or officer of the corporation against all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A corporation may similarly indemnify such person for expenses
actually and reasonably incurred by him in connection with the defense or
settlement of any action or suit by or in the right of the corporation,
provided such person acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, in the
case of claims, issues and matters as to which such person shall have been
adjudged liable to the corporation, provided that a court shall have
determined, upon application, that, despite the adjudication of liability but
in view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
under section 174 of Title 8, or (iv) for any transaction from which the
director derived an improper personal benefit. No such provision may eliminate
or limit the liability of a director for any act or omission occurring prior to
the date when such provision becomes effective.
Article V, Section E of the Company's Restated Certificate of Incorporation
provides as follows:
1. Limitation on Liability.
To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or may hereafter be amended, a director of the
Corporation shall not be liable to the Corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a
director. Any
II-1
<PAGE>
repeal or modification of this paragraph 1 shall be prospective only
and shall not adversely affect any limitation, right or protection of a
director of the Corporation existing at the time of such repeal or
modification.
2. Indemnification.
(a) Right to Indemnification. The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is
made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "proceeding") by reason of the fact that he, or a
person for whom he is the legal representative, is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or
nonprofit entity, including service with respect to employee benefit
plans, against all liability and loss suffered and expenses (including
attorneys' fees) reasonably incurred by such person. Such right of
indemnification shall inure whether or not the claim asserted is based
on matters which antedate the adoption of this Section E. The
Corporation shall be required to indemnify a person in connection with
a proceeding (or part thereof) initiated by such person only if the
proceeding (or part thereof) was authorized by the Board of Directors
of the Corporation.
(b) Prepayment of Expenses. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in
advance of its final disposition, provided, however, that the payment
of expenses incurred by a director or officer in advance of the final
disposition of the proceeding shall be made only upon receipt of an
undertaking by the director or officer to repay all amounts advanced if
it should be ultimately determined that the director or officer is not
entitled to be indemnified under this paragraph or otherwise.
(c) Claims. If a claim for indemnification or payment of expenses
under this paragraph is not paid in full within 60 days after a written
claim therefor has been received by the Corporation, the claimant may
file suit to recover the unpaid amount of such claim and, if successful
in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have
the burden of proving that the claimant was not entitled to the
requested indemnification or payment of expenses under applicable law.
(d) Non-Exclusivity of Rights. The rights conferred on any person by
this paragraph shall not be exclusive of any other rights which such
person may [have] or hereafter acquire under any statute, provision of
this Certificate, the Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
(e) Other Indemnification. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity shall
be reduced by any amount such person may collect as indemnification
from such other corporation, partnership, joint venture, trust,
enterprise or nonprofit entity.
Article II, Section 2.9 of the Company's Bylaws also contains an indemnity
provision, requiring the Company to indemnify members of the Board of Directors
and officers of the Company and their respective heirs, personal
representatives and successors in interest for or on account of any action
performed on behalf of the Corporation, to the fullest extent provided by the
Delaware corporation laws and the Company's Restated Certificate of
Incorporation.
The Company has also entered into indemnification agreements with each of its
directors (each director, an "indemnitee"). The indemnification agreements
provide (i) for the prompt indemnification to the fullest extent permitted by
law against any and all expenses, including attorneys' fees and all other
costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness or participating in (including on
appeal), or in preparing for ("Expenses"), any threatened, pending or completed
action, suit
II-2
<PAGE>
or proceeding, or any inquiry or investigation ("Claim"), related to the fact
that such indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company or is or was serving at the Company's request as a
director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other
enterprise, or by reason of anything done or not done by a director or officer
in any such capacity, and against any and all judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection therewith) of any Claim, unless the
Reviewing Party (one or more members of the Board of Directors or other person
appointed by the Board of Directors, who is not a party to the particular
claim, or independent legal counsel) determines that such indemnification is
not permitted under applicable law and (ii) for the prompt advancement of
Expenses, and for reimbursement to the Company if the Reviewing Party
determines that such indemnitee is not entitled to such indemnification under
applicable law. In addition, the indemnification agreements provide (i) a
mechanism through which an indemnitee may seek court relief in the event the
Reviewing Party determines that the indemnitee would not be permitted to be
indemnified under applicable law (and therefore is not entitled to
indemnification or expense advancement under the indemnification agreement) and
(ii) indemnification against all expenses (including attorneys' fees), and
advancement thereof if requested, incurred by the indemnitee in seeking to
collect an indemnity claim or advancement of expenses from the Company or
incurred in seeking to recover under a directors' and officers' liability
insurance policy, regardless of whether successful or not. Furthermore, the
indemnification agreements provide that after there has been a "change in
control" in the Company (as defined in the indemnification agreements), other
than a change in control approved by a majority of directors who were directors
prior to such change, then, with respect to all determinations regarding a
right to indemnity and the right to advancement of Expenses, the Company will
seek legal advice only from independent legal counsel selected by the
indemnitee and approved by the Company.
The indemnification agreements impose upon the Company the burden of proving
that an indemnitee is not entitled to indemnification in any particular case
and negate certain presumptions that may otherwise be drawn against an
indemnitee seeking indemnification in connection with the termination of
actions in certain circumstances. Indemnitees' rights under the indemnification
agreements are not exclusive of any other rights they may have under Delaware
law, the Company's Bylaws or otherwise. Although not requiring the maintenance
of directors' and officers' liability insurance, the indemnification agreements
require that indemnitees be provided with the maximum coverage available for
any Company director or officer if there is such a policy.
The Company may purchase liability insurance policies covering its directors
and officers.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<C> <S>
1.1 Form of Underwriting Agreement.
3.1 Registrant's Restated Certificate of Incorporation, as
amended.*
4.1 Form of Certificate of Designations for Preferred Stock.**
4.2 Form of Deposit Agreement including form of Depositary Re-
ceipt.
4.3 Form of Preferred Stock Warrant Agreement.
4.4 Form of Class A Common Stock Warrant Agreement.
5 Opinion of Baker & Botts, L.L.P., Counsel to Registrant.
8 Tax Opinion of Baker & Botts, L.L.P.**
12.1 Calculation of Ratios of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
23.1 Consent of KPMG Peat Marwick LLP.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Price Waterhouse LLP.
23.4 Consent of Baker & Botts, L.L.P. (included in Exhibit 5).
24 Powers of Attorney.*
</TABLE>
- --------
* Previously filed.
** To be filed as an exhibit to Form 8-K in reference to the specific offering
of Preferred Stock, if any, to which it applies.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(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 of 1933, each filing of the Registrant's annual report pursuant to
section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) If any of the Offered Securities are offered at competitive bidding,
(a) to use its best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number of
copies of a prospectus which at that time meets the requirements of section
10(a) of the Act, and relating to the securities offered at competitive
bidding, as contained in the registration statement, together with any
supplements thereto and (b) to file an amendment to the registration
statement reflecting the results of bidding, the terms of the reoffering
and related matters to the extent required by the applicable form, not
later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer
and no reoffering of such securities by the purchasers is proposed to be
made.
II-4
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON JANUARY 11,
1995.
Tele-Communications, Inc.
/s/ Stephen M. Brett
By: _________________________________
Name: Stephen M. Brett
Title:Executive Vice President
II-6
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C>
* Chairman of the Board and
____________________________________ Director
(Bob Magness)
* President and Director
____________________________________ (Principal Executive
(John C. Malone) Officer)
* Executive Vice President and
____________________________________ Director (Principal
(Donne F. Fisher) Financial and Accounting
Officer)
* Director
____________________________________
(John W. Gallivan)
* Director
____________________________________
(Kim Magness)
____________________________________ Director
(Robert A. Naify)
* Director
____________________________________
(Jerome H. Kern)
____________________________________ Director
(Tony Coelho)
____________________________________ Director
(R. E. Turner)
</TABLE>
/s/ Stephen M. Brett
*By: ___________________________ January 11, 1995
Name: Stephen M. Brett
Title:Attorney-in-Fact
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBITS PAGE NO.
-------- ----------
<C> <S> <C>
1.1 Form of Underwriting Agreement.
3.1 Registrant's Restated Certificate of Incorporation, as
amended.*
4.1 Form of Certificate of Designations for Preferred
Stock.**
4.2 Form of Deposit Agreement including form of Depositary
Receipt.
4.3 Form of Preferred Stock Warrant Agreement.
4.4 Form of Class A Common Stock Warrant Agreement.
5 Opinion of Baker & Botts, L.L.P., Counsel to Registrant.
8 Tax Opinion of Baker & Botts, L.L.P.**
12.1 Calculation of Ratios of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Price Waterhouse LLP.
23.4 Consent of Baker & Botts, L.L.P. (included in Exhibit
5).
24 Powers of Attorney.*
</TABLE>
- --------
* Previously filed.
** To be filed as an exhibit to Form 8-K in reference to the specific offering
of Preferred Stock, if any, to which it relates.
<PAGE>
EXHIBIT 1.1
TELE-COMMUNICATIONS, INC.
EQUITY SECURITIES
FORM OF UNDERWRITING AGREEMENT
________________ ___, 19__
To the Representatives of the
several Underwriters named in
the respective Pricing Agreement
hereinafter described
Dear Sirs:
From time to time Tele-Communications, Inc., a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each, a
"Pricing Agreement") in the form of Annex I, with such additions and deletions
as the parties may determine, and, subject to the terms and conditions stated
herein and therein, to issue and sell to the firms named in Exhibit A to the
applicable Pricing Agreement (such firms constituting the "Underwriters" with
respect to such Pricing Agreement and the securities specified therein) certain
shares of its common stock, which may be Class A Common Stock, $1.00 par value
per share, Class B Common Stock, $1.00 par value per share, and/or any class of
common stock that may hereafter be created through an amendment to the Company's
Restated Certificate of Incorporation (collectively, the "Common Stock"), shares
of its Series Preferred Stock, par value $.01 per share (the "Preferred Stock"),
and, if applicable, certain depositary shares representing shares of Preferred
Stock (the "Depositary Shares"), warrants to purchase Common Stock (the "Common
Stock Warrants"), and/or warrants to purchase Preferred Stock and, if
applicable, Depositary Shares representing such Preferred Stock (the "Preferred
Stock Warrants"). (The Common Stock, the Preferred Stock, the Depositary
Shares, the Common Stock Warrants and the Preferred Stock Warrants specified in
Exhibit B to the applicable Pricing Agreement are collectively called the
"Offered Securities.") Each of the Offered Securities shall have the terms set
forth in Exhibit B to the applicable Pricing Agreement. The term "Underwriters"
as used herein will mean and refer collectively to you and to the other several
Underwriters named in Exhibit A to the applicable Pricing Agreement (and any
substitute Underwriter pursuant to Section 9 hereof), the term "Underwriter"
will refer to any of the several Underwriters named in Exhibit A to the
applicable Pricing Agreement (and any substitute underwriter pursuant to Section
9 hereof), and the term "Representatives" will refer to the Representatives
named in the applicable Pricing Agreement as the Representatives of the several
Underwriters. Any reference
<PAGE>
to you in this Agreement or in the applicable Pricing Agreement shall be solely
in your capacity as Representatives. The Company confirms as follows its
agreement with you and the Underwriters.
1. Registration Statement and Prospectus: The Company has filed with the
Securities and Exchange Commission (the "Commission"), in accordance with the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder (collectively called the "Act"), a shelf
registration statement on From S-3 (File No. 33-60982), including a prospectus,
relating to certain equity securities of the Company, which has become effective
under the Act, and will promptly file with the Commission a prospectus
supplement specifically relating to the Offered Securities pursuant to Rule 424
under the Act. As used in this Agreement, the term "Registration Statement"
means such registration statement, including exhibits and financial statements
and schedules and documents incorporated by reference therein, as amended or
supplemented to the date hereof and, in the case of reference to the
Registration Statement as of a date subsequent to the date hereof, as amended or
supplemented as of such date. The term "Basic Prospectus" means the prospectus
dated __________, 199_ as filed with the Commission pursuant to Rule 424 under
the Act. The term "Prospectus" means the Basic Prospectus together with the
prospectus supplement specifically relating to the Offered Securities as filed
with the Commission pursuant to Rule 424 under the Act. The term "preliminary
prospectus" means any preliminary prospectus supplement specifically relating to
the Offered Securities together with the Basic Prospectus. Any reference herein
to any preliminary prospectus or the Prospectus, as the case may be, except the
reference in Section 4(c), shall be deemed to refer to and include any documents
filed after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and so incorporated by reference.
2. Agreements to Sell and Purchase: The Company agrees to sell to the
Underwriters, and upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to the terms and
conditions of this Agreement and the applicable Pricing Agreement the
Underwriters agree to purchase from the Company, severally and not jointly, the
number of Offered Securities set forth opposite each Underwriter's respective
name in Exhibit A to such Pricing Agreement, at a purchase price specified
therein.
If any Offered Securities consist of shares of Preferred Stock and the
Prospectus so provides, such shares of Preferred Stock will be deposited by the
Company against delivery of receipts ("Depositary Receipts") to be issued by a
depositary to be named by the Company (the "Depositary") under a deposit
agreement (a "Deposit Agreement") between the Company, the Depositary and the
holders from time to time of the Depositary Receipts issued thereunder and
evidencing Depositary Shares. Each Depositary Share will represent the number
of deposited shares of Preferred Stock specified in the applicable prospectus
supplement and in Exhibit B to the applicable Pricing Agreement.
If any Offered Securities consist of Common Stock Warrants or Preferred
Stock Warrants, such Warrants will be issued under a warrant agreement (a
"Warrant Agreement") to be to be entered into by the Company with a warrant
agent (the "Warrant Agent") to be
-2-
<PAGE>
designated by the Company. Each Common Stock Warrant and Preferred Stock
Warrant will represent the right to purchase the number of shares of Common
Stock or Preferred Stock, respectively, at the exercise price and during the
period specified in the applicable prospectus supplement and in Exhibit B to the
applicable Pricing Agreement.
The terms and rights of any particular issuance and sale of Offered
Securities shall be as specified in the applicable Pricing Agreement and, if the
Offered Securities include (i) Preferred Stock, in or pursuant to a resolution
or resolutions of the Board of Directors of the Company or a duly authorized
committee thereof and set forth in a certificate of designations (the
"Certificate of Designations") to be filed with the Secretary of State of the
State of Delaware pursuant to Section 151 of the General Corporation Law of the
State of Delaware (the "General Corporation Law") and/or (ii) Common Stock
Warrants or Preferred Stock Warrants, in the Warrant Agreement entered into with
the Warrant Agent.
Common Stock, Preferred Stock, Depositary Shares, Common Stock Warrants and
Preferred Stock Warrants may be offered and sold separately or as units, as
specified in the applicable prospectus supplement and in Exhibit B to the
Pricing Agreement.
The particular sales of certain Offered Securities may be made from time to
time to the Underwriters specified in the applicable Pricing Agreement, for whom
you may act as Representatives. (The term "Representatives" also refers to a
single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.)
The obligation of the Company to issue and sell, and the obligation of you or
any of the Underwriters to purchase, shall be evidenced by the applicable
Pricing Agreement with respect to the Offered Securities specified therein, and,
prior to the execution of such Pricing Agreement, this Agreement shall not be
construed as an obligation of the Company to sell any Offered Securities nor as
an obligation of the Underwriters to purchase any Offered Securities. A Pricing
Agreement in the form of Annex I shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and the applicable Pricing Agreement shall be
several and not joint.
Each Pricing Agreement shall specify the aggregate number of Offered
Securities that the Company proposes to issue and sell (the "Firm Securities")
and, with respect to any grant by the Company to the Underwriters of the option
described in Section 3 hereof, the maximum number of Offered Securities that the
Company proposes to issue and sell to cover over-allotments (the "Optional
Securities"), the initial public offering price of such Firm Securities and
Optional Securities or the manner of determining such price, the purchase price
to the Underwriters of such Firm Securities and Optional Securities, the names
of the Underwriters, the names of the Representatives of such Underwriters, the
number of such Firm Securities and Optional Securities, if any, to be purchased
by each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto. The Pricing Agreement shall also specify (to
-3-
<PAGE>
the extent not set forth in the Registration Statement and Prospectus with
respect thereto) the terms of such Firm Securities and Optional Securities.
Upon the execution of the Pricing Agreement applicable to any Offered
Securities and authorization by the Representatives of the release of the Firm
Securities, the Company understands that the Underwriters propose to offer the
Firm Securities for sale upon the terms and conditions set forth in the
Prospectus, as amended or supplemented.
With respect to any Offered Securities purchased by an Underwriter that
such Underwriter continues to own or hold at any time on or after the 90th day
following the applicable Closing Date (as defined in Section 3), such
Underwriter agrees that upon receipt of written notice by the Representatives
from the Company of the Company's intention to bid for or purchase any Offered
Security or any security of the same class and series as the Offered Securities
or to take any other action, directly or indirectly, the taking of which would
be proscribed by Rule 10b-6 promulgated by the Commission under the Exchange Act
(or any successor or equivalent rule or regulation) during the distribution of
the Offered Securities, such Underwriter will, and will cause its "affiliated
purchasers" (as defined in said Rule) to, cease distributing any Offered
Securities for such period of time as the Company may deem necessary so that the
action or actions proposed to be taken by it directly or indirectly may be taken
in full compliance with such Rule (or any successor or equivalent rule or
regulation).
3. Delivery and Payment: Delivery of and payment for the Firm Securities
shall be made on the date and at the time agreed to in the applicable Pricing
Agreement (such time and date are referred to herein as a "Closing Date"), at
the office of Baker & Botts, L.L.P., 885 Third Avenue, Suite 1900, New York, New
York. The Closing Date and the place of delivery of and payment for the Firm
Securities may be varied by agreement between you and the Company.
Delivery of Firm Securities (in definitive form and registered in such
names as you shall request at least two business days prior to a Closing Date by
written notice of the Company) shall be made to you for the account of the
respective Underwriters against payment by you on behalf of the respective
Underwriters of the purchase price therefor by cashier or official bank check or
checks payable to the order of the Company in New York Clearing House (next day)
funds. The Company agrees to make the Firm Securities (or Depository Receipts
representing any Firm Securities) available to you for inspection at least 24
hours prior to the Closing Date or such shorter period of time as you may agree
to.
If the applicable Pricing Agreement grants to the Underwriters the right
(an "Over-Allotment Option") to purchase at their election up to the number of
Optional Securities allocated to each of the several Underwriters in the
applicable Pricing Agreement, upon the terms and conditions specified herein and
therein, for the sole purpose of covering over-allotments in the sale of the
Firm Securities, such election to purchase Optional Securities may be exercised
by written notice from the Representatives within the period specified in the
applicable Pricing Agreement setting forth the aggregate number of Optional
Securities to be purchased, the
-4-
<PAGE>
number of Optional Securities to be purchased by each of the Underwriters, and
the date on which such Optional Securities are to be delivered, as determined by
the Representatives but in no event earlier than the Closing Date or, unless the
Representatives and the Company otherwise agree in writing, later than the time
specified in the applicable Pricing Agreement.
4. Agreements of the Company: The Company agrees with you as follows:
(a) The Company will notify you promptly, and (if requested by you in
writing) will confirm such advice in writing, (1) of the effectiveness of
any amendment to the Registration Statement and of the filing of any
supplement to the Prospectus, (2) of any comments of the Commission
regarding the Registration Statement or the Prospectus (or any of the
documents incorporated by reference therein) or of any request by the
Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information, (3) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceedings
for that purpose, (4) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Offered
Securities for offer or sale in any jurisdiction or the initiation or
threatening of any proceedings for such purpose and (5) of the happening of
any event during the period mentioned in paragraph (d) below which makes
any statement of a material fact made in the Registration Statement or the
Prospectus (as theretofore amended or supplemented) untrue or which
requires the making of any changes in the Registration Statement or the
Prospectus (as theretofore amended or supplemented) in order to make the
statements therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading. The Company will use its
reasonable best efforts to prevent the issuance of any order suspending the
effectiveness of the Registration Statement or suspending the qualification
of the Offered Securities for offer or sale in any jurisdiction, and if any
such order is issued, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
(b) The Company will furnish to each of you, without charge, one
conformed copy of the Registration Statement and any supplement and post-
effective amendment thereto, including all financial statements and
schedules, exhibits and documents incorporated therein by reference
(including exhibits incorporated therein by reference to the extent not
previously furnished to you) and will deliver to you for delivery to each
Underwriter the number of conformed copies of the Registration Statement
and any post-effective amendment thereto, excluding exhibits, as you may
request.
(c) The Company will give you advance notice of its intention to file
any amendment or supplement to the Registration Statement or the Prospectus
with respect to the Offered Securities, and will not file any such
amendment or supplement to which you shall reasonably object in writing.
-5-
<PAGE>
(d) During the period of time that the Prospectus is required by law
to be delivered, the Company will deliver to you for delivery to each
Underwriter, without charge, as many copies of the Prospectus or any
amendment or supplement thereto as you may reasonably request on behalf of
the Underwriters. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Underwriters and by all dealers to
whom the Offered Securities may be sold, in connection with the offering or
sale of Offered Securities and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of
the Company should be set forth (or incorporated by reference) in the
Prospectus in order to make the statements therein, in light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and forthwith
file all reports and any definitive proxy statement or information
statement required to be filed by the Company with the Commission pursuant
to Section 13 or 14 of the Exchange Act subsequent to the date of the
Prospectus, and will deliver to you, without charge, such number of copies
thereof as you may reasonably request on behalf of the Underwriters. If
during such period of time any event shall occur which in your judgement
should be so set forth (or incorporated by reference) in the Prospectus, or
which in your judgment makes it necessary to so supplement or amend the
Prospectus, the Company will consult with you concerning the necessity of
filing with the Commission a supplement or an amendment to the Prospectus
or a report pursuant to Section 13 or 14 of the Exchange Act.
(e) Prior to any public offering of any Offered Securities by the
Underwriters, the Company will cooperate with you and counsel retained by
you on behalf of the Underwriters in connection with the registration or
qualification of Offered Securities (and any securities issuable upon
conversion or exercise of any Offered Securities) for offer and sale under
the securities or Blue Sky laws of, and the determination of the
eligibility of Offered Securities for investment under the laws of, such
jurisdictions as you request; provided, that in no event shall the Company
be obligated to qualify to do business as a foreign corporation or as a
securities dealer in any jurisdiction where it is not now so qualified, to
conform its capitalization or the composition of its assets to the
securities or Blue Sky laws of any jurisdiction or to take any action which
would subject it to taxation or general service of process in any
jurisdiction where it is not now so subject. The Company will pay all
reasonable fees and expenses (including reasonable counsel fees and
expenses) relating to registration or qualification of Offered Securities
(and any securities issuable upon conversion or exercise of any Offered
Securities) under such securities or Blue Sky laws and in connection with
the determination of the eligibility of Offered Securities for investment
under the laws of such jurisdictions as you may designate.
(f) The Company will make generally available to its security holders
and to you and to each Underwriter who may request the same consolidated
earnings statements
-6-
<PAGE>
(which need not be audited) that satisfy the provisions of Section 11(a) of
the Act and Rule 158 thereunder.
(g) The Company will pay or cause to be paid the following: (1) all
costs and expenses incurred in connection with the preparation, printing
and filing of the Registration Statement, any preliminary prospectus, the
Prospectus, any legal investment memorandum and Blue Sky memorandum as
contemplated by Section 4(e), (2) any filing fees incident to any required
review of the Offered Securities by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Offered Securities, (3) any
fees charged by securities rating agencies for rating any of the Offered
Securities, (4) all costs and expenses incurred in connection with the
preparation, issuance and delivery of the Offered Securities (including
Depositary Receipts evidencing Depositary Shares) (other than transfer
taxes), (5) all expenses incurred in connection with the preparation,
execution and delivery of any Deposit Agreement or Warrant Agreement and,
to the extent set forth therein, the fees and expenses of the Depositary or
the Warrant Agent, respectively, (6) the cost of printing of any Dealer
Agreement, and (7) all costs and expenses incurred in connection with
furnishing such copies of the Registration Statement, the Prospectus and
any preliminary prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of
Offered Securities by dealers to whom Offered Securities may be sold.
(h) If this Agreement is terminated by you because any condition to
the obligations of you and the Underwriters set forth in Section 7 hereof
is not satisfied or because of any failure or refusal on the part of the
Company to comply with the terms of this Agreement or the applicable
Pricing Agreement, or if for any reason the Company shall be unable to
perform its obligations herein or therein, the Company will reimburse you
on behalf of the Underwriters for all out-of-pocket expenses (including the
fees and expenses of counsel retained by you on behalf of the Underwriters)
reasonably incurred by you in connection herewith. The Company will not in
any event be liable to you or any of the Underwriters for damages on
account of loss of anticipated profits.
(i) From the date hereof to and including the applicable Closing Date,
the Company will not offer or sell, or contract to sell, Offered Securities
pursuant to a public offering without your prior written consent.
5. Representations and Warranties of the Company: The Company represents
and warrants to each Underwriter that:
(a) the documents incorporated by reference in the Registration
Statement and the Prospectus, when they were filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed)
with the Commission, conformed in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated
by reference will, when they are filed with the Commission,
-7-
<PAGE>
conform in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission promulgated thereunder;
none of such documents, when it was filed (or, if an amendment with respect
to any such document was filed, when such amendment was filed), contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
and no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they are made, not misleading;
(b) the Registration Statement, when declared effective by the
Commission, complied in all material respects with the requirements of the
Act; each preliminary prospectus, if any, relating to the Offered
Securities, filed pursuant to Rule 424 under the Act, will comply when so
filed in all material respects with the Act; and when the Prospectus is
first filed with the Commission pursuant to Rule 424 and as of the
applicable Closing Date, the Registration Statement and the Prospectus (as
amended or supplemented, if applicable) will comply in all material
respects with the requirements of the Act. When it was declared effective
by the Commission, the Registration Statement did not, and as of the date
the Prospectus is first filed with the Commission pursuant to Rule 424 and
as of the applicable Closing Date the Registration Statement (as amended or
supplemented, if applicable) will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. When
the Prospectus is first filed with the Commission pursuant to Rule 424 and
as of the applicable Closing Date, the Prospectus (as amended or
supplemented, if applicable) will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Notwithstanding
the foregoing, this representation and warranty does not apply to
statements or omissions in the Registration Statement or the Prospectus or
any preliminary prospectus made in reliance upon information furnished to
the Company in writing by the Underwriters through the Representatives
expressly for use therein;
(c) the Offered Securities have been duly authorized by the Company
and conform to the descriptions thereof in the Prospectus and in the
related Pricing Agreement;
(d) if any of the Offered Securities is Common Stock, such Common
Stock has been duly and validly authorized and, when such Common Stock is
issued and delivered pursuant to this Agreement and the Pricing Agreement
and paid for by the Underwriters in accordance therewith, such Common Stock
will be duly and validly issued and fully paid and non-assessable;
-8-
<PAGE>
(e) if any of the Offered Securities is Preferred Stock, such
Preferred Stock has been duly and validly authorized and, upon the filing
of a Certificate of Designations for such Preferred Stock with the Delaware
Secretary of State and the issuance and delivery of such Preferred Stock
against payment therefor by the Underwriters in accordance with this
Agreement and the Pricing Agreement, such Preferred Stock will be duly and
validly issued and fully paid and non-assessable; if such Preferred Stock
is convertible into Common Stock, the Common Stock initially issuable upon
exercise of such Preferred Stock has been reserved for issuance upon such
conversion and, when issued in accordance with the terms of the Certificate
of Designations upon conversion of such Preferred Stock, such Common Stock
will be duly authorized, validly issued, fully paid and non-assessable;
(d) if the Offered Securities include Preferred Stock and Depositary
Shares, the Deposit Agreement has been duly authorized and, when executed
and delivered by the Company at the Closing Date and, assuming due
authorization, execution and delivery by the Depositary, at such Closing
Date will constitute a valid and legally binding agreement of the Company
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity); when
such Preferred Stock is issued and delivered to the Depositary against
receipt of Depositary Receipts evidencing such Depositary Shares and
payment therefor by the Underwriters in accordance with this Agreement and
the Pricing Agreement, such Depositary Shares will be duly and validly
issued and the persons in whose names the Depositary Receipts are
registered shall be entitled to the rights specified therein and in the
Deposit Agreement;
(e) if the Offered Securities include Common Stock Warrants or
Preferred Stock Warrants, the Warrant Agreement has been duly authorized
and, when executed and delivered by the Company at the Closing Date and,
assuming due authorization, execution and delivery by the Warrant Agent, at
such Closing Date will constitute a valid and legally binding agreement of
the Company enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or equity); such Common
Stock Warrants or Preferred Stock Warrants have been duly authorized and,
when such Common Stock Warrants or Preferred Stock Warrants are issued and
delivered against payment therefor by the Underwriters in accordance with
this Agreement and the Pricing Agreement, and countersigned by the Warrant
Agent as provided in the Warrant Agreement, such Common Stock Warrants or
Preferred Stock Warrants (x) will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles
-9-
<PAGE>
(regardless of whether the issue of enforceability is considered in a
proceeding at law or equity) and (y) the persons in whose names such
Common Stock Warrants or Preferred Stock Warrants are registered shall be
entitled to the rights specified therein and in the Warrant Agreement; and
the securities initially issuable upon exercise of such Common Stock
Warrants or Preferred Stock Warrants have been reserved for issuance upon
such exercise and, when issued in accordance with the terms of the Warrant
Agreement against payment of the exercise price provided for in the Warrant
Agreement, such securities will be duly authorized, validly issued, fully
paid and non-assessable;
(f) the issuance and sale of the Offered Securities and the
fulfillment of the terms of this Agreement and the related Pricing
Agreement will not result in a breach of any of the terms or provisions of,
or constitute a default under, the Company's charter or by-laws or any
indenture, mortgage, deed of trust or other material agreement or
instrument to which the Company or any of its significant subsidiaries (as
such term is defined in "Rule 1.02(v) of Regulation S-X) is now a party or
by which it is bound, or any order of any court or governmental agency or
authority entered in any proceeding to which the Company or any of its
significant subsidiaries was or is now a party or by which it is bound;
(g) KPMG Peat Marwick LLP, the Company's auditors, are independent
accountants as required by the Act;
(h) so long as may be required for the distribution of the Offered
Securities by any Underwriter or by any dealers that participate in the
distribution thereof, the Company will comply with all requirements under
the Exchange Act relating to the timely filing with the Commission of its
reports pursuant to Section 13 of the Exchange Act and of its proxy
statements pursuant to Section 14 of the Exchange Act; and
(i) except to the extent set forth in the Prospectus, the Company has
not received any notice of, nor does it have any actual knowledge of, any
failure by it or any of its significant subsidiaries to be in substantial
compliance with all existing statutes and regulations applicable to it or
such subsidiaries, which failure would materially and adversely affect the
conduct of the business of the Company and its subsidiaries, considered as
a whole.
6. Indemnification: The Company agrees to indemnify and hold harmless
each Underwriter, and each person, if any, who controls each Underwriter within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or in any preliminary prospectus, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such omission or
-10-
<PAGE>
allegation thereof based upon information furnished in writing to the Company by
an Underwriter through the Representatives expressly for user therein; provided,
however, that the Company shall not indemnify an Underwriter or any person who
controls such Underwriter for any such losses, claims, damages or liabilities
alleged by any person who purchased Offered Securities from such Underwriter if
the untrue statement, omission or allegation thereof upon which such losses,
claims, damages or liabilities are based was made in: (i) any preliminary
prospectus, if a copy of the Prospectus (as then amended or supplemented) was
not sent or given by or on behalf of such Underwriter to such person at or prior
to the written confirmation of the sale of Offered Securities to such person,
and if the Prospectus (as so amended or supplemented) corrected the untrue
statement or omission giving rise to such loss, claim, damage or liability; (ii)
any Prospectus used by such Underwriter or any person who controls such
Underwriter, after such time as the Company advised the Representatives that the
filing of a post-effective amendment or supplement thereto was required, except
the Prospectus as so amended or supplemented; or (iii) any Prospectus used after
such time as the obligation of the Company to keep the same current and
effective has expired. This indemnity will be in addition to any liability
which the Company may otherwise have. All fees and expenses which are
reimbursable pursuant to this Section 6 shall be reimbursed as they are
incurred.
If any action or proceeding (including any governmental investigation)
shall be brought or asserted against an Underwriter or any person controlling an
Underwriter in respect of which indemnity may be sought from the Company, such
Underwriter or such controlling person shall promptly notify the Company in
writing, and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to you and the payment of all
expenses. Any omission so to notify the Company shall not, however, relieve
the Company from any liability which it may have to any indemnified party
otherwise than under this Section 6. An Underwriter or any person controlling
an Underwriter shall have the right to employ separate counsel in any such
action or proceeding and to participate in the defense thereof, but the fees and
expenses of such separate counsel shall be at such Underwriter's expense or the
expense of such controlling person unless (a) the Company has agreed to pay such
fees and expenses or (b) the Company shall have failed to assume the defense of
such action or proceeding and employ counsel reasonably satisfactory to you in
any such action or proceeding or (c) the named parties to any such action or
proceeding (including any impleaded parties) include both such Underwriter and
such controlling person, and you shall have been advised by your counsel that
there may be a conflict of interest between such Underwriter or such controlling
person and the Company in the conduct of the defense of such action (in which
case, if such Underwriter or such controlling person notifies the Company in
writing that it elects to employ separate counsel at the expense of the Company,
the Company shall not have the right to assume the defense of such action or
proceeding on behalf of such Underwriter or such controlling person), it being
understood, however, that the Company shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (unless the members of such firm are not admitted to practice in a
jurisdiction where an action is pending, in which case the Company shall pay the
reasonable fees and expenses of one additional firm
-11-
<PAGE>
of attorneys to act as local counsel in such jurisdiction, provided the services
of such counsel are substantially designed in writing by you). The Company
shall not be liable for any settlement of any such action or proceeding effected
without its written consent, but if settled with its written consent, or if
there be a final judgement for the plaintiff in any such action or proceeding,
the Company agrees to indemnify and hold harmless each Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement or judgement.
Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors and each of its officers, and each person, if any, who
controls the Company within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only with respect to information
furnished in writing by such Underwriter through the Representatives expressly
for use in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any preliminary prospectus. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person, in respect of which indemnity may be sought against
one or more of the several Underwriters, such Underwriters acting through the
Representatives shall have the rights and duties given to the Company, and the
Company or its directors or officers or such controlling person shall have the
rights and duties given to you and the several Underwriters, by the preceding
paragraph.
If the indemnification provided for in this Section 6 is unavailable to an
indemnified party under the first or third paragraph hereof in respect of any
losses, claims, damages or liabilities; referred to therein (other than by
reason of such indemnified party's failure to comply with the first sentence of
the second paragraph of this Section 6), then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other in connection with the
offering of the Offered Securities shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Offered Securities received
by the Company bear to the total underwriting discounts received by the
Underwriters in respects thereof. The relative fault of the Company on the one
hand and of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact related to
information supplied by the Company or by the Underwriters through the
Representatives and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of this Section 6, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigation or defending any action or claim.
-12-
<PAGE>
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6, the Underwriters shall not be
required to contribute any amount in excess of the amount by which the total
price at which Designated Securities were offered to the public exceeds the
amount of any damages which the Underwriters have otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution or indemnification from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 6 and
the representations and warranties of the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (a) any
investigation made by or on behalf of any Underwriter, by or on behalf of any
person controlling or any Underwriter or by or on behalf of the Company, (b)
acceptance of any of the Offered Securities and payment therefor or (c) any
termination of this Agreement or the applicable Pricing Agreement.
7. Conditions of the Obligations of You and the Underwriters: The
obligations of you and the Underwriters hereunder and under the applicable
Pricing Agreement are subject to the following conditions:
(a) at the applicable Closing Date no stop order suspending the
effectiveness of the Registrant Statement shall have been issued and no
proceedings for that purpose shall be pending or threatened by the
Commission; and the Representatives shall have received a certificate,
dated the applicable Closing Date and signed by the Chairman of the Board,
the President, an Executive Vice President or the Senior Vice President --
Finance and Treasurer of the Company (who may, as to threatened
proceedings, rely upon the best of his information and belief), to that
effect and to the effect set forth in clause (g) of this Section 7;
(b) the Representatives shall have received opinions, dated the
applicable Closing Date and reasonably satisfactory to counsel retained by
the Representatives on behalf of the Underwriters, (A) from Messrs. Cole,
Raywood & Braverman or such other special communications counsel for the
Company as may be reasonably satisfactory to the Representatives, (B) from
the General Counsel of the Company to the following effect and covering
such additional matters as the Representatives may reasonably request:
(i) the Company and each of its significant subsidiaries is a
corporation duly organized, validity existing and in good standing
under the laws of the jurisdiction of its incorporation and has the
corporate power and authority to carry on its business as described in
the Prospectus (as amended or supplemented, if applicable) and the
Company has the corporate power and
-13-
<PAGE>
authority to execute and deliver and perform its obligations under
this Agreement and the Pricing Agreement, and to issue and sell the
Offered Securities as contemplated by this Agreement and the Pricing
Agreement;
(ii) the Company and each of its significant subsidiaries is duly
qualified as a foreign corporation and is in good standing in each
jurisdiction in which the failure to so qualify would, in the
aggregate, have a material adverse effect upon the financial
condition, results of operations, business or properties of the
Company and its subsidiaries taken as a whole;
(iii) all corporate proceedings legally required in connection
with the authorization and issuance of, and the sale of, the Offered
Securities by the Company in accordance with the terms of this
Agreement and the Pricing Agreement have been taken;
(iv) to the best knowledge of such counsel, there is no legal or
governmental proceeding pending or threatened against the Company or
any of its subsidiaries which is required to be disclosed in the
Prospectus (as amended or supplemented, if applicable) and is not so
disclosed and correctly summarized therein;
(v) to the best knowledge of such counsel, there is no contract
or other document known to such counsel of a character required to be
described in the Prospectus (as amended or supplemented, if
applicable) or to be filed as an exhibit to the Registration Statement
(or to a document incorporated by reference therein) that is not
described or filed as required;
(vi) the execution and delivery of this Agreement and of the
Pricing Agreement, the issuance of the Offered Securities and the
fulfillment of the terms herein and therein contained do not conflict
with, or result in a breach of, or constitute a default under, the
charter or by-laws of the Company or, to the best knowledge of such
counsel, conflict in any material respect with, or result in a
material breach of or constitute a material default under any material
agreement, indenture or other instrument known to such counsel to
which the Company or any of its significant subsidiaries is a party or
by which it is bound, or result in a violation of any law,
administrative regulation or court or governmental decree known to
such counsel applicable to the Company or any of its subsidiaries,
except that such counsel need not express any opinion with respect to
(i) matters opined upon by special communications counsel and Messrs.
Sherman & Howard or (ii) the Blue Sky or securities laws of any
jurisdiction; and
(vii) to the best knowledge of such counsel, neither the
Registration Statement nor the Prospectus, as amended or supplemented,
if applicable (expect as to the financial statements and schedules and
any other financial and statistical
-14-
<PAGE>
data contained or incorporated by reference in the Registration
Statement or Prospectus, as to which no opinion need be expressed),
contained, as of the date of the Prospectus was first filed with the
Commission pursuant to Rule 424, or contains, as of the applicable
Closing Date, any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus as amended
or supplemented, if applicable, in light of the circumstances under
which they were made,) not misleading.
(C) from Messrs. Sherman & Howard, or from such other special counsel
for the Company as may be reasonably satisfactory to the Representatives,
to the following effect and covering such additional matters as the
Representatives may reasonable request:
(i) the execution and delivery of this Agreement and of the
Pricing Agreement, the issuance of the Offered Securities and the
fulfillment of the terms herein and therein contained do not, to the
best knowledge of such counsel, result in a material breach of or
constitute a material default under any material agreement for
borrowed money known to such counsel to which the Company or any of
its significant subsidiaries is a party or by which it is bound; and
(ii) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and is not
subject to regulation under such Act.
and
(D) from Baker & Botts, L.L.P., special counsel to the Company, or
such other counsel to the Company as may be reasonably satisfactory to the
Representatives, to the following effect and covering such additional
matters as the Representatives may reasonably request:
(i) this Agreement and the applicable Pricing Agreement have been
duly authorized, executed and delivered by the Company;
(ii) if any of the Offered Securities is Common Stock, such
Common Stock has been duly and validly authorized and, when such
Common Stock is issued, signed by the transfer agent and delivered
pursuant to this Agreement and the Pricing Agreement and paid for by
the Underwriters in accordance therewith, such Common Stock will be
duly and validly issued and fully paid and non-assessable;
(iii) if any of the Offered Securities is Preferred Stock, such
Preferred Stock has been duly and validly authorized and, upon the
filing of a Certificate
-15-
<PAGE>
of Designations for such Preferred Stock with the Delaware Secretary
of State and the issuance, the execution by the transfer agent and
delivery of such Preferred Stock against payment therefor by the
Underwriters in accordance with this Agreement and the Pricing
Agreement, such Preferred Stock will be duly and validly issued and
fully paid and non-assessable; if such Preferred Stock is convertible
into Common Stock, the Common Stock initially issuable upon exercise
of such Preferred Stock has been reserved for issuance upon such
conversion and, when issued in accordance with the terms of the
Certificate of Designations upon conversion of such Preferred Stock,
such Common Stock will be duly authorized, validly issued, fully paid
and non-assessable;
(iv) if the Offered Securities include Preferred Stock and
Depositary Shares, the Deposit Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Depositary, constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles (regardless of whether the issue of enforceability is
considered in a proceeding at law or in equity); and the Deposit
Agreement conforms to the description thereof in the Prospectus, as
amended or supplemented;
(v) if the Offered Securities include Common Stock Warrants or
Preferred Stock Warrants, the Warrant Agreement has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Warrant Agent,
constitutes a valid and legally binding agreement of the Company
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or equity); such
Common Stock Warrants or Preferred Stock Warrants have been duly
authorized and, when such Common Stock Warrants or Preferred Stock
Warrants are issued and delivered against payment therefor by the
Underwriters in accordance with this Agreement and the Pricing
Agreement, and countersigned by the Warrant Agent as provided in the
Warrant Agreement, such Common Stock Warrants or Preferred Stock
Warrants will constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles (regardless of
whether the issue of enforceability is considered in a proceeding at
law or equity); the securities initially issuable upon exercise of
such Common Stock Warrants or Preferred Stock Warrants have been
reserved for issuance upon such exercise and, when issued in
accordance with the terms of the Warrant
-16-
<PAGE>
Agreement against payment of the exercise price provided for in the
Warrant Agreement, such securities will be duly authorized, validly
issued, fully paid and non-assessable; and the Warrant Agreement
conforms as to the description thereof in the Prospectus, as amended
or supplemented;
(vi) the Registration Statement is effective under the Act and,
to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission; and
(vii) the Offered Securities conform in all material respects as
to legal matters to the descriptions thereof in the Prospectus, as
amended or supplemented.
In addition, such counsel shall state that "The Registration Statement
and the Prospectus, as amended or supplemented, if applicable (except as to
(x) the financial statements and schedules and any other financial and
statistical data contained or incorporated by reference therein and (y) the
documents incorporated or deemed to be incorporated by reference therein,
as to which no opinion is expressed), complied, as of the date the
Prospectus was first filed with the Commission pursuant to Rule 424, and
comply, as of the date hereof, as to form in all material respects with the
requirements of the Act and the rules and regulations of the Commission
under the Act (the "Rules"). In passing upon the form of such documents,
we have necessarily assumed the correctness and completeness of the
statements made or included therein by the Company and take no
responsibility for the accuracy, completeness or fairness of the statements
contained therein except insofar as such statements relate to the
description of the Offered Securities or relate to us. However, in
connection with the preparation of the Registration Statement and the
Prospectus, we had conferences with certain officers and other
representatives of the Company, and our examination of the Registration
Statement and the Prospectus and our discussions in such conferences did
not disclose to us any information (relying as to the materiality of any
such information primarily upon officers and other representatives of the
Company) which gave us reason to believe that either the Registration
Statement or the Prospectus, as amended or supplemented, if applicable
(except as to (x) the financial statements and schedules and any other
financial and statistical data contained or incorporated or deemed to be
incorporated by reference therein, as to which no opinion is expressed),
contained, as of the date the Prospectus was first filed with the
Commission pursuant to Rule 424, or contains, as of the date hereof, any
untrue statement of a material fact or omitted or omits to state any
material fact required to be stated therein or necessary to make the
statements therein (in the cases of the Prospectus, as amended, or
supplemented, if applicable, in light of the circumstances under which they
were made) not misleading."
In giving such opinions, such counsel may rely (x) as to matters of
fact, to the extent they deem proper, upon certificates of officers of the
Company, public officials
-17-
<PAGE>
and others, and (y) as to matters of law if other than the United States or
Colorado (in the case of Messrs. Sherman & Howard and General Counsel of
the Company) or New York (in the case of Baker & Botts, L.L.P.), on the
opinions of local counsel retained by them or the Company, provided that
such counsel are satisfactory to the Representatives and counsel retained
by the Representatives on behalf of the Underwriters;
(c) if the Offered Securities include Preferred Stock and Depositary
Shares, the Representatives shall have received on the applicable Closing
Date from counsel to the Depositary an opinion, dated such Closing Date, to
the following effect:
(i) the Depositary has full power, authority and legal right to
execute, deliver and carry out the terms of the Deposit Agreement;
(ii) the Deposit Agreement has been duly authorized, executed and
delivered by the Depositary and, assuming due authorization, execution
and delivery by the Company, constitutes a valid and legally binding
agreement of the Depositary enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles
(regardless of whether the issue of enforceability is considered in a
proceeding at law or in equity); and
(iii) upon due issuance by the Depositary of Depositary Shares
evidenced by Depositary Receipts in accordance with the terms of the
Deposit Agreement against deposit in accordance with the Deposit
Agreement of validly issued, fully paid and non-assessable shares of
Preferred Stock, such Depositary Shares will be duly and validly
issued and the persons in whose names the Depositary Receipts are
registered shall be entitled to the rights specified therein and in
the Deposit Agreement.
(d) if the Offered Securities include Common Stock Warrants or
Preferred Stock Warrants, the Representatives shall have received on the
applicable Closing Date from counsel to the Warrant Agent, an opinion,
dated such Closing Date, to the following effect:
(i) the Warrant Agent has full power, authority and legal right
to execute, deliver and carry out the terms of the Warrant Agreement;
(ii) the Warrant Agreement has been duly authorized, executed and
delivered by the Warrant Agent and, assuming due authorization,
execution and delivery by the Company, constitutes a valid and
legally binding agreement of the Warrant Agent enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other
-18-
<PAGE>
laws of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether the
issue of enforceability is considered in a proceeding at law or in
equity); and
(iii) upon the countersignature and due issuance by the Warrant
Agent of the Common Stock Warrants or the Preferred Stock Warrants in
accordance with the terms of the Warrant Agreement, such Warrants will
be duly and validly issued and the persons in whose names such
Warrants are registered shall be entitled to the rights specified
therein and in the Warrant Agreement.
(e) the Representatives shall have received on the applicable Closing
Date from counsel retained by the Representatives on behalf of the
Underwriters an opinion with respect to the Offered Securities, the
Registration Statement and the Prospectus in the form customarily given by
such firm, including an opinion to the effect that the Registration
Statement and the Prospectus, as amended or supplemented, if applicable
(except as to (x) the financial statements and schedules and any other
financial and statistical data contained or incorporated by reference
therein, and (y) the documents incorporated or deemed to be incorporated by
reference therein, as to which no opinion need be expressed) comply as to
form in all material respects with the Act;
(f) on the applicable Closing Date the Representatives shall have
received a letter addressed to the Representatives from KPMG Peat Marwick
LLP, independent auditors for the Company, reasonably satisfactory to the
Representatives;
(g) the representations and warranties of the Company in this
Agreement shall be true and correct on and as of the applicable Closing
Date; the Company shall have complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
applicable Closing Date; and except as reflected in or contemplated by the
Registration Statement and the Prospectus, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there shall not have been, at the applicable Closing Date, any
material adverse change in the condition (financial or otherwise),
business, prospects or results of operations of the Company and its
subsidiaries, considered as a whole; and
(h) subsequent to the date of the applicable Pricing Agreement, there
shall not have occurred any change, or any development involving a
prospective change, in or affecting particularly the business, prospects or
financial affairs of the Company and its subsidiaries, considered as a
whole which, in the reasonable judgment of the Representatives, is so
material and adverse that it would be impracticable to proceed with the
public offering or delivery of the Offered Securities on the terms and in
the manner contemplated by the Prospectus.
8. Termination of Pricing Agreement: The obligation of the Underwriters
to purchase the Offered Securities may be terminated at any time prior to the
applicable Closing
-19-
<PAGE>
Date by notice to the Company from the Representatives, without liability on the
part of the Underwriters to the Company, if, on or prior to such date (i)
additional material governmental restrictions, not in force and effect on the
date of the applicable Pricing Agreement, shall have been imposed upon trading
in securities generally, or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange, or
trading in securities generally shall have been suspended on either such
Exchange or trading in securities of the Company of the same class as the
Offered Securities in the over-the-counter market shall have been suspended or a
general banking moratorium shall have been established by Federal or New York
authorities, or (ii) a war involving the United States of America or other
national calamity shall have occurred or shall have accelerated to such an
extent as to affect adversely the marketability of the Offered Securities.
9. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail on the applicable Closing Date to purchase the Firm
Securities or Optional Securities, as the case may be, that it or they are
obligated to purchase hereunder (the "Defaulted Securities"), the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any
substitute underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be approved by the Representatives
and upon the terms herein set forth; if, however, the Representatives have not
completed such arrangements within such 24-hour period, then:
(a) if the amount of Defaulted Securities does not exceed 10% of the
aggregate amount of the Firm Securities or the Optional Securities, as the
case may be, the non-defaulting Underwriters shall be obligated to purchase
the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the amount of Defaulted Securities exceeds 10% of the aggregate
amount of Firm Securities or Optional Securities, as the case may be, the
Company shall be entitled to an additional 24-hour period to find one or
more substitute underwriters satisfactory to the Representatives in their
reasonable discretion to purchase such Defaulted Securities.
In the event of any such default either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements relating to
the purchase of the Offered Securities.
If the amount of Defaulted Securities exceeds 10% of the aggregate amount
of the Firm Securities or the Optional Securities, and neither the
Representatives nor the Company make arrangements pursuant to this Section 9
within the period stated for the purchase of the Defaulted Securities, the
applicable Pricing Agreement shall terminate with respect to such Firm
Securities or Optional Securities, as the case may be, without liability on the
part of any non-defaulting Underwriter to the Company except as provided in
Section 6.
-20-
<PAGE>
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
A substitute underwriter hereunder shall be an Underwriter for all purposes
of this Agreement and the applicable Pricing Agreement.
10. Miscellaneous: Notice given pursuant to any of the provisions of this
Agreement or the applicable Pricing Agreement shall be in writing and shall be
mailed or delivered (a) to the Company at its office, Terrace Tower II, 5619 DTC
Parkway, Englewood, Colorado 80111-3000, attention: Donne F. Fisher, Executive
Vice President (Principal Financial Officer), or (b) to you at the address of
such Representative specified in the applicable Pricing Agreement. Any notice
under Section 8 hereof may be telex or telephone, but if so made shall be
subsequently confirmed in writing.
This Agreement and the applicable pricing Agreement have been and are
made solely for the benefit of the Underwriters and the Company and of the
controlling persons, directors and officers referred to in section 6 hereof,
and their respective successors and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement or the applicable Pricing
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Offered Securities from any
Underwriter.
This Agreement and the applicable Pricing Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York.
-21-
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
TELE-COMMUNICATIONS, INC.
By:_______________________________________________
Confirmed as of the date
first above mentioned
[Names of Representatives]
By: [Lead Representative]
By:_____________________________________
Title:
Each acting on behalf of
itself and together as the
Representatives of the Underwriters
named in Exhibit B to Annex I hereto.
-22-
<PAGE>
ANNEX I
PRICING AGREEMENT
-----------------
___________, 19____
[Name of Representatives]
As Representatives of the several
Underwriters named in Schedule I hereto,
c/o [name and address of Lead Representative]
Dear Sirs:
Tele-Communications, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement dated ___________________, 19__ (the "Underwriting
Agreement"), to issue and sell to the Underwriters named in Exhibit A hereto
(the "Underwriters") certain securities (the "Offered Securities") described in
Exhibit B hereto.
Each of the provisions of the Underwriting Agreement is incorporated herein
by reference in its entirety, and shall be deemed to be a part of this Pricing
Agreement to the same extent as if such provisions had been set forth in full
herein. Each of the representations and warranties set forth in the
Underwriting Agreement shall be deemed to have been made at and as of the date
of this Pricing Agreement, except that each representation and warranty with
respect to the Prospectus shall be deemed to be a representation and warranty as
of the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Offered Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions
of the Underwriting Agreement so incorporated by reference shall be deemed to
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Offered Securities pursuant to Section 2 of the Underwriting
Agreement and the addresses of such Representatives are set forth at the end of
Exhibit A hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Offered Securities, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Annex I-1
<PAGE>
Subject to the terms and conditions set forth herein and the Underwriting
Agreement incorporated herein by reference, the Company agrees to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase form the Company, at a purchase price to the Underwriters
set forth in Exhibit A hereto, the number of Firm Securities set forth opposite
the name of such Underwriter in Exhibit A hereto. If and to the extent that the
Underwriters exercise the election to purchase Optional Securities as provided
below, the Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase form the Company at
the purchase price to the Underwriters set forth in Exhibit A hereto that
portion of the number of Optional Securities as to which such election has been
exercised.
The Company hereby grants to each of the Underwriters, subject to the terms
set forth herein and in the Underwriting Agreement, the right to purchase at
their election up to the number of Optional Securities set forth opposite the
name of such Underwriter in Exhibit A hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Securities.
Delivery and payment for the Firm Securities shall be made at 10:00 a.m.
New York time on __________________, 19___ (the "Closing Date") at the office of
Baker & Botts L.L.P., 885 Third Avenue, Suite 1900, New York, New York 10022.
The Closing Date and the place of delivery of and payment for the Firm
Securities may be varied by agreement between the Underwriters and the Company.
Any election to purchase Optional Securities may be exercised by written
notice from the Representatives to the Company given within a period of 30 days
after the date of this Agreement, setting forth the aggregate number of Optional
Securities to be purchased, the number of Optional Securities to be purchased by
each of the Underwriters, and the date on which such Optional Securities are to
be delivered as determined by the Representatives, but in no event earlier than
the Closing Date.
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this Pricing Agreement, including the provisions of
the Underwriting Agreement incorporated herein by reference, shall constitute a
binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among
Annex I-2
<PAGE>
Underwriters, the form of which shall be submitted to the Company for
examination, upon request.
Very truly yours,
TELE-COMMUNICATIONS, INC.
By:_______________________________________________
Confirmed as of the date
first above mentioned
[Names of Representatives]
By: [Name of Lead Representative]
By:______________________________________________________
Title:
Each acting on behalf of
itself and together as the
Representatives of the Underwriters
named in Exhibit A hereto.
Annex I-3
<PAGE>
EXHIBIT A
TO A PRICING
AGREEMENT DATED
__________, 19__
<TABLE>
<CAPTION>
NUMBER OF OFFERED
-----------------
SECURITIES
----------
<S> <C> <C>
FIRM OPTIONAL/1/
---- ----------
UNDERWRITER COMMON STOCK
----------- ------------
[Names of Underwriters]..................
Total..........................
PREFERRED STOCK (DEPOSITARY
UNDERWRITER ---------------------------
----------- SHARES)
-------
[Names of Underwriters]..................
Total..........................
UNDERWRITER COMMON STOCK WARRANTS
----------- ---------------------
[Names of Underwriters]..................
Total..........................
UNDERWRITER PREFERRED STOCK WARRANTS
----------- ------------------------
[Names of Underwriters]..................
Total..........................
Names and Addresses of Representatives:
- -----------------------------------------
- -----------------------------------------
- -----------------------------------------
- -----------------------------------------
</TABLE>
/1/ Maximum Number
A-1
<PAGE>
EXHIBIT B
TO A PRICING AGREEMENT
DATED __________, 19__
OFFERED SECURITIES
COMMON STOCK:
- ------------
Title: Class A Common Stock, $1.00 par value per share
Voting Rights: _________________________________
Purchase Price (includes accrued dividends, if any):
(1) Firm: ___________________________
(2) Optional: ________________________
Commission: $_____ per share
Initial Public Offering Price (or method of calculation): ____________
Dividend: __________
Conversion Rate: _______
Record Dates: __________
Other Terms: ________________________________________
PREFERRED STOCK:
- ---------------
Title:
Voting Rights: ___________________________________
Purchase Price (includes accrued dividends, if any):
(1) Firm: ___________________________
(2) Optional: ________________________
Commission: $_____ per share
Initial Public Offering Price (or method of calculation): ____________
Liquidation Value Per Share: ___________
B-1
<PAGE>
Dividend Rate [formula]: __________
Dividend Payment Date(s): _________
Conversion or Exchange Rate: ____________
Sinking Fund Provisions: _________
Redemption Provisions: __________
Other Terms: ________________________________________
DEPOSITARY SHARES:
- -----------------
Number of Shares (or Fraction of a Share) of Preferred Stock
Represented by Each Depositary Share: _____________
Purchase Price: (1) Firm: ____________________________
(2) Optional: ________________________
Commission: $_____ per share
Initial Public Offering Price (or method of calculation): ____________
Other Terms: ________________________________________
COMMON STOCK WARRANTS:
- ---------------------
Title: _____________________
Number of Shares issuable upon exercise of one Warrant: _______________
Warrant exercise price: _____________
Purchase Price: (1) Firm: ____________________________
(2) Optional: ________________________
Commission: $_____ per Warrant
Initial Public Offering Price (or method of calculation): ____________
Date after which Warrants are exercisable: __________
Expiration Date: __________
B-2
<PAGE>
Warrant Agent: ___________
Other Terms: ________________________________________
PREFERRED STOCK WARRANTS:
- ------------------------
Title: _____________
Number of Shares issuable upon exercise of one Warrant: ______________
Warrant exercise price: ______________
Purchase Price: (1) Firm: ___________________________
(2) Optional: ________________________
Commission: $_____ per Warrant
Initial Public Offering Price (or method of calculation): ____________
Date after which Warrants are exercisable: __________
Expiration Date: ___________
Warrant Agent: ____________
Other Terms: ________________________________________
UNITS [If any]
- -----
Title and number of shares of Common Stock, title and number of shares of
Preferred Stock and title and number of Warrants included in one Unit:
Purchase Price: (1) Firm: __________________________
(2) Optional: ______________________
Commission: $_____ per Unit
Initial Public Offering Price (or method of calculation): ____________
Detachable Date, if any: __________
Other Provisions: __________
B-3
<PAGE>
EXHIBIT 4.2
DEPOSIT AGREEMENT
among
TELE-COMMUNICATIONS, INC.
and
______________________________________________
and
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
Dated as of ________ __, 199_
<PAGE>
-i-
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS............................................................. 1
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK,
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS.............. 3
SECTION 2.1. Form and Transferability of Receipts................... 3
SECTION 2.2. Deposit of Preferred Stock, Execution and Delivery of
Receipts in Respect Thereof....................................... 4
SECTION 2.3. Redemption of Preferred Stock.......................... 5
SECTION 2.4. Transfer of Receipts................................... 7
SECTION 2.5. Combination and Split-ups of Receipts.................. 7
SECTION 2.6. Surrender of Receipts and Withdrawal of Preferred Stock 7
SECTION 2.7. Limitations on Execution and Delivery, Transfer, Split-
up, Combination, Surrender and Exchange of Receipts.............. 8
SECTION 2.8. Lost Receipts, etc..................................... 8
SECTION 2.9. Cancellation and Destruction of Surrendered Receipts... 9
SECTION 2.10. Conversion of Preferred Stock into Class A Common
Stock............................................................. 9
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY............................................. 11
SECTION 3.1. Filing Proofs, Certificates and Other Information...... 11
SECTION 3.2. Payment of Taxes or Other Governmental Charges......... 11
SECTION 3.3. Representations and Warranties as to Preferred Stock... 12
ARTICLE IV
THE PREFERRED STOCK, NOTICES............................................ 12
SECTION 4.1. Cash Distributions..................................... 12
SECTION 4.2. Distributions Other Than Cash.......................... 12
SECTION 4.3. Subscription Rights, Preferences or Privileges......... 13
SECTION 4.4. Notice of Dividends; Fixing of Record Date for Holders
of Receipts....................................................... 14
<PAGE>
-ii-
SECTION 4.5. Voting Rights.......................................... 14
SECTION 4.6. Changes Affecting Preferred Stock and Reclassifications,
Recapitalizations, etc............................................ 15
SECTION 4.7. Inspection of Reports.................................. 15
SECTION 4.8. List of Receipt Holders................................ 15
ARTICLE V
THE DEPOSITARY AND THE COMPANY.......................................... 15
SECTION 5.1. Maintenance of Offices, Agencies, Transfer Books by the
Depositary, the Registrar......................................... 15
SECTION 5.2. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents or the Company................ 16
SECTION 5.3. Obligations of the Depositary, the Depositary's
Agents, and the Company........................................... 16
SECTION 5.4. Resignation and Removal of the Depositary; Appointment
of Successor Depositary........................................... 18
SECTION 5.5. Corporate Notices and Reports.......................... 18
SECTION 5.6. Deposit of Preferred Stock by the Company.............. 19
SECTION 5.7. Indemnification by the Company......................... 19
SECTION 5.8. Fees, Charges and Expenses............................. 19
ARTICLE VI
AMENDMENT AND TERMINATION............................................... 20
SECTION 6.1. Amendment.............................................. 20
SECTION 6.2. Termination............................................ 20
ARTICLE VII
MISCELLANEOUS........................................................... 21
SECTION 7.1. Counterparts........................................... 21
SECTION 7.2. Exclusive Benefits of Parties.......................... 21
SECTION 7.3. Invalidity of Provisions............................... 22
SECTION 7.4. Notices................................................ 22
SECTION 7.5. Depositary's Agents.................................... 22
SECTION 7.6. Holders of Receipts Are Parties........................ 23
SECTION 7.7. Governing Law.......................................... 23
SECTION 7.8. Headings............................................... 23
<PAGE>
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of ________ __, 199_, among TELE-
COMMUNICATIONS, INC., a Delaware corporation, (the "Company"), ____________, as
Depositary (including any successor, the "Depositary"), and all holders from
time to time of Depositary Receipts executed and delivered hereunder.
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of up to ___________ shares of [title of
preferred stock] (the "Preferred Stock"), of the Company with the Depositary, as
agent for the beneficial owners of the Preferred Stock, for the purposes set
forth in this Deposit Agreement and for the execution and delivery hereunder of
the Receipts (as defined below) evidencing Depositary Shares (as defined below)
in respect of the Preferred Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form of the
Depositary Receipt annexed as Exhibit A, with appropriate insertions,
---------
modifications and omissions, as hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Agreement and the
Depositary Receipts:
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in The City of New York, New York or Hartford,
Connecticut are authorized or obligated by law or executive order to close.
"Certificate of Designations" shall mean the Certificate of
Designations, Preferences, Rights and Limitations of the [title of preferred
stock] par value $0.01 per share, as filed with the Secretary of State of the
State of Delaware, establishing and setting forth the designations, rights,
powers, qualifications, limitations and restrictions of the Preferred Stock.
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation, as amended from time to time, of the Company.
"Class A Common Stock" shall mean the Class A
Common Stock, par value $1.00 per
<PAGE>
-2-
share, of the Company.
"Company" shall mean Tele-Communications, Inc., a Delaware
corporation, and its successors.
"Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.
"Depositary" shall mean ____________________, as Depositary hereunder,
and any successor as Depositary hereunder.
"Depositary's Office" shall mean the office of the Depositary in the
city of _________, Connecticut, at which at any particular time its business in
respect of matters governed by this Deposit Agreement shall be administered,
which at the date of this Deposit Agreement is located at _______________,
________, ___________ _____.
"Depositary Share" shall mean an interest in _____________ of a share
of the Preferred Stock deposited with the Depositary hereunder, as evidenced by
the Receipts executed and delivered hereunder, and the same proportional
interest in any and all other property received by the Depositary in respect of
such share of Preferred Stock and held under this Deposit Agreement. Subject to
the terms of this Deposit Agreement, each owner of a Depositary Share is
entitled, proportionately, to all the rights, preferences and privileges of the
Preferred Stock represented by such Depositary Share, including the dividend,
voting and liquidation rights contained in the Certificate of Designations, and
to the benefits of all obligations of the Company under the Certificate of
Designations.
"Depositary's Agent" shall mean an agent appointed by the Depositary
as provided, and for the purposes specified, in Section 7.5.
"Preferred Stock" shall mean [title of preferred stock] par value
$0.01 per share, of the Company.
"Receipt" or "Depositary Receipt" shall mean a Depositary Receipt
executed and delivered hereunder to evidence one or more Depositary Shares,
whether in definitive or temporary form.
"Record holder" as applied to a Receipt shall mean the person in whose
name a Receipt is registered on the books maintained by the Depositary for such
purpose.
"Registrar" shall mean any bank or trust company appointed to register
Receipts as herein provided.
<PAGE>
-3-
"Securities Act" shall mean the Securities Act of 1933, as amended.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF PREFERRED STOCK,
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.1. Form and Transferability of Receipts. Definitive
------------------------------------
Receipts shall be engraved or printed or lithographed with steel-engraved
borders and shall be substantially in the form set forth in Exhibit A annexed to
---------
this Deposit Agreement, with appropriate insertions, modifications and
omissions, as hereinafter provided. Pending preparation of definitive Receipts,
the Depositary, upon the written order of the Company or any holder of Preferred
Stock, as the case may be, delivered for deposit in compliance with Section 2.2,
shall execute and deliver temporary Receipts which are printed, lithographed,
typewritten, mimeographed or otherwise substantially of the tenor of the
definitive Receipts in lieu of which they are executed and delivered and with
such appropriate insertions, omissions, substitutions and other variations as
the persons executing such Receipts may determine, as evidenced by their
execution of such Receipts. If temporary Receipts are executed and delivered,
the Company and the Depositary will cause definitive Receipts to be prepared
without unreasonable delay. After the preparation of definitive Receipts, the
temporary Receipts shall be exchangeable for definitive Receipts upon surrender
of the temporary Receipts at an office described in the second to last paragraph
of Section 2.2, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Receipts, the Depositary shall execute and deliver
in exchange therefor definitive Receipts representing the same number of
Depositary Shares as represented by the surrendered temporary Receipt or
Receipts. Such exchange shall be made at the Company's expense and without any
charge therefor. Until so exchanged, the temporary Receipts shall in all
respects be entitled to the same benefits under this Agreement, and with respect
to the Preferred Stock deposited hereunder, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature
of a duly authorized signatory of the Depositary; provided, however, that such
signature may be a facsimile if a Registrar (other than the Depositary) shall
have countersigned the Receipts by the manual signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under
this Deposit Agreement or be valid or obligatory for any purpose unless it shall
have been executed as provided in the preceding sentence. The Depositary shall
record on its books each Receipt executed as provided above and delivered as
hereinafter provided.
Except as the Depositary may otherwise determine, Receipts shall be in
denominations of any number of whole Depositary Shares. All receipts shall be
dated the date of their execution.
<PAGE>
-4-
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Preferred Stock or the Depositary Shares may
be listed to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular receipts are subject
by reason of the date of issuance of the Preferred Stock or otherwise.
Ownership of any Receipt (and of the Depositary Shares evidenced by
such Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer or endorsement, or other instrument satisfactory to the
Depositary, shall be transferable by delivery; provided, however, that until a
Receipt shall be transferred on the books of the Depositary as provided in
Section 2.4, the Depositary and the Company may, notwithstanding any notice to
the contrary, treat the record holder thereof at such time as the absolute owner
thereof for the purpose of determining the person entitled to distribution of
dividends or other distributions or to any notice provided for in this Deposit
Agreement and for all other purposes.
SECTION 2.2. Deposit of Preferred Stock, Execution and Delivery of
-----------------------------------------------------
Receipts in Respect Thereof. Subject to the terms and conditions of this
- ---------------------------
Deposit Agreement, the Company or any holder of Preferred Stock may deposit
shares of Preferred Stock under this Deposit Agreement by delivery to the
Depositary of a certificate or certificates for the shares of Preferred Stock to
be deposited, properly endorsed or accompanied by a properly executed instrument
of transfer or endorsement in form satisfactory to the Depositary, together with
(i) all such certifications as may be required by the Depositary in accordance
with the provisions of this Deposit Agreement and (ii) a written order directing
the Depositary to execute and deliver to or upon the written order of the person
or persons stated in such order a Receipt or Receipts for the number of
Depositary Shares representing such deposited Preferred Stock.
If required by the Depositary, Preferred Stock presented for deposit at any
time, whether or not the register of holders of Receipts is closed, shall also
be accompanied by an agreement or assignment, or other instrument satisfactory
to the Depositary, that will provide for the prompt transfer to the Depositary
or its nominee of any dividend or right to subscribe for additional Preferred
Stock or to receive other property that any person in whose name the Preferred
Stock is or has been registered may thereafter receive upon or in respect of
such deposited Preferred Stock, or in lieu thereof such agreement of indemnity
or other agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or certificates for
the shares of Preferred Stock to be deposited hereunder, together with the other
documents specified above, the Depositary shall, as soon as transfer and
registration can be accomplished, present such certificates to the registrar and
transfer agent of the Preferred Stock for transfer and registration in the name
of the Depositary or its nominee of the shares of Preferred Stock being
deposited.
<PAGE>
-5-
Deposited Preferred Stock shall be held by the Depositary in an account to be
established by the Depositary at the Depositary's Office.
Upon receipt by the Depositary of a certificate or certificates for
Preferred Stock to be deposited hereunder, together with the other documents
specified above, the Depositary, subject to the terms and conditions of this
Deposit Agreement, shall execute and deliver to or upon the order of the person
or persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.2 a Receipt or Receipts for the number of
whole Depositary Shares representing the Preferred Stock so deposited and
registered in such name or names as may be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office, except that, at the request, risk and expense of any person
requesting such delivery, such delivery may be made at such other place as may
be designated by such person. In each case, delivery will be made only upon
payment by such person to the Depositary of all taxes and other governmental
charges and any fees payable in connection with such deposit and the transfer of
the deposited Preferred Stock.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
SECTION 2.3. Redemption of Preferred Stock. Whenever the Company
-----------------------------
shall elect to redeem shares of Preferred Stock in accordance with the
Certificate of Designations it shall (unless otherwise agreed in writing with
the Depositary) give the Depositary in its capacity as Depositary notice of the
date of such proposed redemption of the Preferred Stock, which notice shall (i)
be given not less than ____ Business Days prior to the date the Depositary is to
mail notice of the redemption to the record holders of Receipts, in the case of
a redemption of all outstanding Depositary Shares, and not less than ____
calendar days prior to the date the Depositary is to mail notice of the
redemption to the record holders of Receipts evidencing the Depositary Shares to
be redeemed, in the case of a partial redemption of outstanding Depositary
Shares, and (ii) be accompanied by a certificate from the Company stating that
such redemption of the Preferred Stock is in accordance with the provisions of
the Certificate of Designations. Such notice shall be in addition to the notice
required for redemption pursuant to the Certificate of Designations. On the
date of any such redemption of Preferred Stock, provided that the Company shall
then have deposited with the Depositary the redemption price of the Preferred
Stock to be redeemed, plus an amount sufficient to pay any accrued and unpaid
dividends thereon, the Depositary shall redeem the number of Depositary Shares
representing such redeemed Preferred Stock. Subject to the penultimate sentence
of this Paragraph, the Depositary, at the expense of the Company, shall mail,
first class postage prepaid, notice of the redemption of Preferred Stock and the
proposed simultaneous redemption of the Depositary Shares representing the
Preferred Stock held by the Depositary to be redeemed, not less than __ and not
more than __ days prior to the date fixed for redemption of such Preferred Stock
and Depositary Shares (the "Redemption Date"), to the record holders of the
Receipts evidencing the
<PAGE>
-6-
Depositary Shares to be so redeemed, at the addresses of such holders as they
appear on the records of the Depositary; but neither failure to mail any such
notice to one or more such holders nor any defect in any notice to one or more
such holders shall affect the sufficiency of the proceedings for redemption as
to other holders. Each such notice shall state: (i) the Redemption Date; (ii)
the number of Depositary Shares to be redeemed and, if less than all the
Depositary Shares held by any such holder are to be redeemed, the number of such
Depositary Shares held by such holder to be so redeemed; (iii) the redemption
price, (iv) the place or places where Receipts evidencing Depositary Shares are
to be surrendered for payment of the redemption price and (v) that dividends in
respect of the shares of Preferred Stock represented by the Depositary Shares to
be redeemed will cease to accumulate from and after such Redemption Date. Any
such notices shall be mailed in the same manner as notices of redemption of the
Preferred Stock are required to be mailed pursuant to section __ of the
Certificate of Designations and published in the same manner as notices of
redemption of the Preferred Stock are required to be published pursuant to said
section, if so required. In case fewer than all the outstanding Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed shall be
selected by lot or pro rata (as nearly as may be) or by any other equitable
method determined by the Depositary to be consistent with the method determined
by the Board of Directors of the Company with respect to the Preferred Stock.
Notice having been mailed and published, at the expense of the
Company, by the Depositary as aforesaid, from and after the Redemption Date
(unless the Company shall have failed to redeem the shares of Preferred Stock to
be redeemed by it, as set forth in the Company's notice provided for in the
preceding paragraph), the Depositary Shares called for redemption shall be
deemed no longer to be outstanding and all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the redemption
price) shall, to the extent of such Depositary Shares, cease and terminate.
Upon surrender in accordance with said notice of the Receipts evidencing such
Depositary Shares (properly endorsed or assigned for transfer, if the Depositary
shall so require), such Depositary Shares shall be redeemed at a redemption
price per Depositary Share equal to one-______ of the redemption price paid for
a share of Preferred Stock pursuant to the Certificate of Designations. The
foregoing shall be subject further to the terms and conditions of the
Certificate of Designations.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the redemption price for the
Depositary Shares called for redemption, a new Receipt evidencing the Depositary
Shares evidenced by such prior Receipt and not called for redemption.
The Depositary shall not be required (a) to execute and deliver,
transfer or exchange any receipts for a period beginning at the opening of
business 15 days next preceding any selection of Depositary Shares and Preferred
Stock to be redeemed and ending at the close of business on the day of the
mailing of notice of redemption of Depositary Shares or (b) to
<PAGE>
-7-
transfer or exchange for another Receipt any Receipt evidencing Depositary
Shares called or being called for redemption in whole or in part, except as
provided in the third paragraph of this Section 2.3.
SECTION 2.4. Transfer of Receipts. Subject to the terms and
--------------------
conditions of this Deposit Agreement, the Depositary shall make transfers on its
books from time to time of Receipts upon any surrender thereof at the
Depositary's Office or such other office as the Depositary may designate for
such purpose, by the holder in person or by a duly authorized attorney, properly
endorsed or accompanied by a properly executed instrument of transfer or
endorsement, or other instrument satisfactory to the Depositary, together with
evidence of the payment of any transfer taxes as may be required by law. Upon
such surrender, the Depositary shall execute a new Receipt or Receipts and
deliver the same to or upon the order of the person or persons entitled thereto
evidencing the same aggregate number of Depositary Shares evidenced by the
Receipt or Receipts surrendered.
SECTION 2.5. Combination and Split-ups of Receipts. Upon surrender
-------------------------------------
of a Receipt or Receipts at the Depositary's Office or such other office as the
Depositary may designate for the purposes of effecting a split-up or combination
of Receipts, subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denominations requested evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered; provided, however, that
the Depositary shall not execute and deliver any Receipt evidencing a fractional
Depositary Share.
[SECTION 2.6. Surrender of Receipts and Withdrawal of Preferred
-------------------------------------------------
Stock. Any holder of a Receipt or Receipts may withdraw any or all of the
Preferred Stock (but only in whole shares of Preferred Stock) represented by the
Depositary Shares evidenced by such Receipts and all money and other property,
if any, represented by such Depositary Shares by surrendering such Receipt or
Receipts, properly endorsed or accompanied by a properly executed instrument of
transfer or endorsement, or other instrument satisfactory to the Depositary, at
the Depositary's Office or such other office as the Depositary may designate for
such withdrawals. After such surrender, without unreasonable delay, the
Depositary shall deliver to such holder, or to the person or persons designated
by such holder as hereinafter provided, the whole number of shares of Preferred
Stock and other property, if any, represented by the Depositary Shares evidenced
by the Receipt or Receipts so surrendered for withdrawal. If the Receipt or
Receipts delivered by the holder to the Depositary in connection with such
withdrawal shall evidence a number of Depositary Shares in excess of the number
of whole Depositary Shares representing the whole number of shares of Preferred
Stock to be withdrawn, the Depositary shall at the same time, in addition to
such whole number of shares of Preferred Stock and such money and other
property, if any, to be withdrawn, deliver to such holder, or (subject to
Section 2.4) upon his order, a new Receipt or Receipts evidencing such excess
number of whole Depositary Shares. Delivery of the Preferred Stock and such
money and other property being withdrawn may be
<PAGE>
-8-
made by the delivery of such certificates, documents of title, and other
instruments as the Depositary may deem appropriate, which, if required by the
Depositary, shall be properly endorsed or accompanied by proper instruments of
transfer.
If the Preferred Stock and the money and other property being
withdrawn are to be delivered to a person or persons other than the record
holder of the Receipt or Receipts being surrendered for withdrawal of Preferred
Stock, such holder shall execute and deliver to the Depositary a written order
so directing the Depositary and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such shares of Preferred
Stock be properly endorsed in blank or accompanied by a properly executed
instrument of transfer or endorsement in blank.
The Depositary shall deliver the Preferred Stock and the money and
other property, if any, represented by the Depositary Shares evidenced by
Receipts surrendered for withdrawal at the Depositary's Office, except that, at
the request, risk and expense of the holder surrendering such Receipt or
Receipts and for the account of the holder thereof, such delivery may be made at
such other place as may be designated by such holder.]
SECTION 2.7. Limitations on Execution and Delivery, Transfer, Split-
------------------------------------------------------
up, Combination, Surrender and Exchange of Receipts. As a condition precedent
- ----------------------------------------------------
to the execution and delivery, transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, the Depositary's Agent or the Company
may require any or all of the following: (i) payment to it of a sum sufficient
for the payment (or, in the event that the Depositary or the Company shall have
made such payment, the reimbursement to it) of any tax or earlier governmental
charge with respect thereto (including any such tax or charge with respect to
the Preferred Stock being deposited or withdrawn or with respect to [the Class A
Common Stock or] other securities or property of the Company being issued upon
[conversion or] redemption); (ii) the production of proof satisfactory to it as
to the identity and genuineness of any signature; and (iii) compliance with such
regulations, if any, as the Depositary or the Company may establish not
inconsistent with the provisions of the Deposit Agreement.
The deposit of Preferred Stock may be refused, the delivery of
Receipts against Preferred Stock may be suspended, the transfer of Receipts may
be refused, and the transfer, split-up, combination, surrender or exchange of
outstanding Receipts may be suspended (i) during any period when the register of
holders of Receipts is closed, (ii) if any such action is deemed necessary or
advisable by the Depositary, any of the Depositary's Agents or the Company at
any time or from time to time because of any requirement of law or of any
government or governmental body or commission, or under any provision of this
Deposit Agreement, or (iii) except for the transfer of Receipts, with the
approval of the Company, for any other reason.
SECTION 2.8. Lost Receipts, etc. In case any Receipt shall be
------------------
mutilated
<PAGE>
-9-
or destroyed or lost or stolen, the Depositary in its discretion may execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such destroyed, lost or
stolen Receipt; provided, however, that the holder thereof provides the
Depositary with (i) evidence satisfactory to the Depositary of such destruction,
loss or theft of such Receipt, of the authenticity thereof and of his ownership
thereof, (ii) reasonable indemnification satisfactory to the Depositary and
(iii) payment of any expense (including fees, charges and expenses of the
Depositary) in connection with such execution and delivery.
SECTION 2.9. Cancellation and Destruction of Surrendered Receipts.
----------------------------------------------------
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.
SECTION 2.10. Conversion of Preferred Stock into Class A Common
-------------------------------------------------
Stock. Receipts may be surrendered with written instructions to the Depositary
- -----
to instruct the Company to cause the conversion of any specified number of
shares, or fractions of shares, of Preferred Stock represented by whole
Depositary Shares evidenced by such Receipts into whole shares of Class A Common
Stock and cash for any fractional share of Class A Common Stock at the
conversion price then in effect for the Preferred Stock pursuant to the
Certificate of Designations as such conversion price may be adjusted by the
Company from time to time as provided in the Certificate of Designations.
Subject to the terms and conditions of this Deposit Agreement and the
Certificate of Designations, a holder of a Receipt or Receipts evidencing
Depositary Shares representing whole or fractional shares of Preferred Stock may
surrender such Receipt or Receipts at the Depositary's Office or at such office
or to such Depositary's Agent, as the Depositary may designate for such purpose,
together with a notice of conversion duly completed and executed, thereby
directing the Depositary to instruct the Company to cause the conversion of the
number of shares, or fractions of shares, of underlying Preferred Stock
specified in such notice of conversion into shares of Class A Common Stock, and
an assignment of such Receipt or Receipts to the Company or in blank, duly
completed and executed. To the extent that a holder delivers to the Depositary
for conversion a Receipt or Receipts which in the aggregate are convertible into
less than one whole share of Class A Common Stock, the holder shall receive
payment in cash in lieu of such fractional share of Class A Common Stock
otherwise issuable, if more than one Receipt shall be delivered for conversion
at one time by the same holder, the number of whole shares of Class A Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of Depositary Shares represented by the Receipts so delivered.
Upon receipt by the Depositary of a Receipt or Receipts, together with
notice of conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of shares of
Preferred Stock, and an assignment of such Receipt or Receipts to the Company or
in blank, duly completed and executed, the
<PAGE>
-10-
Depositary shall instruct the Company (i) to cause the conversion of the number
of shares, or fractions of shares, of Preferred Stock represented by the
Depositary Shares evidenced by the Receipts so surrendered for conversion as
specified in the written notice to the Depositary and (ii) to cause the delivery
to the holders of such Receipts of a certificate or certificates evidencing the
number of whole shares of Class A Common Stock and the amount of money, if any,
to be delivered to the holders of Receipts surrendered for conversion in lieu of
fractional shares of Class A Common Stock otherwise issuable. The Company shall
as promptly as practicable after receipt thereof cause the delivery of (i) a
certificate or certificates evidencing the number of whole shares of Class A
Common Stock into which the Preferred Stock represented by the Depositary Shares
evidenced by such Receipt or Receipts has been converted, and (ii) any money or
other property to which the holder is entitled by reason of such conversion.
Upon such conversion, the Depositary (i) shall deliver to the holder a Receipt
evidencing the number of Depositary Shares, if any, that equals that excess of
the number of Depositary Shares evidenced by the surrendered Receipt over the
number of Depositary Shares evidenced by such Receipt that has been so
converted, (ii) shall cancel the Depositary Shares evidenced by Receipts
surrendered for conversion and (iii) shall deliver to the Company or its
transfer agent for the Preferred Stock for cancellation the shares of Preferred
Stock represented by the Depositary Shares evidenced by the Receipts so
surrendered and so converted. Upon the delivery of the shares of Preferred Stock
to be cancelled due to such conversion by the Depositary to the Company, the
Company shall deliver to the Depositary a certificate or certificates evidencing
the number of shares, or fractions of shares, of Preferred Stock, if any, that
equals the excess of the number of shares of Preferred Stock evidenced by the
surrendered certificate over the number of shares of Preferred Stock evidenced
by that certificate that has been so converted.
If Preferred Stock shall be called by the Company for redemption, the
Depositary Shares representing such Stock may be converted into Class A Common
Stock as provided in this Deposit Agreement until, but not after, the close of
business on the Redemption Date unless the Company shall fail to deposit with
the Depositary the amounts required to redeem the Preferred Stock held by the
Depositary, in which case the Depositary Shares representing such Preferred
Stock may continue to be converted into Class A Common Stock until, but not
after, the close of business on the date on which the Company deposits with the
Depositary such amounts as are required by the Certificate of Designations to
make full payment of the amounts payable upon such redemption. Upon receipt by
the Depositary of a Receipt or Receipts, together with a properly completed and
executed notice of conversion, representing any Preferred Stock called for
redemption, the shares of Preferred Stock held by the Depositary represented by
such Depositary Shares for which conversion is requested shall be deemed to have
been received by the Company for conversion as of immediately prior to the close
of business on the date of such receipt by the Depositary.
Upon the conversion of any share of Preferred Stock for which a
request for conversion has been made by the holder of Depositary Shares
representing such share, all dividends in respect of such Depositary Shares
shall cease to accrue, such Depositary Shares
<PAGE>
-11-
shall be deemed no longer outstanding, all rights of the holder of the Receipt
with respect to such Depositary Shares (except the right to receive the Class A
Common Stock, any cash payable with respect to any fractional shares of Class A
Common Stock as provided herein and any cash payable on account of accrued
dividends as provided herein and any Receipts evidencing Depositary Shares not
so converted) shall terminate, and the Receipt evidencing such Depositary Shares
shall be cancelled in accordance with Section 2.9 hereof.
No fractional shares of Class A Common Stock shall be issuable upon
conversion of Preferred Stock underlying the Depositary Shares. If any holder
of Receipts surrendered with instructions to the Depositary for conversion of
the underlying Preferred Stock would be entitled to a fractional share of Class
A Common Stock upon such conversion, the Company shall cause to be delivered to
such holder an amount in cash for such fractional share as provided in the
Certificate of Designations.]
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.1. Filing Proofs, Certificates and Other Information. Any
-------------------------------------------------
person presenting Preferred Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other information,
to execute such certificates and to make such representations and warranties as
the Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company, as the case may be, may withhold or delay the
delivery of any Receipt, the transfer, redemption, conversion, or exchange of
any Receipt, the withdrawal of the Preferred Stock or money or other property,
if any, represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
SECTION 3.2. Payment of Taxes or Other Governmental Charges. If any
----------------------------------------------
tax or other governmental charge shall become payable by or on behalf of the
Depositary with respect to any Receipt, the Depositary Shares evidenced by such
Receipt, the Preferred Stock (or fractional interest therein) represented by
such Depositary Shares or any transaction referred to in Section 4.6, such tax
(including transfer, issuance or acquisition taxes, if any) or governmental
charge shall be payable by the holder of such Receipt. Until such payment is
made, transfer, redemption, conversion, or exchange of any Receipt or any
withdrawal of the Preferred Stock or money or other property, if any,
represented by the Depositary Shares evidenced by such Receipt may be refused,
any dividend or other distribution with respect to such Receipt or the Preferred
Stock represented by the Depositary Shares evidenced by such receipt may be
withheld and any part or all of the Preferred Stock or other property
represented
<PAGE>
-12-
by the Depositary Shares evidenced by such Receipt may be sold for the account
of the holder thereof (after attempting by reasonable means to notify such
holder prior to such sale). Any dividend or other distribution so withheld and
the proceeds of any such sale may be applied to any payment of such tax or other
governmental charge, the holder of such Receipt remaining liable for any
deficiency. The Depositary shall act as the withholding agent for any payments,
distributions, and exchanges made with respect to the Depositary Shares and
Receipts, and the Preferred Stock[, Class A Common Stock] or other securities or
assets represented thereby (collectively, the "Securities"). The Depositary
shall be responsible with respect to the Securities for the timely (i)
collection and deposit of any required withholding or backup withholding tax,
and (ii) filing of any information returns or other documents with federal (and
other applicable) taxing authorities. In the event the Depositary is required to
pay any such amounts, the Company shall reimburse the Depositary for payment
thereof upon the request of the Depositary and the Depositary shall, upon the
Company's request and as instructed by the Company, pursue its rights against
such holder at the Company's expense.
SECTION 3.3. Representations and Warranties as to Preferred Stock.
----------------------------------------------------
Each person depositing Preferred Stock under this Deposit Agreement shall be
deemed thereby to represent and warrant that such Preferred Stock and each
certificate therefor are valid and that the person making such deposit is duly
authorized to do so. Such representations and warranties shall survive the
deposit of the Preferred Stock and the execution and delivery of Receipts.
ARTICLE IV
THE PREFERRED STOCK, NOTICES
SECTION 4.1. Cash Distributions. Whenever the Depositary shall
------------------
receive any cash dividend or other cash distribution on the Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such portions of such
sum as are, as nearly as practicable, proportionate to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders; provided,
however, that in case the Company or the Depositary shall be required to
withhold from any cash dividend or other cash distribution in respect of the
Preferred Stock an amount on account of taxes or as otherwise required by law,
regulation or court order, the amount made available for distribution or
distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to record holders of Receipts then
outstanding.
<PAGE>
-13-
SECTION 4.2. Distributions Other Than Cash. Whenever the Depositary
-----------------------------
shall receive any distribution other than cash on the Preferred Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such portions of the
securities or property received by it as are, as nearly as practicable,
proportionate to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders, in any manner that the Depositary and the Company
may deem equitable and practicable for accomplishing such distribution. If, in
the opinion of the Company after consultation with the Depositary, such
distribution cannot be made proportionately among such record holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes or as otherwise required by law,
regulation or court order) the Depositary deems, after consultation with the
Company, such distribution not to be feasible, the Depositary may, with the
approval of the Company and subject to applicable provisions of law, adopt such
method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Section 3.2, be distributed or made available for distribution, as
the case may be, by the Depositary to record holders of Receipts as provided by
Section 4.1 in the case of a distribution received in cash.
SECTION 4.3. Subscription Rights, Preferences or Privileges. If the
----------------------------------------------
Company shall at any time offer or cause to be offered to the persons in whose
names Preferred Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts if the Company so directs in such manner as the
Company shall instruct (including by the execution and delivery to such record
holders of warrants representing such rights, preferences or privileges);
provided, however, that (a) if at the time of issue or offer of any such rights,
preferences or privileges the Company determines that it is not lawful or
feasible to make such rights, preferences or privileges available to some or all
holders of Receipts (by the execution and delivery of warrants or otherwise) or
(b) if and to the extent instructed by holders of Receipts who do not desire to
exercise such rights, preferences or privileges, the Depositary shall then, if
so instructed by the Company, and if applicable laws and the terms of such
rights, preferences or privileges so permit, sell such rights, preferences or
privileges of such holders at public or private sale, at such place or places
and upon such terms as it may deem proper, the net proceeds of any such sale
shall, subject to Section 3.2, be distributed by the Depositary to the record
holders of Receipts entitled thereto in accordance with the withholding and
fractional amount provisions of Section 4.1.
If registration under the Securities Act of the securities to which
any rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold such securities, the Company shall promptly file
a registration statement pursuant to the Securities Act with respect to such
securities and use its best efforts and take all steps available
<PAGE>
-14-
to it to cause such registration statement to become effective sufficiently in
advance of the expiration of such rights, preferences or privileges to enable
such holders to exercise such rights, preferences or privileges. In no event
shall the Depositary make available to the holders of Receipts any right,
preference or privilege to subscribe for or to purchase any securities unless
and until notified by the Company in writing that such registration statement
has become effective or that the offering and sale of such securities to such
holders are exempt from registration under the provisions of the Securities Act.
If any other action under the law of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Company agrees with the Depositary that the Company will use
its best efforts to take such action or obtain such authorization, consent or
permit sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.4. Notice of Dividends; Fixing of Record Date for Holders
------------------------------------------------------
of Receipts. Whenever any cash dividend or other cash distribution shall become
- -----------
payable, or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
Preferred Stock, or whenever the Depositary shall receive notice of (i) any
meeting at which holders of Preferred Stock are entitled to vote or of which
holders of Preferred Stock are entitled to notice or (ii) any election on the
part of the Company to call for redemption any shares of Preferred Stock, the
Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the Preferred
Stock) for the determination of the holders of Receipts (i) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or to give instructions for
the exercise of voting rights at any such meeting or to receive notice of such
meeting or (ii) whose Depositary Shares are to be so redeemed.
SECTION 4.5. Voting Rights. Upon issuance of notice of any meeting
-------------
at which the holders of Preferred Stock are entitled to vote, the Company shall
direct the Depositary, as soon as practicable thereafter, to mail to the record
holders of Receipts a notice, which shall be provided by the Company and which
shall contain (i) such information as is contained in such notice of meeting
(and, if applicable, such information as is provided together with such notice
of meeting), (ii) a statement that the holders of Receipts at the close of
business on a specified record date fixed pursuant to Section 4.4 will be
entitled, subject to any applicable provision of law, the Certificate of
Incorporation or the Certificate of Designations, to instruct the Depositary as
to the exercise of the voting rights pertaining to the amount of Preferred Stock
represented by their respective Depositary Shares and (iii) a brief statement as
to the manner in which such instructions may be given. Upon the written request
of a holder of a Receipt on such record date, the Depositary shall endeavor
insofar as practicable to vote or cause to be
<PAGE>
-15-
voted the amount of Preferred Stock represented by the Depositary Shares
evidenced by such Receipt in accordance with the instructions set forth in such
request. The Company hereby agrees to take all reasonable action that may be
deemed necessary by the Depositary in order to enable the Depositary to vote
such Preferred Stock or cause such Preferred Stock to be voted. In the absence
of specific instructions from the holder of a Receipt, the Depositary will
abstain from voting to the extent of the Preferred Stock represented by the
Depositary Shares evidenced by such Receipt. After aggregating all voting
Depositary Shares, the Depositary will disregard for voting purposes any
fractional share of Preferred Stock remaining.
SECTION 4.6. Changes Affecting Preferred Stock and Reclassifications,
--------------------------------------------------------
Recapitalizations, etc. Upon any split-up, consolidation or any other
- ----------------------
reclassification of Preferred Stock, or upon any recapitalization,
reorganization, merger, amalgamation or consolidation affecting the Company or
to which it is a party or sale of all or substantially all of the Company's
assets, the Depositary shall, upon the instructions of the Company, treat any
shares of stock or other securities or property (including cash) that shall be
received by the Depositary in exchange for or upon conversion of or in respect
of the Preferred Stock as new deposited property under this Deposit Agreement,
and Receipts then outstanding shall thenceforth represent the proportionate
interests of holders thereof in the new deposited shares of stock, other
securities or other property so received in exchange for or upon conversion or
in respect of such Preferred Stock. In any such case the Depositary may, in its
discretion, with the approval of the Company, execute and deliver additional
Receipts, or may call for the surrender of all outstanding Receipts to be
exchanged for new Receipts specifically describing such new deposited shares,
other securities or other property.
SECTION 4.7. Inspection of Reports. The Depositary shall make
---------------------
available for inspection by holders of Receipts at the Depositary's Office and
at such other places as it may from time to time deem advisable during normal
business hours any reports and communications received from the Company that are
both received by the Depositary as the holder of Preferred Stock and made
generally available to the holders of Preferred Stock by the Company.
SECTION 4.8. List of Receipt Holders. Promptly upon request from
-----------------------
time to time by the Company and at the Company's expense, the Depositary shall
furnish to it a list, as of a recent date, of the names, addresses and holdings
of Depositary Shares of all persons in whose names Receipts are registered on
the books of the Depositary.
<PAGE>
-16-
ARTICLE V
THE DEPOSITARY AND THE COMPANY
SECTION 5.1. Maintenance of Offices, Agencies, Transfer Books by the
-------------------------------------------------------
Depositary, the Registrar. Upon execution of this Deposit Agreement in
- -------------------------
accordance with its terms, the Depositary shall maintain (i) at the Depositary's
Office, facilities for the execution and delivery, transfer, surrender and
exchange, split-up and combination of Receipts and deposit and withdrawal of
Preferred Stock and (ii) at the offices of the Depositary's Agents, if any,
facilities for the delivery, transfer, surrender and exchange, split-up,
combination and redemption of Receipts and deposit and withdrawal of Preferred
Stock, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and transfer of Receipts, which books during normal business hours
shall be open for inspection by the record holders of Receipts, as provided by
applicable law, and by the Company. The Depositary shall consult with the
Company upon receipt of any request for inspection. The Depositary may close
such books, at any time or from time to time, when deemed expedient by it in
connection with the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the
Preferred Stock represented by such Depositary Shares shall be listed on the
Nasdaq National Market, the Depositary may, with the approval of the Company,
appoint a Registrar for registry of such Receipts or Depositary Shares in
accordance with the requirements of the Nasdaq National Market. Such Registrar
(which may be the Depositary if so permitted by the requirements of the Nasdaq
National Market) may be removed and a substitute registrar appointed by the
Depositary upon the request or with the approval of the Company. If the
Receipts, such Depositary Shares or such Preferred Stock are listed on one or
more other stock exchanges, the Company will, with the assistance or the
Depositary, arrange such facilities for the delivery, transfer, surrender and
exchange of such Receipts, such Depositary Shares or Preferred Stock as may be
required by law or applicable stock exchange regulations.
SECTION 5.2. Prevention of or Delay in Performance by the Depositary,
--------------------------------------------------------
the Depositary's Agents or the Company. Neither the Depositary nor any
- --------------------------------------
Depositary's Agent nor the Company shall incur any liability to any holder of
any Receipt if, by reason of any provision of any present or future law or
regulation thereunder of the United States of America or of any other
governmental authority or, in the case of the Depositary or any Depositary's
Agent, by reason of any provision, present or future, of the Certificate of
Incorporation or the Certificate of Designations or, in the case of the Company,
the Depositary or any Depositary's Agent, by reason of any act of God or war or
other circumstance beyond the control of the relevant party, the Depositary, any
Depositary's Agent or the Company shall be prevented or forbidden from doing or
performing any act or thing that the terms of this Deposit Agreement provide
shall be
<PAGE>
-17-
done or performed; nor shall the Depositary, any Depositary's Agent or the
Company incur any liability to any holder of a Receipt by reason of any
nonperformance or delay, caused as aforesaid, in the performance of any act or
thing that the terms of this Deposit Agreement provide shall or may be done or
performed or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement.
SECTION 5.3. Obligations of the Depositary, the Depositary's Agents,
-------------------------------------------------------
and the Company. Neither the Depositary nor any Depositary's Agent nor the
- ---------------
Company assumes any obligation or shall be subject to any liability under this
Deposit Agreement or any Receipt to holders of Receipts other than that each of
them agrees to use good faith in the performance of such duties as are
specifically set forth in this Deposit Agreement.
Neither the Depositary nor any Depositary's Agent nor the Company
shall be under any obligation to appear in, prosecute or defend any action, suit
or other proceeding with respect to the Preferred Stock, Depositary Shares,
Receipts [or Class A Common Stock] that in its opinion may involve it in expense
or liability, unless indemnity satisfactory to it against all expense and
liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Company
shall be liable for any action or any failure to act by it in reliance upon the
advice of, or information from, legal counsel, accountants, any person
presenting Preferred Stock for deposit, any holder of a Receipt or any other
person believed by it in good faith to be competent to give such advice or
information. The Depositary, any Depositary's Agent and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
The Depositary, its parent, affiliates, subsidiaries, officers,
directors or employees and any Depositary's Agent may own, buy, sell or deal in
any class of securities of the Company and its affiliates and Receipts or
Depositary Shares, or become pecuniarily interested in any transaction in which
the Company or its officers may be interested, or contract with or lend money to
the Company or any of its affiliates or officers, or otherwise act fully or as
freely as if it were not the Depositary or the Depositary's Agent hereunder.
The Depositary may also act as transfer agent or registrar of any of the
securities of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent
shall be deemed to be an "issuer" of securities under the federal securities
laws or applicable state securities laws, it being expressly understood and
agreed that the Depositary and any Depositary's Agent are acting only in a
ministerial capacity as Depositary for the Preferred Stock; provided, however,
that the Depositary agrees to comply with all information reporting and
withholding requirements applicable to it under law or this Deposit Agreement in
its capacity as Depositary.
<PAGE>
-18-
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Preferred Stock at any time deposited with the Depositary
hereunder or of the Depositary Shares, as to the validity or sufficiency of this
Deposit Agreement, as to the value of the Depositary Shares, or as to any right,
title or interest of the record holders of Receipts in and to the Depositary
Shares, except that the Depositary hereby represents and warrants as follows:
(i) the Depositary has been duly organized and is validly existing and in good
standing under the laws of the United States with full power, authority and
legal right under such laws to execute, deliver and carry out the terms of this
Deposit Agreement; (ii) this Deposit Agreement has been duly authorized,
executed and delivered by the Depositary; and (iii) this Deposit Agreement
constitutes a valid and binding obligation of the Depositary, enforceable
against the Depositary in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). The
Depositary shall not be accountable for the use or application by the Company of
the Depositary Shares or the Receipts or the proceeds of the sale thereof.
SECTION 5.4. Resignation and Removal of the Depositary; Appointment
------------------------------------------------------
of Successor Depositary. The Depositary may at any time resign as Depositary
- -----------------------
hereunder by notice of its election to do so delivered to the Company, such
resignation to take effect upon the appointment of a successor depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 45 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company having its principal office in the United States of America and having a
combined capital and surplus of at least $50,000,000. If a successor depositary
shall not have been appointed in 45 days, the resigning Depositary may petition
a court of competent jurisdiction to appoint a successor depositary. Every
successor depositary shall execute and deliver to its predecessor and to the
Company an instrument in writing accepting its appointment hereunder, and
thereupon such successor depositary, without any further act or deed, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor and for all purposes shall be the Depositary under this Deposit
Agreement, and such
<PAGE>
-19-
predecessor, upon payment of all sums due it and on the written request of the
Company, shall promptly execute and deliver an instrument transferring to such
successor all rights and powers of such predecessor hereunder, shall duly
assign, transfer and deliver all rights, title and interest in the Preferred
Stock and any moneys or property held hereunder to such successor and shall
deliver to such successor a list of the record holders of all outstanding
Receipts and such other records respecting the Receipts, the Depositary Shares
and the Preferred Stock as the successor shall require in order to perform its
duties. Any successor depositary shall promptly mail notice of its appointment
to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted, or to which the Depositary transfers all or
substantially all of its corporate trust business, shall be the successor of
such Depositary without the execution or filing of any document or any further
act. Such successor depositary may execute the Receipts either in the name of
the predecessor depositary or in the name of the successor depositary.
SECTION 5.5. Corporate Notices and Reports. The Company agrees that
-----------------------------
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, and as directed by the Company transmit to the record holders
of Receipts, in each case at the most recent address recorded in the
Depositary's books, copies of all notices and reports (including financial
statements) required by law, by the rules of any national securities exchange or
national market system upon which the Preferred Stock, the Depositary Shares or
the Receipts are listed, or by the Certificate of Incorporation and the
Certificate of Designations to be furnished by the Company to holders of
Preferred Stock. Such transmission will be at the Company's expense and the
Company will provide the Depositary with such number of copies of such documents
as the Depositary may reasonably request. In addition, the Depositary will
transmit to the record holders of Receipts at the Company's expense such other
documents as may be requested by the Company.
SECTION 5.6. Deposit of Preferred Stock by the Company. Neither the
-----------------------------------------
Company nor any company controlled by the Company will at any time deposit any
Preferred Stock if such Preferred Stock is required to be registered under the
provisions of the Securities Act and no registration statement is at such time
in effect as to such Preferred Stock.
SECTION 5.7. Indemnification by the Company. The Company shall
------------------------------
indemnify Depositary, any Depositary's Agent and any Registrar for, and hold
each of them harmless against, any loss, liability or expense (including
reasonable attorneys' fees) incurred without gross negligence or intentional
misconduct on the part of any such person, arising out of or in connection with
this Deposit Agreement and the Receipts, including the costs and expenses of any
of its duties under this Deposit Agreement or the Receipts. Anything in this
Agreement to the contrary notwithstanding, in no event shall Depositary, any
Depositary's Agent or Registrar be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits) even if Depositary, any Depositary's Agent
<PAGE>
-20-
or Registrar has been advised of the likelihood of such loss or damage and
regardless of the form of the action. The obligations of the Company to
Depositary, any Depositary's Agent or Registrar shall survive the termination of
this Agreement.
SECTION 5.8. Fees, Charges and Expenses. No fees, charges and
--------------------------
expenses of the Depositary or any Depositary's Agent hereunder or of any
Registrar shall be payable by any person other than the Company, except for any
taxes and other governmental charges and except as provided in this Deposit
Agreement. If the Depositary incurs fees, charges or expenses for which it is
not otherwise liable hereunder at the election of a holder of a Receipt or other
person, such holder or other person will be liable for such fees, charges and
expenses. All other fees, charges and expenses of the Depositary and any
Depositary's Agent hereunder and of any Registrar (including, in each case,
reasonable fees and expenses of counsel) incident to the performance of their
respective obligations hereunder will be paid from time to time upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such fees, charges and expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1. Amendment. The form of the Receipts and any provisions
---------
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable. Any amendment that shall impose any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses provided for herein or in the Receipts), or
that shall otherwise prejudice any substantial existing right of holders of
Receipts, shall not become effective as to outstanding Receipts until the
expiration of 90 days after notice of such amendment shall have been given to
the record holders of outstanding Receipts. Every holder of an outstanding
Receipt at the time any such amendment becomes effective shall be deemed, by
continuing to hold such Receipt, to consent and agree to such amendment and to
be bound by this Deposit Agreement as amended thereby. In no event shall any
amendment impair the right, subject to the provisions of Sections 2.3, 2.6, 2.7
and 2.10 and Article III, of any owner of any Depositary Shares to surrender the
Receipt evidencing such Depositary Shares with instructions to the Depositary to
deliver to the holder the Preferred Stock and all money and other property, if
any, represented thereby, or to cause the conversion of the underlying Preferred
Stock into Class A Common Stock and cash for any fractional share amount, except
in order to comply with mandatory provisions of applicable law. The Depositary
shall sign any amendment authorized pursuant to this Section 6.1 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Depositary. If it does, the Depositary may but need not sign
it. In signing such amendment the Depositary shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and shall be fully
protected in
<PAGE>
-21-
relying upon, an opinion of counsel stating that such amendment is permitted by
this Agreement, that all conditions precedent, if any, provided for in this
Agreement relating to the proposed amendment have been complied with, and that
such amendment complies with all applicable laws.
SECTION 6.2. Termination. Whenever so directed by the Company upon
-----------
at least five Business Days' prior notice, the Depositary will terminate this
Deposit Agreement, provided, that notice of such termination has been given by
mailing notice of such termination to the record holders of all Receipts then
outstanding at least 30 days prior to the date fixed in such notice for such
termination. The Depositary may likewise terminate this Deposit Agreement if at
any time 45 days shall have expired after the Depositary shall have delivered to
the Company a written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its appointment as
provided in Section 5.4.
If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Depositary thereafter shall discontinue the
transfer of Receipts, shall suspend the distribution of dividends to the holders
thereof and shall not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement,
except as hereinafter provided in this paragraph and except that the Depositary
shall continue to collect dividends and other distributions pertaining to
Preferred Stock and shall continue to deliver the Preferred Stock and any money
and other property represented by Receipts, without liability for interest
thereon, upon surrender thereof by the holders thereof. At any time after the
expiration of two years from the date of termination, the Depositary may,
subject to applicable provisions of law, sell Preferred Stock then held
hereunder at public or private sale, at such place or places and upon such terms
as it deems proper and may thereafter hold the net proceeds of any such sale,
together with any money and other property held by it hereunder, without
liability for interest, for the benefit, pro rata in accordance with their
holdings, of the holders of Receipts that have not theretofore been surrendered.
After making such sale, the Depositary shall be discharged from all obligations
under this Deposit Agreement except to account for such net proceeds and money
and other property. Upon the termination of this Deposit Agreement, the Company
shall be discharged from all obligations under this Deposit Agreement except for
its obligations to the Depositary, any Depositary Agent and any Registrar under
Sections 5.7 and 5.8. In the event this Deposit Agreement is terminated and a
sufficient number of shares of Preferred Stock remain outstanding, the Company
hereby agrees to use its best efforts to cause the shares of Preferred Stock to
be split ___ to 1 (so that each Depositary Share then represents one share of
Preferred Stock) and to have the Preferred Stock included for quotation on the
Nasdaq National Market (unless the holders of a majority of the outstanding
shares of Preferred Stock shall consent to the Company not effecting such
listing).
<PAGE>
-22-
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Counterparts. This Deposit Agreement may be executed by
------------
the Company and the Depositary in separate counterparts, each of which
counterpart, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and each Depositary's Agent, if
any, and shall be open to inspection during business hours at the Depositary's
Office and the respective offices of the Depositary's Agents, if any, by any
holder of a Receipt.
SECTION 7.2. Exclusive Benefits of Parties. This Deposit Agreement
-----------------------------
is for the exclusive benefit of the parties hereto, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
SECTION 7.3. Invalidity of Provisions. In case any one or more of
------------------------
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal, or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4. Notices. Any notices to be given to the Company
-------
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by first class mail, postage
prepaid or by facsimile transmission confirmed by letter, addressed to the
Company at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000,
Attention: General Counsel, or at any other place to which the Company may have
transferred its principal executive office.
Any notices to be given to the Depositary hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by first class mail, postage prepaid, or by
telegram or telex or telecopier confirmed by letter, addressed to the Depositary
at the Depositary's Office.
Any notices given to any record holder of a Receipt hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by first class mail, postage prepaid, or by
telegram or telex or telecopier confirmed by letter, addressed to such record
holder at the most recent address of such record holder as it appears on the
books of the Depositary or, if such holder shall have timely filed with the
<PAGE>
-23-
Depositary a written request that notices intended for such holder be mailed to
some other address, at the address designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or
telecopier, shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a duly addressed letter confirming an earlier
notice in the case of a facsimile transmission, telegram or telex) is deposited,
postage prepaid, in a post office letter box. The Depositary or the Company
may, however, act upon any facsimile transmission received by it from the other
or from any holder of a Receipt, notwithstanding that such facsimile
transmission shall not subsequently be confirmed by letter as aforesaid.
Delivery of a notice delivered personally shall be deemed to be effected on the
date of delivery (or the date delivery is refused by the addressee upon
presentation).
SECTION 7.5. Depositary's Agents. The Depositary may from time to
-------------------
time appoint Depositary's Agents to act in any respect for the Depositary for
the purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such Depositary's
Agents. The Depositary will promptly notify the Company of any such action.
SECTION 7.6. Holders of Receipts Are Parties. Notwithstanding that
-------------------------------
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions hereof and of the Receipts by acceptance of delivery of
Receipts.
SECTION 7.7. Governing Law. This Deposit Agreement and the Receipts
-------------
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the law of the State of New
York without giving effect to principles of conflict of laws.
SECTION 7.8. Headings. The headings of articles and sections in this
--------
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or the Receipts or to have any bearing upon the meaning
or interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, Tele-Communications, Inc. and _______________ have
duly executed this agreement as of the day and year first above set forth and
all holders of Receipts shall become parties hereto by and upon acceptance by
them of delivery of Receipts executed and delivered in accordance with the terms
hereof.
<PAGE>
-24-
TELE-COMMUNICATIONS, INC.
By:
_______________________________________
Name:
Title:
__________________________________
as Depositary,
By:
______________________________________
Name:
Title:
<PAGE>
EXHIBIT A
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES,
EACH REPRESENTING _________ OF A SHARE OF
[TITLE OF UNDERLYING PREFERRED STOCK]
par value $0.01 per share
OF
TELE-COMMUNICATIONS, INC.
(Incorporated under the Laws of the State of Delaware)
No. Depositary Shares
CUSIP _______________
____________________________, as Depositary (the "Depositary"), hereby
certifies that ___________________ is the registered owner of
____________________ Depositary Shares (the Depositary Shares"), each Depositary
Share representing one-hundredth of a share of ______ [title of underlying
preferred stock], par value $0.01 per share (the "Preferred Stock"), of Tele-
Communications, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"), and the same proportionate interest in
any and all other property received by the Depositary in respect of such shares
of Preferred Stock and held by the Depositary under the Deposit Agreement (as
defined below). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges of the Preferred Stock represented thereby, including the
dividend, voting, [conversion,] liquidation and other rights contained in the
Certificate of Designations, establishing the rights, preferences, privileges
and limitations of the Preferred Stock (the "Certificate of Designations"),
copies of which are on file at the office of the Depositary at which at any
particular time its business in respect of matters governed by the Deposit
Agreement shall be administered, which at the time of the execution of the
Deposit Agreement is located at _______________, ________, _________________
(the "Depositary's Office").
<PAGE>
-2-
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK. THE
DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION SET
FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY
SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET
FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT
ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE
DEPOSITARY SHARES OR RECEIPTS (EXCEPT FOR ITS COUNTERSIGNATURES THEREON), AS TO
THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE
DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF
THE RECEIPTS IN AND TO THE DEPOSITARY SHARES.
The Company will furnish to any holder of a Receipt without charge,
upon request addressed to its executive office or the office of its transfer
agent, a statement or summary of the powers, designations, preferences and
relative, participating, optional or other special rights of each authorized
class of capital stock of the Company, and of each class and series of preferred
stock of the Company authorized to be issued, so far as the same may have been
fixed, and of the qualifications, limitations or restrictions of such
preferences and/or rights.
This Depositary Receipt (the "Receipt") is continued on the reverse
hereof and the additional provisions therein set forth for all purposes have the
same effect as if set forth at this place.
Dated:
_____________________________________
Depositary and Registrar
By:________________________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE
OF DEPOSITARY RECEIPT]
1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of
---------------------
which this Receipt is one, are made available upon the terms and conditions set
forth in the Deposit Agreement, dated as of ________ __, 199_ (the "Deposit
Agreement") among the Company, the Depositary and all holders from time to time
of Receipts. The Deposit Agreement (copies of which are on file at the
Depositary's Office and at the office of any Depositary's Agent) sets forth the
rights of holders of Receipts and the rights and duties of the Depositary. The
statements made on the face and the reverse of this Receipt are summaries of
certain provisions of the Deposit Agreement and are subject to the detailed
provisions thereof, to which reference is hereby made. In the event of any
conflict between the provisions of this Receipt and the provisions of the
Deposit Agreement, the provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
-----------
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Redemption of Preferred Stock. Whenever the Company shall elect
-----------------------------
to redeem shares of Preferred Stock in accordance with the Certificate of
Designations, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary the notice required by the
Deposit Agreement. The Depositary shall mail, first class postage prepaid,
notice of such redemption and the proposed simultaneous redemption of the number
of Depositary Shares representing the Preferred Stock held by the Depositary to
be redeemed, not less than __ and not more than __ days prior to the date fixed
for redemption of such Preferred Stock and Depositary Shares (the "Redemption
Date"), to the record holders of the Receipts evidencing the Depositary Shares
to be so redeemed, at the addresses of such holders as they appear on the
records of the Depositary; but neither failure to mail any such notice to one or
more such holders nor any defect in any notice to one or more such holders shall
affect the sufficiency of the proceedings for redemption as to other holders.
Each such notice shall state: (i) the Redemption Date; (ii) the number of
Depositary Shares to be redeemed and, if less than all the Depositary Shares
held by any such holder are to be redeemed, the number of such Depositary Shares
held by such holder to be so redeemed; (iii) the redemption price; (iv) the
place or places where Receipts evidencing Depositary Shares are to be
surrendered for payment of the redemption price; and (v) that dividends in
respect of the shares of Preferred Stock represented by the Depositary Shares to
be redeemed will cease to accumulate from and after such Redemption Date. Any
such notices shall be mailed in the same manner as notices of redemption of the
Preferred Stock are required to be mailed pursuant to Section __ of the
Certificate of Designations and published in the same manner as notices of
redemption of the Preferred Stock are required to be published pursuant to said
section, if so required. In case fewer than all the outstanding Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed shall be
selected by lot or pro rata (as nearly as may be) or by any other equitable
method determined by the Depositary to be consistent with the method determined
by the Board
<PAGE>
-2-
of Directors of the Company with respect to the Preferred Stock.
Notice having been mailed and published by the Depositary as
aforesaid, from and after the Redemption Date (unless the Company shall have
failed to redeem the shares of Preferred Stock to be redeemed by it, as set
forth in the Company's notice provided for above), the Depositary Shares called
for redemption shall be deemed no longer to be outstanding and all rights of the
holders of Receipts evidencing such Depositary Shares (except the right to
receive the redemption price) shall, to the extent of such Depositary Shares,
cease and terminate. Upon surrender in accordance with said notice of the
Receipts evidencing such Depositary Shares (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Depositary Shares shall be
redeemed for a redemption price at a rate per Depositary Share equal to one-
_________ of the redemption price delivered upon redemption of a share of
Preferred Stock pursuant to the Certificate of Designations. The foregoing
shall be subject further to the terms and conditions of the Certificate of
Designations and the Deposit Agreement.
If fewer than all of the Depositary Shares evidenced by this Receipt
are called for redemption, the Depositary will deliver to the holder of this
Receipt upon its surrender to the Depositary, together with the redemption price
for the Depositary Shares called for redemption, a new receipt evidencing the
Depositary Shares evidenced by such prior Receipt and not called for redemption.
[4. Surrender of Receipts and Withdrawal of Preferred Stock. Upon
-------------------------------------------------------
surrender of this Receipt to the Depositary at the Depositary's Office or such
other offices as the Depositary may designate, and subject to the provisions of
the Deposit Agreement, the holder hereof is entitled to withdraw, and to obtain
delivery of, to or upon the order of such holder, any or all of the Preferred
Stock (but only in whole shares of Preferred Stock) and any or all money and
other property, if any, at the time represented by the Depositary Shares
evidenced by this Receipt; provided, however, that, in the event this Receipt
shall evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the whole number of shares of Preferred Stock to
be withdrawn, the Depositary shall, in addition to such whole number of shares
of Preferred Stock and such money and other property, if any, to be withdrawn,
deliver, to or upon the order of such holder, a new Receipt or Receipts
evidencing such excess number of whole Depositary Shares.]
[5. Conversion of Preferred Stock into Common Stock. Subject to the
-----------------------------------------------
terms and conditions of the Deposit Agreement and the Certificate of
Designations, this Receipt may be surrendered with written instructions to the
Depositary to instruct the Company to cause the conversion of any specified
number of whole shares of Preferred Stock represented by whole Depositary Shares
evidenced hereby into whole shares of Class A Common Stock, par value $1.00 per
share ("Common Stock"), and cash for any fractional share of Common Stock at the
conversion price then in effect for the Preferred Stock pursuant to the
Certificate of Designations as such conversion price may be adjusted by the
Company from time to time as provided in the
<PAGE>
-3-
Certificate of Designations. Subject to the terms and conditions of the Deposit
Agreement and the Certificate of Designations, a holder of a Receipt or Receipts
evidencing Depositary Shares representing whole or fractional shares of
Preferred Stock may surrender such Receipt or Receipts at the Depositary's
Office or at such office or to such Depositary's Agents as the Depositary may
designate for such purpose, together with a notice of conversion duly completed
and executed, thereby directing the Depositary to instruct the Company to cause
the conversion of the number of shares, or fractions of shares, of underlying
Preferred Stock specified in such notice of conversion into shares of Common
Stock, and an assignment of such Receipt or Receipts to the Company or in blank,
duly completed and executed. To the extent that a holder delivers to the
Depositary for conversion a Receipt or Receipts which in the aggregate are
convertible into less than one whole share of Common Stock, the holder shall
receive payment in cash in lieu of such fractional share of Common Stock
otherwise issuable. If more than one Receipt shall be delivered for conversion
at one time by the same holder, the number of whole shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of Depositary Shares represented by the Receipts so delivered.
If Preferred Stock shall be called by the Company for redemption, the
Depositary Shares representing such Preferred Stock may be converted into Common
Stock as provided in the Deposit Agreement until, but not after, the close of
business on the Redemption Date unless the Company shall fail to deposit with
the Depositary the amounts required to redeem the Preferred Stock held by the
Depositary, in which case the Depositary Shares representing such Preferred
Stock may continue to be converted into Common Stock until, but not after, the
close of business on the date on which the Company deposits with the Depositary
such amounts as are required by the Certificate of Designations to make full
payment of the amounts payable upon such redemption. Upon receipt by the
Depositary of a Receipt or Receipts, together with a properly completed and
executed notice of conversion, representing any Preferred Stock called for
redemption, the shares of Preferred Stock held by the Depositary represented by
such Depositary Shares for which conversion is requested shall be deemed to have
been received by the Company for conversion as of immediately prior to the close
of business on the date of such receipt by the Depositary.]
6. Transfers, Split-ups, Combinations. Subject to Paragraphs 7, 8
----------------------------------
and 9 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Depositary's Office or such
other offices as the Depositary may designate, properly endorsed or accompanied
by a properly executed instrument of transfer or endorsement, and upon such
surrender the Depositary shall execute and deliver a Receipt to or upon the
order of the person entitled thereto, all as provided in and subject to the
Deposit Agreement. This Receipt may be split into other Receipts or combined
with other Receipts into one Receipt evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not execute and deliver any Receipt
evidencing a fractional Depositary Share.
<PAGE>
-4-
7. Conditions to Signing and Delivery, Transfer, etc., of Receipts.
---------------------------------------------------------------
Prior to the execution and delivery, transfer, split-up, combination, surrender
or exchange of this Receipt, the Depositary, any of the Depositary's Agents or
the Company may require any or all of the following: (i) payment to it of a sum
sufficient for the payment (or, in the event that the Depositary or the Company
shall have made such payment, the reimbursement to it) of any tax or other
governmental charge with respect thereto (including any such tax or charge with
respect to Preferred Stock being deposited or withdrawn or with respect to
[Common Stock or] other securities or property of the Company being issued upon
[conversion or] redemption); (ii) the production of proof satisfactory to it as
to the identity and genuineness of any signature; and (iii) compliance with such
regulations, if any, as the Depositary or the Company may establish not
inconsistent with the Deposit Agreement. Any person presenting Preferred Stock
for deposit, or any holder of this Receipt, may be required to file such proof
of information, to execute such certificates and to make such representations
and warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold or delay the delivery of any
Receipt, the transfer, redemption[, conversion] or exchange of any Receipt, the
withdrawal of [the Preferred Stock or] money or other property, if any,
represented by the Depositary Shares evidenced by this Receipt or the
distribution of any dividend or other distribution until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
8. Suspension of Delivery, Transfer, etc. The deposit of Preferred
-------------------------------------
Stock may be refused, the delivery of Receipts against Preferred Stock may be
suspended, the transfer of Receipts may be refused and the transfer, split-up,
combination, surrender or exchange of this Receipt may be suspended (i) during
any period when the register of holders of Receipts is closed; (ii) if any such
action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time because of
any requirement of law or of any government or governmental body or commission,
or under any provision of the Deposit Agreement; or (iii) except for the
transfer of Receipts, with the approval of the Company, for any other reason.
[Except with respect to a conversion of Depositary Shares which may occur
pursuant to Section __ of the Certificate of Designations,] the Depositary shall
not be required (a) to execute and deliver, transfer or exchange any Receipts
for a period beginning at the opening of business 15 days next preceding any
selection of Depositary Shares and Preferred Stock to be redeemed and ending at
the close of business on the day of the mailing of notice of redemption of
Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt
evidencing Depositary Shares called or being called for redemption in whole or
in part, except as provided in the second to last paragraph of Paragraph 3
above.
9. Payment of Taxes or other Governmental Charges. If any tax or
----------------------------------------------
other governmental charge shall become payable by or on behalf of the Depositary
with respect to this Receipt, the Depositary Shares evidenced by this Receipt,
the Preferred Stock (or any fractional interest therein) represented by such
Depositary Shares or any transaction referred to in Section
<PAGE>
-5-
4.6 of the Deposit Agreement, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the holder
hereof. Until such payment is made, transfer, redemption, [conversion] or
exchange of this Receipt or any withdrawal of the Preferred Stock or money and
other property, if any, represented by the Depositary Shares evidenced by this
Receipt may be refused, any dividend or other distribution may be withheld and
any part or all of the Preferred Stock or other property represented by the
Depositary Shares evidenced by this Receipt may be sold for the account of the
holder hereof (after attempting by reasonable means to notify such holder prior
to such sale). Any dividend or other distribution so withheld and the proceeds
of any such sale may be applied to any payment of such tax or other governmental
charge, the holder of this Receipt remaining liable for any deficiency.
10. Amendment. The form of the Receipts and any provision of the
---------
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that they may deem
necessary or desirable. Any amendment that shall impose any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses provided for herein or in the Deposit
Agreement), or that shall otherwise prejudice any substantial existing right of
holders of Receipts, shall not become effective as to outstanding Receipts until
the expiration of 90 days after notice of such amendment shall have been given
to the record holders of outstanding Receipts. The holder of this Receipt at
the time any such amendment becomes effective shall be deemed, by continuing to
hold this Receipt, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair
the right, subject to the provisions of Paragraphs 3, 4, 5, 6, 8, 9 and 10
hereof and of Sections 2.3, 2.6, 2.7 and 2.10 and Article III of the Deposit
Agreement, of the owner of the Depositary Shares evidenced by this Receipt to
surrender this Receipt with instructions to the Depositary to deliver to the
holder the Preferred Stock and all money and other property, if any, represented
hereby, [or to cause the conversion of the underlying Preferred Stock into
Common Stock and cash for any fractional share amount], except in order to
comply with mandatory provisions of applicable law.
11. Fees, Charges and Expenses. The Company will pay all fees, charges
--------------------------
and expenses of the Depositary, except for taxes (including transfer taxes, if
any) and other governmental charges and such charges as are expressly provided
in the Deposit Agreement to be at the expense of persons depositing Preferred
Stock, holders of Receipts or other persons.
12. Ownership of Receipts. It is a condition of this Receipt, and every
---------------------
successive holder hereof by accepting or holding the same consents and agrees,
that ownership of this Receipt (and of the Depositary Shares evidenced hereby)
when properly endorsed or accompanied by a properly executed instrument of
transfer or endorsement, is transferable by delivery; provided, however, that
until this Receipt shall be transferred on the books of the Depositary as
provided in Section 2.4 of the Deposit Agreement, the Depositary may,
notwithstanding any notice to the contrary, treat the record holder hereof at
such time as the
<PAGE>
-6-
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and for all other purposes.
13. Dividends and Distributions. Whenever the Depositary receives any
---------------------------
cash dividend or other cash distribution on the Preferred Stock, the Depositary
will, subject to the provisions of the Deposit Agreement, distribute such
portions of such sum to record holders of Receipts as are, as nearly as
practicable, proportionate to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required to withhold and does withhold
from any cash dividend or other cash distribution in respect of the Preferred
Stock an amount on account of taxes or as otherwise required by law, regulation
or court order, the amount made available for distribution or distributed in
respect of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Depositary Shares a fraction of one cent and any balance not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to record holders of Receipts then outstanding.
14. Subscription Rights, Preferences or Privileges. If the Company shall
----------------------------------------------
at any time offer or cause to be offered to the persons in whose names
Preferred Stock is registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record holders of
receipts if the Company so directs in such manner as the Company shall instruct.
15. Notice of Dividends; Fixing of Record Date. Whenever any cash
------------------------------------------
dividend or other cash distribution shall become payable, any distribution other
than cash shall be made, or any rights, preferences or privileges shall at any
time be offered, with respect to the Preferred Stock, or whenever the Depositary
shall receive notice of (i) any meeting at which holders of Preferred Stock are
entitled to vote or of which holders of Preferred Stock are entitled to notice
or (ii) any election on the part of the Company to call for redemption any
shares of Preferred Stock, the Depositary shall in each such instance fix a
record date (which shall be the same date as the record date fixed by the
Company with respect to the Preferred Stock) for the determination of the
holders of Receipts (i) who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or to give instructions for the exercise of voting rights at any such
meeting or to receive notice of such meeting or (ii) whose Depositary Shares are
to be so redeemed.
16. Voting Rights. Upon issuance of notice of any meeting at which the
-------------
holders of Preferred Stock are entitled to vote, the Company shall direct the
Depositary, as soon as
<PAGE>
-7-
practicable thereafter, to mail to the record holders of Receipts a notice,
which shall contain (i) such information as is contained in such notice of
meeting (and, if applicable, such information as is provided together with such
notice of meeting), (ii) a statement that the holders of Receipts at the close
of business on a specified record date determined as provided in Paragraph 14
will be entitled, subject to any applicable provision of law, the Certificate of
Incorporation or the Certificate of Designations, to instruct the Depositary as
to the exercise of the voting rights pertaining to the amount of Preferred Stock
represented by their respective Depositary Shares, and (iii) a brief statement
as to the manner in which such instructions may be given. Upon the written
request of a holder of a Receipt on such record date, the Depositary shall
endeavor insofar as practicable to vote or cause to be voted the amount of
Preferred Stock represented by the Depositary Shares evidenced by such Receipt
in accordance with the instructions set forth in such request. The Company has
agreed to take all reasonable action that may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Preferred Stock or
cause such Preferred Stock to be voted. In the absence of specific instructions
from the holder of a Receipt, the Depositary will abstain from voting to the
extent of the Preferred Stock represented by the Depositary Shares evidenced by
such Receipt. After aggregating all voting Depositary Shares, the Depositary
will disregard for voting purposes any fractional share of Preferred Stock
remaining.
17. Reports, Inspection of Transfer Books. The Depositary shall make
-------------------------------------
available for inspection by holders of Receipts at the Depositary's Office and
at such other places as it may from time to time deem advisable during normal
business hours any reports and communications received from the Company that are
both received by the Depositary as the holder of Preferred Stock and made
generally available to the holders of Preferred Stock by the Company. The
Depositary shall keep books at the Depositary's Office for the registration and
transfer of Receipts, which books during normal business hours will be open for
inspection by the record holders of receipts as provided by applicable law.
18. Liability of the Depositary, the Depositary's Agents and the Company.
--------------------------------------------------------------------
Neither the Depositary nor any Depositary's Agent nor the Company shall incur
any liability to any holder of any Receipt if, by reason of any provision of any
present or future law or regulation of any governmental authority or, in the
case of the Depositary or any Depositary's Agent, by reason of any provision,
present or future, of the Restated Certificate of Incorporation or the
Certificate of Designations or, in the case of the Company, the Depositary or
any Depositary's Agent, by reason of any act of God or war or other circumstance
beyond the control of the relevant party, the Depositary, any Depositary's Agent
or the Company shall be prevented or forbidden from doing or performing any act
or thing that the terms of the Deposit Agreement provide shall or may be done or
performed; nor shall the Depositary, any Depositary's Agent or the Company incur
any liability to any holder of a Receipt by reason of any nonperformance or
delay, caused as aforesaid, in the performance of any act or thing that the
terms of the Deposit Agreement provide shall or may be done or performed or by
reason of any exercise of, or failure to exercise, any discretion provided for
in the Deposit Agreement.
<PAGE>
-8-
19. Obligations of the Depositary, the Depositary's Agents and the
--------------------------------------------------------------
Company. Neither the Depositary nor any Depositary's Agent nor the Company
assumes any obligation or shall be subject to any liability hereunder or under
the Deposit Agreement to holders of Receipts other than that each of them agrees
to use good faith in the performance of such duties as are specifically set
forth in the Deposit Agreement. Neither the Depositary nor any Depositary's
Agent nor the Company shall be under any obligation to appear in, prosecute or
defend any action, suit or other proceeding with respect to Preferred Stock,
Depositary Shares, Receipts [or Common Stock] that in its opinion may involve it
in expense or liability, unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required. Neither the Depositary
nor any Depositary's Agent nor the Company will be liable for any action or
failure to act by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Preferred Stock for deposit, any
holder of a Receipt or any other person believed by it in good faith to be
competent to give such advice or information.
20. Termination of Deposit Agreement. Whenever so directed by the Company
--------------------------------
upon at least five Business Days' prior notice, the Depositary will terminate
the Deposit Agreement, provided that notice of such termination has been given
by mailing notice of such termination to the record holders of all Receipts then
outstanding at least 30 days prior to the date fixed in such notice for such
termination. The Depositary may likewise terminate the Deposit Agreement if at
any time 45 days shall have expired after the Depositary shall have delivered to
the Company a written notice of its election to resign and a successor
Depositary shall not have been appointed and accepted its appointment as
provided in Section 5.4 of the Deposit Agreement. Upon the termination of the
Deposit Agreement, the Company shall be discharged from all obligations
thereunder except for its obligations to the Depositary, any Depositary's Agent
and any Registrar under Sections 5.7 and 5.8 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination, the
Depositary thereafter shall discontinue all functions and be discharged from all
obligations as provided in the Deposit Agreement, except as specifically
provided therein.
21. Governing Law. The Deposit Agreement and this Receipt and all rights
-------------
thereunder and hereunder and provisions thereof and hereof shall be governed by,
and construed in accordance with, the law of the State of New York without
giving effect to principles of conflict of laws.
<PAGE>
-9-
This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been executed manually or, if a Registrar for the Receipts (other than the
Depositary) shall have been appointed, by facsimile by the Depositary by the
signature of a duly authorized signatory and, if executed by facsimile signature
of the Depositary, shall have been countersigned manually by such Registrar by
the signature of a duly authorized signatory.
Dated:
________________________________
Depositary and Registrar
By: ___________________________________
Authorized Signatory
<PAGE>
-10-
[NOTICE OF CONVERSION
The undersigned holder of this Receipt for Depositary Shares hereby
irrevocably exercises the option to convert that number of shares, or fractions
of shares, of [title of underlying preferred stock] of the Company represented
by __________ Depositary Shares into shares of Common Stock of the Company and
cash for any fraction of Common Stock in accordance with the terms of and
subject to the conditions of the Preferred Stock, including the Certificate of
Designations in respect thereof and the Deposit Agreement, and directs the
Depositary to instruct the Company that the shares of Common Stock deliverable
upon such conversion be registered in the name of, and delivered together with a
check in payment for any fractional shares of Common Stock to, the undersigned
unless a different name has been indicated below. If the shares of Common Stock
are to be registered in the name of a person other than the undersigned, the
undersigned will pay all transfer and similar taxes payable with respect
thereto. If the number of shares of Preferred Stock, represented by the number
of Depositary Shares set forth above, is less than the number of shares of
Preferred Stock on deposit in respect of this Receipt, the undersigned directs
that the Depositary execute and deliver to the undersigned, unless a different
name is indicated below, a new receipt evidencing Depositary Shares for the
balance of such Preferred Stock not to be converted.
Dated:_________________________________________________
Signature:________________________________________
( )
NOTE: The signature on this notice of conversion must
correspond with the name as written upon the face of this
Receipt in every particular without alteration or
enlargement or any change whatsoever, and must be guaranteed
by a commercial bank, trust company, securities broker or
dealer, credit union, savings association or other eligible
guarantor institution which is a member of or participant in
a signature guarantee program acceptable to the Depositary.
Name: _________________________________________________________________________
Address: _____________________________________________________________________
(Please print name and address of Registered Holder)
Name: ________________________________________________________________________
<PAGE>
-11-
Address: _____________________________________________________________________]
(Please indicate other delivery instructions, if applicable)
<PAGE>
EXHIBIT 4.3
================================================================================
TELE-COMMUNICATIONS, INC.
AND
[WARRANT AGENT]
AS WARRANT AGENT
--------------------
WARRANT AGREEMENT -- PREFERRED STOCK
DATED AS OF _____________, 199_
--------------------
================================================================================
<PAGE>
TELE-COMMUNICATIONS, INC.
Form of Preferred Stock Warrant Agreement*
THIS WARRANT AGREEMENT, dated as of ________, 199_, between TELE-
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and [WARRANT
AGENT], as Warrant Agent (the "Warrant Agent").
[WHEREAS, the Board or Directors of the Company has authorized the
issuance of a series of preferred stock of the Company designated its [title of
preferred stock to be issuable upon exercise of Warrants] (the "Preferred
Stock")];
WHEREAS, the Company proposes to sell [IF WARRANTS ARE SOLD WITH
-------------------------
PREFERRED STOCK OR COMMON STOCK: the [title of preferred stock being offered]
- -------------------------------
[title of common stock being offered] (the "Offered Securities") with] warrant
certificates evidencing one or more warrants (the "Warrants" or individually a
"Warrant"), representing the right to purchase the Preferred Stock (the "Warrant
Securities"), such warrant certificates and other warrant certificates issued
pursuant to this Agreement being referred to herein as the "Warrant
Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.1. Issuance of Warrants. [IF WARRANTS ALONE: Upon
-------------------- ------------------
issuance, each Warrant Certificate shall evidence one or more Warrants. Each
Warrant evidenced thereby shall initially represent the right, subject to the
provisions contained herein and therein, to purchase _____ shares of Offered
Securities.] [IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES: Warrants
------------------------------------------------------
shall be
- ----------
* Complete or modify the provisions of this Form as appropriate to reflect
the terms of the Warrants, Warrant Securities and Offered Securities.
<PAGE>
[initially] issued in units with the Offered Securities [but shall be separately
transferable on and after __________________, 199_ (the "Detachable Date")] [and
shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants. Each Warrant Certificate included in such a unit
shall evidence ________ Warrants for each ________ shares of Offered Securities
included in such unit.] [Each Warrant shall represent the right, subject to the
provisions contained herein and therein, to purchase _____ shares of Warrant
Securities.]
SECTION 1.2. Execution and Delivery of Warrant Certificates. Each
----------------------------------------------
Warrant Certificate, whenever issued, shall be in registered form substantially
in the form set forth in Exhibit A, shall be dated ________, 199_, 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
officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement or as may be required to comply with any law, rule
or regulation or with any rule or regulation of any stock exchange or inter-
dealer quotation system on which the Warrants may be listed or to conform to
usage. The Warrant Certificates shall be executed on behalf of the Company by
the Chairman of the Board, the President, any Vice Chairman, any Executive Vice
President or any Senior Vice President and by its Secretary or any Assistant
Secretary under its corporate seal reproduced thereon. Such signatures may be
manual or facsimile signatures of such authorized officers and may be imprinted
or otherwise reproduced on the Warrant Certificates. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
If any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be an
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such an officer of the Company. Any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although
- 2 -
<PAGE>
at the date of the execution of this Agreement any such person was not such
officer.
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that purpose
[IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY
-----------------------------------------------------------------------------
DETACHABLE: or upon the register of the Offered Securities prior to the
- ----------
Detachable Date. Prior to the Detachable Date, the Company shall, or shall
cause the registrar of the Offered Securities to, make available at all times to
the Warrant Agent such information as to holders of the Offered Securities with
Warrants as may be necessary to keep the Warrant Agent's records up to date].
SECTION 1.3. Issuance of Warrant Certificates. Warrant Certificates
--------------------------------
evidencing the right to purchase not more than ____ shares of Warrant Securities
(except as provided in Section 1.4, 2.3(c), 3.2 and 4.1) may be executed by the
Company and delivered to the Warrant Agent upon the execution of this Warrant
Agreement or from time to time thereafter. The Warrant Agent shall, upon
receipt of Warrant Certificates duly executed on behalf of the Company,
countersign Warrant Certificates evidencing Warrants representing the right to
purchase up to ______ shares of Warrant Securities (subject to adjustment as
aforesaid) and shall deliver such Warrant Certificates to or upon the order of
the Company. Subsequent to such original issuance of the Warrant Certificates,
the Warrant Agent shall countersign a Warrant Certificate only if the Warrant
Certificate is issued in exchange or substitution for one or more previously
countersigned Warrant Certificates, upon the partial exercise of a warrant
evidenced by a Warrant Certificate or in connection with their transfer as
provided in Section 2.3(c) or Article IV.
SECTION 1.4. Temporary Warrant Certificate. Pending the preparation
-----------------------------
of definitive Warrant Certificates, the Company may execute, and, upon the order
of the Company, the Warrant Agent shall authenticate and deliver, temporary
Warrant Certificates that are printed, lithographed, typewritten, mimeographed
or otherwise produced substantially of the tenor of the definitive Warrant
Certificate in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, as evidenced by their
execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company shall cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the corporate trust office of
- 3 -
<PAGE>
the Warrant Agent [or at ___________, ___________, ____________], without charge
to the holder. Upon surrender for cancellation of any one or more temporary
Warrant Certificates, the Company shall execute and the Warrant Agent shall
authenticate and deliver in exchange therefor definitive Warrant Certificates
representing the same aggregate number of Warrants. Until so exchanged, the
temporary Warrant Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Warrant Certificates.
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.1. Warrant Price. [During the period from ________,
-------------
_______ through and including ________________, _______,] the exercise price of
each Warrant shall be $_____________. [During the period from
___________________, _____ through and including _____________, _____, the
exercise price of each Warrant shall be $________.] The applicable exercise
price of the Warrants is referred to in this Agreement as the "Warrant Price."
(a) Notwithstanding any provision in this Agreement to the contrary,
the Company may at its option, at any time during the term of the Warrants, for
a period not less than 15 days, reduce the then Warrant Price by an amount
deemed appropriate by the Board of Directors of the Company. Such increase or
reduction shall be effective only with respect to Warrants exercised during such
period.
Upon any such reduction of the Warrant Price, the Company shall give
prompt written notice of such adjustment to the Warrant Agent and the Warrant
Agent shall, on behalf of and at the expense of the Company, promptly, and in
any case within 10 days after receiving notice of such adjustment, mail by first
class mail, postage prepaid, to each holder, such notice prepared by the Company
of such adjustment. The Warrant Agent shall exhibit the notice, from time to
time, to any holder desiring an inspection thereof during reasonable business
hours. The Warrant Agent shall be entitled to rely on such notice and, except
as set forth herein, shall be under no duty or responsibility with respect to
any such notice.
(b) Warrants may be exercised by the holders thereof at any time at
the Warrant Price then in effect when the Warrant Securities are registered
pursuant to an effective registration statement under the Securities Act.
Warrants shall in no event be exercisable for the purchase of Warrant Securities
at any time when such Warrant Securities are not registered pursuant to an
effective registration statement under the Securities Act. The Company shall
- 4 -
<PAGE>
promptly give all holders of Warrants notice of the effectiveness of a
registration statement in respect of Warrant Securities and of any subsequent
lapses in the effectiveness of such registration statement.
SECTION 2.2. Duration of Warrants. Each Warrant may be exercised in
--------------------
whole at any time as specified herein on or after [the date thereof] [________,
____,] and at or before 5:00 P.M., New York City time, on ________, ____, or
such later date as the Company may designate, by notice to the Warrant Agent and
the holders of Warrant Certificates mailed to their addresses as set forth in
the record books of the Warrant Agent (the "Expiration Date"). Each Warrant not
exercised at or before 5:00 P.M., New York City time, on the Expiration Date
shall become void, and all rights of the holder of the Warrant Certificates
evidencing such Warrant under this Agreement shall cease.
SECTION 2.3. Exercise of Warrants. (a) During the period specified
--------------------
in Section 2.2 any whole number of Warrants may be exercised by providing
certain information as set forth on the reverse side of the Warrant Certificate
and by paying in full, in lawful money of the United States of America, in cash
or by certified check or official bank check or by bank wire transfer, in each
case in immediately available funds, the Warrant Price for each Warrant
exercised to the Warrant Agent at its corporate trust office [or at ________,
________, ________], provided that such exercise is subject to receipt within
five business days of such payment by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities set forth
on the reverse side of the Warrant Certificate properly completed and duly
executed. The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised. If,
pursuant to the immediately preceding sentence, the Warrant shall be deemed to
be exercised on a date after the Expiration Date, the exercise thereof shall be
null and void and such payment returned to the holder thereof as promptly as
practicable. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of the Company maintained with it and
shall advise the Company by telephone at the end of each day on which a payment
for the exercise of Warrants is received of the amount so deposited to its
account. The Warrant Agent shall promptly confirm such telephone advice to the
Company in writing. If the Warrant Agent does not receive the Warrant
Certificate within five business days after such payment, upon the written
request of the holder and after notice to the Company, the Warrant Agent may
repay the Warrant Price to the holder by withdrawing from the Company's account
the funds received from the holder.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of
- 5 -
<PAGE>
Warrants exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of the Warrant
Securities to which such holder is entitled upon such exercise, (iii) delivery
of Warrant Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise, and (iv) such other information as the Company
shall reasonably require.
(c) As promptly as practicable after the exercise of any Warrant, the
Company shall issue, in authorized denominations, to or upon the order of the
holder of the Warrant Certificate evidencing such Warrant, the Warrant
Securities to which such holder is entitled, in fully registered form,
registered in such name or names as may be directed by such holder. If fewer
than all of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, a new Warrant Certificate evidencing the
number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax
or other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities, and if any such transfer is
involved, the Company shall not be required to issue or deliver any Warrant
Security until such tax or other charge shall have been paid or it has been
established to the Company's satisfaction that no such tax or other charge is
due.
SECTION 2.4. No Fractional Shares to Be Issued. Notwithstanding
---------------------------------
anything to the contrary contained in this Agreement, if the number of shares of
Warrant Securities purchasable on the exercise of each Warrant is not a whole
number, the Company shall not be required to issue any fraction of a share of
Preferred Stock, to distribute stock certificates that evidence fractional
shares of Preferred Stock, or to issue a Warrant Certificate representing a
fractional Warrant upon exercise of any Warrants. If Warrant Certificates
evidencing more than one Warrant shall be surrendered for exercise at one time
by the same holder, the number of full shares which shall be issuable upon
exercise thereof shall be computed on the basis of the aggregate number of
Warrants so surrendered. If any fraction of a shares of Preferred Stock would,
except for the provisions of this Section 2.4, be issuable on the exercise of
any Warrant or Warrants, the Company shall purchase such fraction for an amount
in cash equal to such fraction of the then current fair market value of a share
of the Preferred Stock (as determined by the Board of Directors of the Company,
whose determination shall be conclusive). The Warrantholders, by their
acceptance of the Warrant Certificates, expressly waive their right to receive a
stock certificate or Warrant Certificate representing a fraction of a share of
Preferred Stock or a fraction of a Warrant, respectively.
- 6 -
<PAGE>
SECTION 2.5. Covenant to Reserve Shares for Issuance on Exercise.
---------------------------------------------------
The Company covenants that it shall at all times reserve and keep available out
of its authorized but unissued Preferred Stock, solely for the purpose of issue
upon exercise of Warrants, the full number of shares of Preferred Stock, if any,
then issuable if all outstanding Warrants then exercisable were to be exercised.
The Company covenants that all Warrant Securities which shall be so
issuable shall be duly and validly issued, fully paid and nonassessable.
The Company hereby authorizes and directs its current and future
transfer agents for the Warrant Securities at all times to reserve such number
of authorized shares as shall be requisite for such purpose. The Company shall
supply such transfer agents with duly executed stock certificates for such
purposes and shall provide or otherwise make available any cash which may be
payable as provided in this Article II.
SECTION 2.6. Compliance with Governmental Requirements. The Company
-----------------------------------------
covenants that if any Warrant Securities required to be reserved for purposes of
exercise of Warrants require, under any applicable Federal or State law, rule or
regulation or any rule or regulation of any national securities exchange or
inter-dealer quotation system, registration with or approval of any such
governmental authority or listing on any such national securities exchange or
inter-dealer quotation system before such shares may be issued upon exercise,
the Company shall in good faith and as promptly as practicable endeavor to cause
such shares to be duly registered, approved or listed, as the case may be;
provided, however, that in no event shall such Warrant Securities be issued, and
- -------- -------
the Company is hereby authorized to suspend the exercise of all Warrants, for
the period during which such registration, approval or listing is required but
not in effect.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.1. No Rights as Warrant Securityholder Conferred by
------------------------------------------------
Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
- --------------------------------
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to receive the
payment of dividends or distributions, if any, on the Warrant Securities or to
exercise any voting rights.
SECTION 3.2. Lost, Stolen, Mutilated or Destroyed Warrant
--------------------------------------------
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
- ------------
satisfactory to it and the Company of the ownership of
- 7 -
<PAGE>
and the loss, theft, destruction or mutilation of any Warrant Certificate and of
indemnity reasonably satisfactory to the Warrant Agent and the Company, and, in
the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of
the same tenor and evidencing a like number of Warrants. Upon the issuance of
any new Warrant Certificate under this Section 3.2, 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 Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this Section 3.2 in lieu
of any lost, stolen or destroyed Warrant Certificate shall represent an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder. The provisions of this Section 3.2 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement of mutilated, lost, stolen or destroyed Warrant Certificates.
SECTION 3.3. Holder of Warrant Certificate May Enforce Rights.
------------------------------------------------
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the Trustee, the holder
of any Warrant Securities or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce,
or otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and this
Agreement.
SECTION 3.4. Reclassification, Consolidation, Merger, Sale,
----------------------------------------------
Conveyance or Lease. If any of the following shall occur while any Warrants are
- -------------------
outstanding: (a) any reclassification or change of the outstanding shares of
Warrant Securities (other than a change in par value or from par value to no par
value or from no par value to par value); (b) any consolidation or merger to
which the Company is party (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification of or change in the outstanding shares of Warrant Securities
issuable upon exercise of the Warrants); or (c) any sale, conveyance, transfer
or lease to another corporation of the properties and assets of the Company as
an entirety or substantially as an entirety, then the Company or such successor
or
- 8 -
<PAGE>
purchasing corporation, as the case may be, shall thereupon make appropriate
provision by amendment of this Agreement or otherwise so that the holders of the
Warrants then outstanding shall have the right at any time thereafter, upon
exercise of the Warrants, to purchase the kind and amount of shares of stock,
other securities and property receivable upon such reclassification, change,
consolidation, merger, sale, conveyance, transfer or lease as would be received
by a holder of the number of shares of Warrant Securities issuable upon exercise
of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale, conveyance, transfer or lease (assuming that such
holder of Warrant Securities failed to exercise rights of election, if any, as
to the kind or amount of shares or stock, other securities or property
receivable upon consummation of any such transaction (provided that if the kind
or amount of shares of stock, other securities or property receivable upon
consummation of such transaction is not the same for each non-electing share,
then the kind and amount of shares of stock, other securities or property
receivable upon consummation of such transaction for each non-electing share
shall be deemed to the kind and amount so receivable per share by a plurality of
the non-electing shares). Any successor or assuming corporation may cause to be
signed, and may issue either in its own name or in the name of the Company, any
or all of the Warrants issuable hereunder which theretofore shall not have been
issued by the Company, and may execute and deliver Warrant Securities in its own
name in fulfillment of its obligations to deliver Warrant Securities upon
exercise of the Warrants. All the Warrants so issued shall in all respects have
the same legal rank and benefit under this Agreement as the Warrants theretofore
or thereafter issued in accordance with the terms of this Agreement as though
all of such Warrants had been issued at the date of the execution hereof. The
Company shall thereupon be relieved of any further obligation hereunder or under
the Warrants, and the Company as the predecessor corporation may thereupon or at
any time thereafter be dissolved, wound up or liquidated. In case of any such
reclassification, change, consolidation, merger, sale, conveyance, transfer or
lease, such changes in phraseology and form (but not in substance) may be made
in the Warrants thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal counsel as
conclusive evidence that any such reclassification, change, consolidation,
merger, sale, conveyance or transfer complies with the provisions of this
Section 3.4.
- 9 -
<PAGE>
ARTICLE IV
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES
SECTION 4.1. Exchange and Transfer of Warrant Certificates. [IF
--------------------------------------------- --
WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE IMMEDIATELY
- ----------------------------------------------------------------------
DETACHABLE OR ARE ISSUED ALONE: Upon] [IF WARRANTS ARE SOLD IN UNITS WITH
- ------------------------------ ----------------------------------
OFFERED SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE: Prior to the Detachable
- -----------------------------------------------------
Date, a Warrant Certificate may be exchanged or transferred only together with
the Offered Security to which the Warrant Certificate was initially attached and
only for the purpose of effecting or in conjunction with an exchange or transfer
of such Offered Security. Prior to the Detachable Date, each transfer of the
Offered Security on the register of the Offered Securities shall operate also to
transfer the related Warrant Certificates. After the Detachable Date, upon]
surrender at the corporate trust office of the Warrant Agent [or at _______,
___________, _______________], Warrant Certificates evidencing Warrants may be
exchanged for Warrant Certificates in other denominations evidencing such
Warrants [or the transfer thereof may be registered in whole or in part],
provided that such other Warrant Certificates evidence the same aggregate number
of Warrants as the Warrant Certificates so surrendered. [The Warrant Agent
shall keep, at its corporate trust office [and at __________, _______________,
_________________], books in which, subject to such reasonable regulations as it
may prescribe, it shall register Warrant Certificates and exchanges and
transfers of outstanding Warrant Certificates, upon surrender of the Warrant
Certificates to the Warrant Agent at its corporate trust office [or at ________,
___________, _____________] for exchange or registration of transfer, properly
endorsed or accompanied by appropriate instruments of registration of transfer
and written instructions for transfer, all in form satisfactory to the Company
and the Warrant Agent.] No service charge shall be made for any exchange [or
registration of transfer] of Warrant Certificates, but the Company may require
payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange [or
registration of transfer]. Whenever any Warrant Certificates are so surrendered
for exchange [or registration of transfer], an authorized officer of the Warrant
Agent shall manually countersign and deliver to the person or persons entitled
thereto a Warrant Certificate or Warrant Certificates duly authorized and
executed by the Company, as so requested. The Warrant Agent shall not be
required to effect any exchange [or registration of transfer] which will result
in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a
number of full Warrants and a fraction of a Warrant. All Warrant Certificates
issued upon any exchange [or registration of transfer] of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same obligations,
and entitled to
- 10 -
<PAGE>
the same benefits under this Agreement, as the Warrant Certificate surrendered
for such exchange [or registration of transfer].
SECTION 4.2. Treatment of Holders of Warrant Certificates. [IF
-------------------------------------------- --
WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY
- --------------------------------------------------------------------------
DETACHABLE: Prior to the Detachable Date, the Company, the Warrant Agent and
- ----------
all other persons may treat the registered holder of the Offered Security as the
owner of the Warrant Certificates initially attached thereto for any purpose and
as the person entitled to exercise the rights represented by the Warrants
evidenced by such Warrant Certificates, any notice to the contrary
notwithstanding. After the Detachable Date, and prior to due presentment of a
Warrant Certificate for registration of transfer,] [T]he Company, the Warrant
Agent and all other persons may treat the registered holder of a Warrant
Certificate as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding.
SECTION 4.3. Cancellation of Warrant Certificates. Any Warrant
------------------------------------
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall promptly notify the Company of any Warrant Certificate
which has been cancelled and shall deliver to the Company from time to time or
otherwise dispose of cancelled Warrant Certificates in a manner satisfactory to
the Company.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.1. Warrant Agent. The Company hereby appoints [Warrant
-------------
Agent] as Warrant Agent of the Company in respect of the Warrants and the
Warrant Certificates upon the terms and subject to the conditions herein set
forth, and [Warrant Agent] hereby accepts such appointment. The Warrant Agent
shall have the powers and authority granted to and conferred upon it in the
Warrant Certificates and this Agreement and such further powers and authority to
act on behalf of the Company as the Company may hereinafter grant to or confer
upon it. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.
- 11 -
<PAGE>
SECTION 5.2. Conditions of Warrant Agent's Obligations. The Warrant
-----------------------------------------
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including, without limitation, the terms and conditions set forth in
this Section 5.2, to all of which the Company agrees and to all of which the
rights of the holders from time to time of the Warrant Certificates hereunder
shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to
--------------------------------
pay the Warrant Agent the compensation to be agreed upon with the Company for
all services rendered by the Warrant Agent and to reimburse the Warrant Agent
for reasonable out-of-pocket expenses (including reasonable counsel fees and
expenses) incurred by the Warrant Agent without gross negligence, bad faith or
breach of this Agreement on its part in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith or willful misconduct, or breach
of this Agreement on the part of the Warrant Agent, arising out of or in
connection with its acting as Warrant Agent hereunder, as well as the reasonable
costs and expenses of defending against any claim of such liability.
(b) Agent for the Company. In acting under this Warrant Agreement
---------------------
and in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligations or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory
-------
to it, and the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur
---------
no liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit or other document furnished to it by the Company reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
--------------------
directors and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it or
they may engage or be interested in any financial or other transaction with the
Company and may act on, or as depositary, trustee or agent for, any
- 12 -
<PAGE>
committee or body of holders of Warrant Securities or other obligations of the
Company as freely as if it were not the Warrant Agent hereunder.
(f) No Liability for Interest. Unless otherwise agreed with the
-------------------------
Company, the Warrant Agent shall have no liability for interest on any monies at
any time received by it pursuant to any of the provisions of this Agreement or
of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have no
---------------------------
liability with respect to any invalidity of this Agreement or any of the Warrant
Certificates (except as to the Warrant Agent's countersignature thereon).
(h) No Responsibility for Representations. The Warrant Agent shall
-------------------------------------
not be responsible for any of the recitals or representations herein or in the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
----------------------
perform only such duties as are specifically set forth herein and in the Warrant
Certificates and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder likely to
involve it in any expense or liability, the payment of which within a reasonable
time is not, in its reasonable opinion, assured to it. The Warrant Agent shall
not be accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates authenticated by the Warrant Agent
and delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by the
Company in the performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any written demand
from a holder of a Warrant Certificate with respect to such default, including,
without limitation, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided in Section
6.2, to make any demand upon the Company. This Section 5.2(i) shall not be
construed to relieve the Warrant Agent from liability for its own negligent
action, failure to act or willful misconduct.
SECTION 5.3. Resignation and Appointment of Successor.
----------------------------------------
(a) The Company agrees, for the benefit of the holders from time to
time of the Warrant Certificates, that there shall at all times be a Warrant
Agent hereunder until all the Warrants have been exercised or are no longer
exercisable.
- 13 -
<PAGE>
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective; provided, however, that
-------- -------
such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the Company by the filing with the
Warrant Agent of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when it shall be come effective. Any
such resignation or removal shall take effect upon the appointment by the
Company, as provided below, of a successor Warrant Agent (which shall be a bank
or trust company authorized under the laws of the jurisdiction of its
organization to exercise corporate trust powers) and the acceptance of such
appointment by such successor Warrant Agent. The obligation of the Company
under Section 5.2(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) If at any time the Warrant Agent shall resign, shall be removed,
shall become incapable of acting, shall be adjudged a bankrupt or insolvent,
shall commence a voluntary case under the Federal bankruptcy laws as now or
hereafter constituted or under any other applicable Federal or State bankruptcy,
insolvency or similar law, shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Warrant Agent or its property or affairs,
shall make an assignment for the benefit of creditors, shall admit in writing
its inability to pay its debts generally as they become due or shall take
corporate action in furtherance of any such actions, a decree or order for
relief by a court having jurisdiction in the premises shall have been entered in
respect of the Warrant Agent in an involuntary case under the Federal bankruptcy
laws as now or hereafter constituted or any other applicable Federal or State
bankruptcy, insolvency or similar law, a decree or order by a court having
jurisdiction in the premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar
official) of the Warrant Agent or of its property or affairs or any public
officer shall take charge or control of the Warrant Agent or of its property or
affairs for the purpose of rehabilitation, conservation, winding up or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment of such a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the Warrant Agent
shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act,
- 14 -
<PAGE>
deed or conveyance, shall become vested with all the authority, rights, powers,
trusts, immunities, duties and obligations of such predecessor with like effect
as if originally named as Warrant Agent hereunder, and such predecessor, upon
payment of its charges and disbursements then unpaid, shall thereupon become
obligated to transfer, deliver and pay over, and such successor Warrant Agent
shall be entitled to receive, all monies, securities and other property on
deposit with or held by such predecessor as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets or business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Amendment. This Warrant Agreement may be amended by the
---------
parties hereto for any reason with the consent of the holders of not less than a
majority of the then outstanding unexercised Warrants. Notwithstanding the
foregoing, this Agreement may be amended by the parties hereto, without the
consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, curing, correcting or supplementing any defective provision contained
herein or making any other provisions with respect to matters or questions
arising under this Agreement as the Company and the Warrant Agent may deem
necessary or desirable; provided, however, that such action shall not have a
-------- -------
material adverse effect on the interests of the holders of the Warrant
Certificates.
SECTION 6.2. Notices and Demands to the Company and Warrant Agent.
----------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the Company
or the Warrant Agent by the holder of a Warrant Certificate pursuant to the
provisions of the Warrant Certificates, the Warrant Agent shall promptly forward
a copy of such notice or demand to the Company.
SECTION 6.3. Addresses. Any communication from the Company to the
---------
Warrant Agent with respect to this Agreement shall be addressed to [Warrant
Agent], _________________, Attention: ________________ and any communication
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to
- 15 -
<PAGE>
Tele-Communications, Inc., 5619 DTC Parkway, Englewood, Colorado 80111,
Attention: ________________ (or such other address as shall be specified in
writing to the other party by the Warrant Agent or the Company).
SECTION 6.4. Notices to Holders of Warrant Certificates. Any notice
------------------------------------------
to holders of Warrant Certificates which by any provisions of this warrant
Agreement is required or permitted to be given shall be given by first class
mail, postage prepaid, to such holder's address as it appears on the books of
the Warrant Agent.
SECTION 6.5. Applicable Law. the validity, interpretation and
--------------
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of ________.
SECTION 6.6. Delivery of Prospectus. The Company shall furnish to
----------------------
the Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of the Warrants (the "Prospectus"), and
upon the exercise of any Warrant, the Warrant Agent shall deliver to the holder
of the Warrant Certificate evidencing such Warrant, prior to or currently with
the delivery of the Warrant Securities issued upon such exercise, a Prospectus.
The Warrant Agent shall not, by reason of any such delivery, assume any
responsibility for the accuracy or adequacy of such Prospectus other than with
respect to information provided by the Warrant Agent to the Company expressly
for use therein.
SECTION 6.7. Obtaining of Governmental Approvals. The Company shall
-----------------------------------
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of, and filings with,
governmental agencies and authorities under U.S. Federal and State laws
(including, without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be required in connection with the issuance, sale, transfer and
delivery of the Warrant Securities issued upon exercise of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and
delivery of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
SECTION 6.8. Persons Having Rights under Warrant Agreement. Nothing
---------------------------------------------
in this Agreement express or implied and nothing that may be inferred from any
of the provisions hereof is intended or shall be construed to confer upon or
give to any person or corporation other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof. All covenants, conditions, stipulations, promises and
agreements contained in this Agreement
- 16 -
<PAGE>
shall be for the sole and exclusive benefit of the Company and the Warrant Agent
and their successors and of the holders of the Warrant Certificates.
SECTION 6.9. Successors and Assigns; Benefits of Agreement. All
---------------------------------------------
covenants and agreements of the parties hereto under this Warrant Agreement
shall bind their respective successors and assigns, whether or not so expressed
herein. Nothing contained in this Agreement or in the Warrant Certificates,
express or implied, shall give to any person, other than the parties hereto and
their successors and assigns and the holders from time to time of the Warrants,
any benefits or any legal or equitable right, remedy or claim under this
Agreement.
SECTION 6.10. Severability. If any provision of this Warrant
------------
Agreement or of the Warrants shall be determined to be invalid, illegal or
unenforceable, such determination shall not in any way affect or impair the
validity, legality or enforceability of the remaining provisions hereof or
thereof.
SECTION 6.11. Headings. The descriptive headings of the several
--------
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning of construction of any of the provisions
hereof.
SECTION 6.12. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which as so executed shall be deemed to be an
original, and such counterparts shall together constitute one and the same
instrument.
SECTION 6.13. Inspection of Agreement. A copy of this Agreement
-----------------------
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent or at ________, ________, __________, for inspection
by the holder of any Warrant Certificate. The Warrant Agent may require such
holder to submit his Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, Tele-Communications, Inc. and [Warrant Agent] have
caused this Agreement to be signed and attested by their respective duly
authorized officers and their respective corporate seals to be affixed hereunto
as of the day and year first written above.
TELE-COMMUNICATIONS, INC.
By:_________________________
Name:
Title:
Attest:
- -------------------------
- 17 -
<PAGE>
Name:
Title:
[WARRANT AGENT]
By:_________________________
Name:
Title:
Attest:
- -------------------------
Name:
Title:
- 18 -
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[Form of Legend if Offered Securities Prior to ____________, ____, this
and Warrants are not immediately Warrant Certificate cannot be
detachable: transferred or exchanged unless
attached to a [title of Offered
Securities].]
[Form of Legend if Warrants are not Prior to ____________, ____, Warrants
immediately exercisable: evidenced by this Warrant Certificate
cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
TELE-COMMUNICATIONS, INC.
WARRANTS TO PURCHASE
[TITLE OF WARRANT SECURITIES]
VOID AFTER 5:00 P.M., NEW YORK CITY TIME,
ON ________________, ________
No.________ ________ Warrants
This certifies that ___________________ or registered assigns is the
registered owner of the above-indicated number of Warrants, each Warrant
entitling such owner [IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND
---------------------------------------------------------
ARE NOT IMMEDIATELY DETACHABLE: , subject to the registered owner
- ------------------------------
qualifying as a "holder" of this Warrant Certificate as defined below,] to
purchase, at any time [after 5:00 P.M., New york City time, on ________________,
_____, and] on or before 5:00 P.M., New York City time, on ________________,
_____, _____________ shares of [title of Warrant Securities] (the "Warrant
Securities"), of Tele-Communications, Inc. (the "Company") on the following
basis: [during the period from ________________, ____ through and including
______________, ____, the exercise price of each Warrant shall be
$_______________; during the period from ___________, ____ through and including
___________, ____ the exercise price of each shall be $_______ (the "Warrant
Price"). [The Warrant Price shall be subject to reduction as set forth in the
Warrant Agreement (as defined below).]
The holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full in lawful money
of the United States of America, in cash or by certified check or official bank
check or by bank wire
A-1
<PAGE>
transfer, in each case in immediately available funds, the Warrant Price for
each Warrant exercised to the Warrant Agent (as defined below) and by
surrendering this Warrant Certificate within five business days of such payment,
with the purchase form on the back hereof duly executed, at the corporate trust
office of [Warrant Agent], or its successor as warrant agent (the "Warrant
Agent"), or ___________, currently at the address specified on the reverse
hereof, and upon compliance with and subject to the conditions set forth herein
and in the Warrant Agreement.
The term "holder" as used herein shall mean [IF WARRANTS ARE SOLD IN UNITS
-----------------------------
WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE: , prior to
- ----------------------------------------------------------
______________, ____ (the "Detachable Date"), the registered owner of the
Company's [title of Offered Securities] to which this Warrant Certificate is
initially attached, and after such Detachable Date,] the person in whose name at
the time this Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose pursuant to Section 4.1 of the
Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form. Upon any exercise
of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement, dated as of ________________, 199_ (the "Warrant Agreement"), between
the Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent
[and at _______, ____________, _____________].
[IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE NOT
-----------------------------------------------------------------
IMMEDIATELY DETACHABLE: Prior to ____________, _____, this Warrant Certificate
- ----------------------
may only be exchanged or transferred together with the [title of Offered
Securities] ("Offered Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting or in conjunction with
an exchange or transfer of such Offered Securities. After such date, this] [IF
--
WARRANTS ARE IMMEDIATELY DETACHABLE OR ISSUED ALONE: Transfer of this] Warrant
- ---------------------------------------------------
Certificate may be registered when this Warrant Certificate is surrendered at
the corporate trust office of the Warrant Agent [or at ________, _____________,
___________] by the registered owner or his assigns, in person or by an attorney
duly authorized in writing, in the manner and subject to the limitations
provided in provided in the Warrant Agreement.
A-2
<PAGE>
[IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY
-----------------------------------------------------------------------------
DETACHABLE: Except as provided in the immediately preceding paragraph, after]
- ----------
[IF WARRANTS ARE IMMEDIATELY DETACHABLE OR ISSUED ALONE: After]
- -------------------------------------------------------
countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent [or at ________, _________, _______] for
Warrant Certificates representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of the Warrant Securities, including, without limitation, the
right to receive payments of dividends or distributions, if any, on the Warrant
Securities or to exercise any voting rights.
This Warrant Certificate shall not be valid or obligatory for any purpose
until countersigned by the Warrant Agent.
Dated as of________________ TELE-COMMUNICATIONS, INC.
By:_________________________
Name:
Title:
Attest:
- ------------------------------
Countersigned:
[WARRANT AGENT]
As Warrant Agent
By:___________________________
Authorized Signature
A-3
<PAGE>
[REVERSE OF WARRANT CERTIFICATE]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay in lawful
money of the United States of America, in cash or by certified check or official
bank check or by bank wire transfer, in each case in immediately available
funds, the Warrant Price in full for Warrants exercised to [Warrant Agent],
[Corporate Trust Department] [insert address of Warrant Agent], Attention:
________________, which payment must specify the name of the holder and the
number of Warrants exercised by such holder. In addition, the holder must
complete the information required below and present this Warrant Certificate in
person or by mail (certified or registered mail is recommended) to the Warrant
Agent at the appropriate address set forth below. This Warrant Certificate,
completed and duly executed, must be received by the Warrant Agent within five
business days of the payment.
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise _____________
Warrants, evidenced by this Warrant Certificate, to purchase ________ shares of
the [title of Warrant Securities] (the "Warrant Securities") of Tele-
Communications, Inc. and represents that he has tendered payment for such
Warrant Securities in lawful money of the United States of America, in cash or
by certified check or official bank check or by bank wire transfer, in each case
in immediately available funds to the order of Tele-Communications, Inc. c/o
[insert name and address of Warrant Agent], in the amount of $_____________ in
accordance with the terms hereof. The undersigned requests that said number of
shares of Warrant Securities be registered in such names and delivered all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
A-4
<PAGE>
Dated:________________________ Name:____________________________
______________________________ Address:_________________________
(Insert Social Security or
other Identifying Number of _________________________
Holder)
Signature Guaranteed: Signature: _____________________
(Signature must conform
______________________________ in all respects to name
of holder as specified on
the face of this Warrant
Certificate and must bear
a signature guarantee by
a bank, trust company or
member broker of the New
York, Midwest or Pacific
Stock Exchange)
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at: ________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
By mail at: ________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
A-5
<PAGE>
ASSIGNMENT
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrant Evidenced Hereby]
FOR VALUE RECEIVED ______________________________________
hereby sells, assigns and transfers unto
______________________________ _______________________________________
(Please print name) (Please insert social security or other
identifying number)
______________________________
(Address)
______________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _____________________ its Attorney to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.
Dated:________________
______________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Warrant Certificate and must bear a
signature guarantee by a bank, trust company
or member broker of the New York, Midwest or
Pacific Stock Exchange)
Signature Guaranteed:
________________________
A-6
<PAGE>
EXHIBIT 4.4
================================================================================
TELE-COMMUNICATIONS, INC.
AND
[WARRANT AGENT]
AS WARRANT AGENT
--------------------
WARRANT AGREEMENT -- COMMON STOCK
DATED AS OF _____________, 199_
--------------------
================================================================================
<PAGE>
TELE-COMMUNICATIONS, INC.
Form of Common Stock Warrant Agreement*
THIS WARRANT AGREEMENT, dated as of ________, 199_, between TELE-
COMMUNICATIONS, INC., a Delaware corporation (the "Company") and [WARRANT
AGENT], as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company proposes to sell [IF WARRANTS ARE SOLD IN UNITS
-----------------------------
WITH PREFERRED STOCK OR COMMON STOCK: [title of preferred stock being offered]
- ------------------------------------
[title of common stock being offered] (the "Offered Securities") with] warrant
certificates evidencing one or more warrants (the "Warrants" or individually a
"Warrant"), representing the right to purchase _____ shares of the Company's
[title of common stock issuable upon exercise of Warrants] (the "Common Stock");
such Common Stock issuable upon exercise of a Warrant or Warrants is referred to
herein as the "Warrant Securities"), such warrant certificates and other warrant
certificates issued pursuant to this Agreement being referred to herein as the
"Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.1. Issuance of Warrants. [IF WARRANTS ALONE: Upon
-------------------- ------------------
issuance, each Warrant Certificate shall evidence one or more Warrants] [IF
---
WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES: Warrants shall be
- --------------------------------------------------
[initially] issued in units with the Offered Securities [but shall be separately
transferable on and after __________________, 199_ (the "Detachable Date")] [and
shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants. Each Warrant Certificate included
- ----------
* Complete or modify the provisions of this Form as appropriate to reflect
the terms of the Warrants, Warrant Securities and Offered Securities.
<PAGE>
in such unit shall evidence _____ Warrants for each _____ shares of Offered
Securities included in such unit.] [Each Warrant shall represent initially the
right, subject to the provisions contained herein and therein, to purchase _____
shares of Warrant Securities.]
SECTION 1.2. Execution and Delivery of Warrant Certificates. Each
----------------------------------------------
Warrant Certificate, whenever issued, shall be in registered form substantially
in the form set forth in Exhibit A, shall be dated ________, 199_, 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
officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law, rule
or regulation or with any rule or regulation of any stock exchange or inter-
dealer quotation system on which the Warrants may be listed or to conform to
usage. The Warrant Certificates shall be executed on behalf of the Company by
the Chairman of the Board, the President, any Vice Chairman, any Executive Vice
President or any Senior Vice President and by its Secretary or any Assistant
Secretary under its corporate seal reproduced thereon. Such signatures may be
manual or facsimile signatures of such authorized officers and may be imprinted
or otherwise reproduced on the Warrant Certificates. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
If any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be an
officer before the Warrant Certificates so signed shall have been countersigned
and delivered by the Warrant Agent, such Warrant Certificates may be
countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such an officer of the Company. Any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant
- 2 -
<PAGE>
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose] [IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES
-----------------------------------------------------
AND ARE NOT IMMEDIATELY DETACHABLE: or upon the register of the Offered
- ----------------------------------
Securities prior to the Detachable Date. Prior to the Detachable Date, the
Company shall, or shall cause the registrar of the Offered Securities to, make
available at all times to the Warrant Agent such information as to holders of
the Offered Securities with Warrants as may be necessary to keep the Warrant
Agent's records up to date].
SECTION 1.3. Issuance of Warrant Certificates. Warrant Certificates
--------------------------------
evidencing the right to purchase not more than _____ shares of Warrant
Securities (except as provided in Section 1.4, 2.3(c), 4.2 and 5.1) may be
executed by the Company and delivered to the Warrant Agent upon the execution of
this Warrant Agreement or from time to time thereafter. The Warrant Agent
shall, upon receipt of Warrant Certificates duly executed on behalf of the
Company, countersign Warrant Certificates evidencing Warrants representing the
right to purchase up to _____ shares of Warrant Securities (subject to
adjustment as aforesaid) and shall deliver such Warrant Certificates to or upon
the order of the Company. Subsequent to such original issuance of the Warrant
Certificates, the Warrant Agent shall countersign a Warrant Certificate only if
the Warrant Certificate is issued in exchange or substitution for one or more
previously countersigned Warrant Certificates, upon the partial exercise of a
warrant evidenced by a Warrant Certificate or in connection with their transfer
as provided in Section 2.3(c) or Article IV.
SECTION 1.4. Temporary Warrant Certificate. Pending the preparation
-----------------------------
of definitive Warrant Certificates, the Company may execute, and, upon the order
of the Company, the Warrant Agent shall authenticate and deliver, temporary
Warrant Certificates that are printed, lithographed, typewritten, mimeographed
or otherwise produced substantially of the tenor of the definitive Warrant
Certificate in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificates may determine, as evidenced by their
execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company shall cause
definitive Warrant Certificates to be prepared without unreasonable delay.
After the preparation of definitive Warrant Certificates, the temporary Warrant
Certificates shall be exchangeable for definitive Warrant Certificates upon
surrender of the temporary Warrant Certificates at the corporate trust office of
the Warrant Agent [or at _____, _____, _____], without charge to the holder.
Upon surrender for cancellation of any one or more temporary Warrant
Certificates, the Company shall execute and the Warrant Agent shall authenticate
and deliver in exchange therefor definitive Warrant Certificates representing
the same aggregate
- 3 -
<PAGE>
number of Warrants. Until so exchanged, the temporary Warrant Certificates
shall in all respects be entitled to the same benefits under this Agreement as
definitive Warrant Certificates.
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.1. Warrant Price. (a) [During the period from ________,
-------------
_______ through and including ________________, _______] [T]he exercise price of
each Warrant shall be $_____________, subject to adjustment as provided in
Section 3.1.] [During the period from ___________________, _____ through and
including _____________, _____, the exercise price of each Warrant shall be
$________, subject to adjustment as provided in Section 3.1.] The applicable
exercise price of the Warrants is referred to in this Agreement as the "Warrant
Price." No adjustment shall be made for any dividends on any Warrant Securities
issuable upon exercise of any Warrant.
(b) Notwithstanding any provision in this Agreement to the contrary,
the Company may at its option, at any time during the term of the Warrants, for
a period not less than 15 days, reduce the then Warrant Price by an amount
deemed appropriate by the Board of Directors of the Company. Such increase or
reduction shall be effective only with respect to Warrants exercised during such
period.
Upon any such reduction of the Warrant Price, the Company shall give
prompt written notice of such adjustment to the Warrant Agent and the Warrant
Agent shall, on behalf of and at the expense of the Company, promptly, and in
any case within 10 days after receiving notice of such adjustment, mail by first
class mail, postage prepaid, to each holder, such notice prepared by the Company
of such adjustment. The Warrant Agent shall exhibit the notice, from time to
time, to any holder desiring an inspection thereof during reasonable business
hours. The Warrant Agent shall be entitled to rely on such notice and, except
as set forth herein, shall be under no duty or responsibility with respect to
any such notice.
(c) Warrants may be exercised by the holders thereof at any time at
the Warrant Price then in effect when the Warrant Securities are registered
pursuant to an effective registration statement under the Securities Act.
Warrants shall in no event be exercisable for the purchase of Warrant Securities
at any time when such Warrant Securities are not registered pursuant to an
effective registration statement under the Securities Act. The Company shall
promptly give all holders of Warrants notice of the effectiveness of a
registration statement in respect of Warrant Securities and of
- 4 -
<PAGE>
any subsequent lapses in the effectiveness of such registration statement.
SECTION 2.2. Duration of Warrants. Each Warrant may be exercised in
--------------------
whole at any time, as specified herein, on or after [the date thereof]
[________, ____,] and at or before 5:00 P.M., New York City time, on ________,
____, or such later date as the Company may designate, by notice to the Warrant
Agent and the holders of Warrant Certificates mailed to their addresses as set
forth in the record books of the Warrant Agent (the "Expiration Date"). Each
Warrant not exercised at or before 5:00 P.M., New York City time, on the
Expiration Date shall become void, and all rights of the holder of the Warrant
Certificates evidencing such Warrant under this Agreement shall cease.
SECTION 2.3. Exercise of Warrants. (a) During the period specified
--------------------
in Section 2.2, any whole number of Warrants may be exercised by providing
certain information as set forth on the reverse side of the Warrant Certificate
and by paying in full, in lawful money of the United States of America, in cash
or by certified check or official bank check or by bank wire transfer, in each
case in immediately available funds, the Warrant Price for each Warrant
exercised to the Warrant Agent at its corporate trust office [or at _________,
________, ________], provided that such exercise is subject to receipt within
five business days of such payment by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities set forth
on the reverse side of the Warrant Certificate properly completed and duly
executed. The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised. If,
pursuant to the immediately preceding sentence, the Warrant shall be deemed to
be exercised on a date after the Expiration Date, the exercise thereof shall be
null and void and such payment returned to the holder thereof as promptly as
practicable. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of the Company maintained with it and
shall advise the Company by telephone at the end of each day on which a payment
for the exercise of Warrants is received of the amount so deposited to its
account. The Warrant Agent shall promptly confirm such telephone advice to the
Company in writing. If the Warrant Agent does not receive the Warrant
Certificate within five business days after such payment, upon the written
request of the holder and after notice to the Company, the Warrant Agent may
repay the Warrant price to the holder by withdrawing from the Company's account
the funds received from the holder.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to
- 5 -
<PAGE>
delivery of the Warrant Securities to which such holder is entitled upon such
exercise, (iii) delivery of Warrant Certificates evidencing the balance, if any,
of the Warrants remaining after such exercise, and (iv) such other information
as the Company shall reasonably require.
(c) As promptly as practicable after the exercise of any Warrant, the
Company shall issue in authorized denominations to or upon the order of the
holder of the Warrant Certificate evidencing such Warrant, the Warrant
Securities to which such holder is entitled, in fully registered form,
registered in such name or names as may be directed by such holder. If fewer
than all of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, a new Warrant Certificate evidencing the
number of such Warrants remaining unexercised.
(d) The Company shall not be required to pay any stamp or other tax
or other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities, and if any such transfer is
involved, the Company shall not be required to issue or deliver any Warrant
Security until such tax or other charge shall have been paid or it has been
established to the Company's satisfaction that no such tax or other charge is
due.
SECTION 2.4. No Fractional Shares to Be Issued. Notwithstanding
---------------------------------
anything to the contrary contained in this Agreement, if the number of shares of
Common Stock purchasable on the exercise of each Warrant is not a whole number,
the Company shall not be required to issue any fraction of a share of Common
Stock, to distribute stock certificates that evidence fractional shares of
Common Stock or to issue a Warrant Certificate representing a fractional Warrant
upon exercise of any Warrants. If Warrant Certificates evidencing more than one
Warrant shall be surrendered for exercise at one time by the same holder, the
number of full shares which shall be issuable upon exercise thereof shall be
computed on the basis of the aggregate number of Warrants so surrendered. If
any fraction of a share of Common Stock would, except for the provisions of this
Section 2.4, be issuable on the exercise of any Warrant, the Company shall
purchase such fraction for an amount in cash equal to such fraction of the then
current market price (as defined in Section 3.1(d) of a share of Common Stock
for the Trading Day immediately preceding the date on which such Warrant was
exercised. The Warrantholders, by their acceptance of the Warrant Certificates,
expressly waive their right to receive a stock certificate or Warrant
Certificate representing a fraction of a share of Common Stock or a fraction of
a Warrant respectively.
- 6 -
<PAGE>
SECTION 2.5. Covenant to Reserve Shares for Issuance on Exercise.
---------------------------------------------------
The Company covenants that it shall at all times reserve and keep available out
of its authorized but unissued Common Stock, solely for the purpose of issue
upon exercise of Warrants, the full number of shares of Common Stock, if any,
then issuable if all outstanding Warrants then exercisable were to be exercised.
The Company covenants that all shares of Common Stock which shall be
so issuable shall be duly and validly issued, fully paid and nonassessable.
Before taking any action that would cause the Warrant Price to be adjusted below
the then par value of any of the shares of Warrant Securities issuable upon
exercise of the Warrants, the Company shall take any corporate action that may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Warrant
Securities at such adjusted Warrant Price.
The Company hereby authorizes and directs its current and future
transfer agents for the Common Stock and for any shares of the Company's capital
stock issuable upon the exercise of any of the Warrants at all times to reserve
such number of authorized shares as shall be requisite for such purpose. The
Company shall supply such transfer agents with duly executed stock certificates
for such purposes and shall provide or otherwise make available any cash which
may be payable as provided in this Article II.
SECTION 2.6. Compliance with Governmental Requirements. Subject to
-----------------------------------------
Section 3.1(b), the Company covenants that if any Warrant Securities are
required to be reserved for purposes of exercise of Warrants require, under any
applicable Federal or State law, rule or regulation or any rule or regulation of
any national securities exchange or inter-dealer quotation system, registration
with or approval of any such governmental authority or listing on any such
national securities exchange before such shares may be issued upon exercise, the
Company shall in good faith and as promptly as practicable endeavor to cause
such shares to be duly registered, approved or listed, as the case may be;
provided, however, that in no event shall such Warrant Securities be issued, and
- -------- -------
the Company is hereby authorized to suspend the exercise of all Warrants, for
the period during which such registration, approval or listing is required but
not in effect.
- 7 -
<PAGE>
ARTICLE III
ADJUSTMENT OF WARRANT PRICE AND SHARES
OF COMMON STOCK PURCHASABLE
Section 3.1. Adjustment of Warrant Price. The Warrant Price
---------------------------
specified in Section 2.1, and the number and type of securities issuable upon
exercise of a Warrant, shall be subject to adjustment from time to time as
follows:
(a) If the Company shall (i) pay a dividend or make a distribution on
the Warrant Securities in shares of Warrant Securities, (ii) subdivide the
outstanding Warrant Securities into a greater number of shares, (iii) combine
the outstanding Warrant Securities into a smaller number of shares, (iv) pay a
dividend or make a distribution on the Warrant Securities in capital stock of
the Company other than Warrant Securities or (v) issue by reclassification of
its shares of Warrant Securities any shares of its capital stock, then the
Warrant Price and the kind of shares of capital stock purchasable upon exercise
of a Warrant shall be adjusted so that the holder of any Warrant thereafter
surrendered for exercise shall be entitled to receive the number of shares of
Warrant Securities (or other capital stock of the Company) which it would have
owned or have been entitled to receive after the happening of any of the events
described above had such Warrant been exercised (i), in the case of a dividend
or distribution, immediately prior to the record date for the determination of
holders of Warrant Securities entitled to receive such dividend or distribution
or (ii) in the case of a subdivision, combination or reclassification, on the
effective date of such subdivision, combination or reclassification. An
adjustment made pursuant to this Section 3.1(a) shall become effective
immediately after such record date in the case of a dividend or distribution,
except as provided in Section 3.1(h), and shall become effective immediately
after the effective date in the case of a subdivision, combination or
reclassification.
Any shares of Warrant Securities issuable in payment of a dividend or
distribution shall be deemed to have been issued immediately prior to the record
date for the determination of holders of Warrant Securities entitled to receive
such dividend or distribution for purposes of calculating the number of
outstanding shares of Warrant Securities for purposes of Section 3.1(b).
If after an adjustment made pursuant to this Section 3.1(a) the holder
of a Warrant would, upon exercise thereof, be entitled to receive shares of two
or more classes of capital stock of the Company, then the Warrant Price, and the
type of securities issuable upon exercise of such Warrant, shall be subject to
adjustment in respect of each such class of capital stock in a manner and on
terms as nearly as equivalent as practicable to the provisions set forth in this
Article III (which manner and terms
- 8 -
<PAGE>
shall be determinated by the Board of Directors of the Company, which
determination shall be conclusive).
(b) If the Company shall distribute rights, warrants or options to all
holders of outstanding shares of Warrant Securities entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe for
or purchase shares of Warrant Securities (or options, warrants, securities or
rights which are convertible into or exercisable or exchangeable for Warrant
Securities at the option of the holder thereof, or which otherwise entitle the
holder to subscribe for, purchase or otherwise acquire Warrant Securities
("Convertible Securities")) at a price per share (or having a conversion or
exercise price per share, after adding thereto an allocable portion of the
exercise price of the right, warrant or option to purchase such Convertible
Securities, computed on the basis of the maximum number of shares of Warrant
Securities issuable upon conversion of such Convertible Securities) less than
the current market price (as defined in Section 3.1(e)) at the record date for
the determination of stockholders entitled to receive such rights, warrants or
options, the Warrant Price in effect after such record date shall be adjusted to
the number determined by multiplying the Warrant Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Warrant Securities outstanding on such record date plus the
number of shares of Warrant Securities which the aggregate offering price of the
total number of shares of Warrant Securities so offered (or the aggregate
conversion price or exercise price of the Convertible Securities to be so
offered, after adding thereto the aggregate exercise price of the rights,
warrants or options to purchase such Convertible Securities) would purchase at
such current market price, and the denominator of which shall be the number of
shares of Warrant Securities outstanding on such record date plus the number of
additional shares of Warrant Securities so offered for subscription or purchase
(or into which the Convertible Securities so offered are convertible). Warrant
Securities held by or held for the account of the Company or any majority-owned
subsidiary of the Company shall not be deemed outstanding for the purpose of any
such adjustment.
For purposes of this Section 3.1(b), the number of shares of Warrant
Securities outstanding on any record date shall be deemed to include the maximum
number of shares of Warrant Securities the issuance of which would be necessary
to effect the full exercise, exchange or conversion of all Convertible
Securities outstanding on such record date which are then exercisable,
exchangeable or convertible at a price (before giving effect to any adjustment
to such price for the distribution to which this paragraph 3.1(b) is being
applied) equal to or less than the current market price per share of the Warrant
Securities, if all of such Convertible Securities were deemed to have been
exercised,
- 9 -
<PAGE>
exchanged or converted immediately prior to the opening of business on such
record date.
The foregoing adjustment shall be made successively whenever any such
rights, warrants or options are issued and shall become effective, except as
provided in Section 3.1(h), at the opening of business on the business day next
following the record date for determination of stockholders entitled to receive
such rights, warrants or options. If all of the shares of Warrant Securities
(or all of the Convertible Securities) subject to such rights, warrants or
options have not been issued when such rights, warrants or options expire (or,
in the case of rights, warrants or options to purchase Convertible Securities
which have been exercised, all of the shares of Warrant Securities issuable upon
conversion or exercise of such Convertible Securities have not been issued prior
to the expiration of the conversion or exercise right thereof), then the Warrant
Price shall promptly be readjusted to the Warrant Price which would then be in
effect had the adjustment upon the issuance of such rights, warrants or options
been made on the basis of the actual number of shares of Warrant Securities (or
Convertible Securities) issued upon the exercise of such rights, warrants or
options (or the conversion or exercise of such Convertible Securities).
(c) If the Company shall distribute to all holders of outstanding
shares of Warrant Securities any assets or debt securities or any warrants,
rights or options to purchase securities (excluding (x) dividends or
distributions referred to in Section 3.1(a), (y) rights, warrants and options
referred to in Section 3.1(b) and (z) cash dividends or other cash
distributions, unless such cash dividends or cash distributions are
Extraordinary Cash Dividends (as defined below)), the Warrant Price shall be
adjusted by multiplying the Warrant Price in effect immediately prior to the
record date for the determination of holders of Warrant Securities entitled to
receive such distribution by a fraction, the numerator of which shall be the
current market price (as defined in Section 3.1(e)) per share of the Warrant
Securities on such record date less either (i) the fair market value (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive) on such record date of the assets, debt securities, rights,
warrants or options so distributed to the holders of Warrant Securities
allocable to one share of Warrant Securities or (y), if applicable, the amount
of the Extraordinary Cash Dividends distributed per share of Warrant Securities,
and the denominator of which shall be the current market price per share of the
Warrant Securities on such record date.
As used in this Section 3.1(c), the term "Extraordinary Cash
Dividends" means, with respect to any consecutive 12-month period, all cash
dividends and cash distributions on the outstanding shares of the Warrant
Securities during such period
- 10 -
<PAGE>
(other than cash dividends or distributions for which a prior adjustment to the
Warrant Price was previously made) to the extent such dividends and
distributions exceed, on a per share of Warrant Securities basis, [10]% of the
current market price of the Warrant Securities over such period.
The foregoing adjustment shall be made successively whenever any such
distribution is made, and shall become effective at the opening of business on
the business day next following the record date for the determination of
stockholders entitled to receive such distribution.
(d) For the purposes of any computation under Section 3.1(b) or the
first paragraph of Section 3.1(c), the current market price per share of the
Warrant Securities at the date specified therein shall be deemed to be the
average of the reported last sales prices for the [30] consecutive Trading Days
(as defined below) commencing [40] Trading Days before the date in question.
For the purpose of any the definition "Extraordinary Cash Dividends" in Section
3.1(c), the current market price per share of the Warrant Securities as of the
date of determination shall be deemed to be the average of the reported last
sales price for each Trading Days during the 12 month period specified therein.
The reported last sales price for each day (whether for purposes of Section
3.1(b) or 3.1(c)) shall be the reported last sales price, regular way, or, in
case no sale takes place on such day, the average of the reported closing bid
and asked prices, regular way, in either case as reported on the New York Stock
Exchange Composite Tape or, if the Warrant Securities are not listed or admitted
to trading on the New York Stock Exchange at such time, on the principal
national securities exchange on which such security is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the National Nasdaq Market or, if such security is not quoted on
such National Market, the average of the closing bid and asked prices on such
day in the over-the-counter market as reported by Nasdaq or, if bid and asked
prices for the security on each such day shall not have been reported through
Nasdaq, the average of the bid and asked prices for such date as furnished by
any New York Stock Exchange member firm regularly making a market in such
security selected for such purpose by the Board of Directors of the Company or a
committee thereof or, if no such quotations are available, the fair market value
of such security as determined by the Board of Directors of the Company or a
committee thereof (whose determination shall be conclusive). As used herein,
the term "Trading Day" means a day on which the New York Stock Exchange, each
national stock exchange on which the Warranty Securities are listed and the
Nasdaq National Market are open for business.
(e) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in such Warrant
Price; provided, however, that any
-------- -------
- 11 -
<PAGE>
adjustments which by reason of this Section 3.1(e) are not required to be made
shall be carried forward and taken into account in any later adjustment. All
calculations under this Article III shall be made to the nearest cent or to the
nearest .01 of a share, as the case may be, with one-half cent and .005 of a
share, respectively, being rounded upward. Notwithstanding anything in this
Article III to the contrary, the Company shall be entitled to make such
reductions in the Warrant Price, in addition to those required by this Section
3.1, as it shall in its discretion determine to be advisable in order that any
stock dividend, subdivision of shares, distribution of rights or warrants to
purchase stock or securities or distribution of other assets (other than cash
dividends) hereafter made by the Company to its stockholders shall not be
taxable.
(f) Whenever the Warrant Price is adjusted as provided herein, the
Company shall file with the Warrant Agent a certificate, signed by the Chairman
of the Board, the President, any Vice Chairman, any Executive Vice President or
any Senior Vice President and by its Secretary or any Assistant Secretary,
setting forth the Warrant Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment, which certificate shall be
conclusive evidence of the correctness of such adjustments; provided, however,
-------- -------
that the failure of the Company to file such officer's certificate shall not
invalidate any corporate action by the Company.
(g) If this Article III provides that an adjustment shall become
effective immediately after a record date for an event, the Company may defer
until the occurrence of such event (y) issuing to the holder of any Warrant
converted after such record date and before the occurrence of such event the
additional shares of Warrant Securities or other capital stock issuable upon
such exercise by reason of the adjustment required by such event over and above
the Warrant Securities issuable upon such exercise before giving effect to such
adjustment and (z) paying to such holder any amount of cash in lieu of any
fractional share.
(h) Whenever the Warrant Price is adjusted as provided in this Article
III, as promptly as practicable thereafter the Company shall cause to be mailed
to each holder of Warrants at its then registered address by first-class mail,
postage prepaid, a notice of such adjustment of the Warrant Price setting forth
such adjusted Warrant Price and the effective date of such adjusted Warrant
Price; provided, however, that the failure of the Company to give such notice
-------- -------
shall not invalidate any corporate action by the Company.
Section 3.2. Adjustment of Shares of Warrant Securities Purchasable
------------------------------------------------------
Upon Exercise of Warrants. The number of Warrant Securities that may be
- -------------------------
purchased upon exercise of a Warrant shall be determined by multiplying the
number of shares of Warrant
- 12 -
<PAGE>
Securities which would otherwise, but for the provisions of this Section 3.2, be
issuable upon such exercise by a fraction, the numerator of which is
____________ and the denominator of which is $________, minus deductions made
from (and/or plus additions to) the Warrant Price pursuant to Section 3.1(a),
3.1(b) or 3.1(c). The Warrant Price per share of Warrant Securities shall be
adjusted and readjusted from time to time as provided in this Article III and,
as so adjusted or readjusted, shall remain in effect until a further adjustment
or readjustment thereof is required by this Article III.
Section 3.3. Statements on Warrants. The form of Warrant Certificate
----------------------
need not be changed because of any adjustment made pursuant to this Article III,
and Warrant Certificates issued after such adjustment may state the same Warrant
Price and the same number of shares of Warrant Securities as are stated in the
Warrant Certificates initially issued pursuant to this Agreement; provided,
--------
however, that the Company may at any time, in its sole discretion, make any
- -------
change in the form of Warrant Certificate that it may deem appropriate and that
does not affect the substance thereof, and any Warrant Certificate thereafter
issued or countersigned, whether in exchange or substitution for an outstanding
Warrant Certificate or otherwise, may be in the form as so changed.
ARTICLE IV
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 4.1. No Rights as Warrant Security holder Conferred by
-------------------------------------------------
Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
- --------------------------------
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to vote at or to
receive notice of any meeting of stockholders of the Company or any consent
action or other proceeding of the Company. No such holder, by reason of the
ownership or possession of a Warrant or the Warrant Certificate representing the
same, either at, before or after exercising such Warrant, shall have any right
to receive any cash dividends, stock dividends, allotments or rights or other
distributions (except as specifically provided herein), paid, allotted or
distributed to the stockholders of the Company prior to the date of the exercise
of such Warrant. No such holder shall have any right not expressly conferred by
the Warrant or Warrant Certificate that such holder holds.
SECTION 4.2. Lost, Stolen, Mutilated or Destroyed Warrant
--------------------------------------------
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
- ------------
satisfactory to it and the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity reasonably
satisfactory to the Warrant Agent and the Company, and, in the case of
mutilation, upon
- 13 -
<PAGE>
surrender thereof to the Warrant Agent for cancellation, then, in the absence of
notice to the Company or the Warrant Agent that such Warrant Certificate has
been acquired by a bona fide purchaser, the Company shall execute, and an
authorized officer of the Warrant Agent shall manually countersign and deliver,
in exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant
Certificate, a new Warrant Certificate of the same tenor and evidencing a like
number of Warrants. Upon the issuance of any new Warrant Certificate under this
Section 4.2, 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 Warrant Agent) in
connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section 4.2 in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of
this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section 4.2 are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement of mutilated, lost, stolen
or destroyed Warrant Certificates.
SECTION 4.3. Holder of Warrant Certificate May Enforce Rights.
------------------------------------------------
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the Trustee, the holder
of any Warrant Securities or the holder of any other Warrant Certificate, may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company suitable to enforce,
or otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and this
Agreement.
SECTION 4.4. Reclassification, Consolidation, Merger, Sale,
----------------------------------------------
Conveyance or Lease. If any of the following shall occur while any Warrants are
- -------------------
outstanding: (a) any reclassification or change of the outstanding shares of
Warrant Securities (other than a change in par value or from par value to no par
value or from no par value to par value); (b) any consolidation or merger to
which the Company is party (other than a consolidation or merger in which the
Company is the continuing corporation and which does not result in any
reclassification of or change in the outstanding shares of Warrant Securities
issuable upon exercise of the Warrants); or (c) any sale, conveyance, transfer
or lease to another corporation of the properties and assets of the Company as
an entirety or substantially as an entirety, then the Company or such successor
or purchasing corporation, as the case may be, shall thereupon make appropriate
provision by amendment of this Agreement or otherwise so that the holders of the
Warrants then outstanding shall have the
- 14 -
<PAGE>
right at any time thereafter, upon exercise of the Warrants, to purchase the
kind and amount of shares of stock, other securities and property receivable
upon such reclassification, change, consolidation, merger, sale, conveyance,
transfer or lease as would be received by a holder of the number of shares of
Warrant Securities issuable upon exercise of such Warrant immediately prior to
such reclassification, change, consolidation, merger, sale, conveyance, transfer
or lease (assuming that such holder of Warrant Securities failed to exercise
rights of election, if any, as to the kind or amount of shares or stock, other
securities or property receivable upon consummation of any such transaction
(provided that if the kind or amount of shares of stock, other securities or
property receivable upon consummation of such transaction is not the same for
each non-electing share, then the kind and amount of shares of stock, other
securities or property receivable upon consummation of such transaction for each
non-electing share shall be deemed to the kind and amount so receivable per
share by a plurality of the non-electing shares). Any successor or assuming
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of the Company, any or all of the Warrants issuable
hereunder which theretofore shall not have been issued by the Company, and may
execute and deliver Warrant Securities in its own name in fulfillment of its
obligations to deliver Warrant Securities upon exercise of the Warrants. The
Company shall thereupon be relieved of any further obligation hereunder or under
the Warrants, and the Company as the predecessor corporation may thereupon or at
any time thereafter be dissolved, would up or liquidated. All the Warrants so
issued shall in all respects have the same legal rank and benefit under this
Agreement as the Warrants theretofore or thereafter issued in accordance with
the terms of this Agreement as though all of such Warrants had been issued at
the date of the execution hereof. In case of any such reclassification, change,
consolidation, merger, sale, conveyance, transfer or lease, such changes in
phraseology and form (but not in substance) may be made in the Warrants
thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal counsel as
conclusive evidence that any such reclassification, change, consolidation,
merger, sale, conveyance, transfer or lease complies with the provisions of this
Section 4.4.
ARTICLE V
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES
SECTION 5.1. Exchange and Transfer of Warrant Certificates. [IF
--------------------------------------------- --
WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE IMMEDIATELY
- ----------------------------------------------------------------------
DETACHABLE OR ARE ISSUED ALONE: Upon] [IF WARRANTS ARE SOLD IN UNITS WITH
- ------------------------------ ----------------------------------
OFFERED SECURITIES AND ARE NOT IMMEDIATELY
- ------------------------------------------
- 15 -
<PAGE>
DETACHABLE: Prior to the Detachable Date, a Warrant Certificate may be
- ----------
exchanged or transferred only together with the Offered Security to which the
Warrant Certificate was initially attached, and only for the purpose of
effecting or in conjunction with an exchange or transfer of such Offered
Security. Prior to the Detachable Date, each transfer of the Offered Security
on the register of the Offered Securities shall operate also to transfer the
related Warrant Certificates. After the Detachable Date, upon] surrender at the
corporate trust office of the Warrant Agent [or at __________________,
_________________, ______________________], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants or the transfer thereof may be registered in whole or
in part, provided that such other Warrant Certificates evidence the same
aggregate number of Warrants as the Warrant Certificates so surrendered. The
Warrant Agent shall keep, at its corporate trust office [and at _____________,
_______________, _________________], books in which, subject to such reasonable
regulations as it may prescribe, it shall register Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates, upon surrender of
the Warrant Certificates to the Warrant Agent at its corporate trust office [or
at ____________________, ________________, ________________] for exchange or
registration of transfer, properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent. No service
charge shall be made for any exchange or registration of transfer of Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. Whenever any
Warrant Certificates are so surrendered for exchange or registration of
transfer, an authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange or
registration of transfer which will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange or
registration of transfer of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations, and entitled to the same
benefits under this Agreement, as the Warrant Certificate surrendered for such
exchange or registration of transfer.
SECTION 5.2. Treatment of Holders of Warrant Certificates. [IF
-------------------------------------------- --
WARRANTS ARE OFFERED IN UNITS WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY
- -----------------------------------------------------------------------------
DETACHABLE: Prior to the Detachable Date, the Company, the Warrant Agent and
- ----------
all other persons may treat the registered holder of the Offered Security as the
owner of the Warrant Certificates initially attached thereto for any purpose and
- 16 -
<PAGE>
as the person entitled to exercise the rights represented by the Warrants
evidenced by such Warrant Certificates, any notice to the contrary
notwithstanding. After the Detachable Date, and prior to due presentment of a
Warrant Certificate for registration of transfer,] [T]he Company, the Warrant
Agent and all other persons may treat the registered holder of a Warrant
Certificate as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding.
SECTION 5.3. Cancellation of Warrant Certificates. Any Warrant
------------------------------------
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to the Company, be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly cancelled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof.
The Warrant Agent shall promptly notify the Company of any Warrant Certificate
which has been cancelled and shall deliver to the Company from time to time or
otherwise dispose of cancelled Warrant Certificates in a manner satisfactory to
the Company.
ARTICLE VI
CONCERNING THE WARRANT AGENT
SECTION 6.1. Warrant Agent. The Company hereby appoints [Warrant
-------------
Agent] as Warrant Agent of the Company in respect of the Warrants and the
Warrant Certificates upon the terms and subject to the conditions herein set
forth, and [Warrant Agent] hereby accepts such appointment. The Warrant Agent
shall have the powers and authority granted to and conferred upon it in the
Warrant Certificates and this Agreement and such further powers and authority to
act on behalf of the Company as the Company may hereinafter grant to or confer
upon it. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.
SECTION 6.2. Conditions of Warrant Agent's Obligations. The Warrant
-----------------------------------------
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including, without limitation, the terms and conditions set forth in
this Section 6.2, to all of which the Company agrees and to all of which the
rights of the holders from time to time of the Warrant Certificates hereunder
shall be subject:
(a) Compensation and Indemnification. The Company agrees promptly to
--------------------------------
pay the Warrant Agent the compensation to be
- 17 -
<PAGE>
agreed upon with the Company for all services rendered by the Warrant Agent and
to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including
reasonable counsel fees and expenses) incurred by the Warrant Agent without
gross negligence, bad faith or breach of this Agreement on its part in
connection with the services rendered hereunder by the Warrant Agent. The
Company also agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, bad faith
or willful misconduct, or breach of this Agreement on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the reasonable costs and expenses of defending against any
claim of such liability.
(b) Agent for the Company. In acting under this Warrant Agreement
---------------------
and in connection with the Warrant Certificates, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligations or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel satisfactory
-------
to it, and the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in accordance with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall incur
---------
no liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit or other document furnished to it by the Company reasonably believed
by it to be genuine and to have been presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
--------------------
directors and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it or
they may engage or be interested in any financial or other transaction with the
Company and may act on, or as depositary, trustee or agent for, any committee or
body of holders of Warrant Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder.
(f) No Liability for Interest. Unless otherwise agreed with the
-------------------------
Company, the Warrant Agent shall have no liability for interest on any monies at
any time received by it pursuant to any of the provisions of this Agreement or
of the Warrant Certificates.
- 18 -
<PAGE>
(g) No Liability for Invalidity. The Warrant Agent shall have no
---------------------------
liability with respect to any invalidity of this Agreement or any of the Warrant
Certificates (except as to the Warrant Agent's countersignature thereon).
(h) No Responsibility for Representations. The Warrant Agent shall
-------------------------------------
not be responsible for any of the recitals or representations herein or in the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be obligated to
----------------------
perform only such duties as are specifically set forth herein and in the Warrant
Certificates and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder likely to
involve it in any expense or liability, the payment of which within a reasonable
time is not, in its reasonable opinion, assured to it. The Warrant Agent shall
not be accountable or under any duty or responsibility for the use by the
Company of any of the Warrant Certificates authenticated by the Warrant Agent
and delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by the
Company in the performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any written demand
from a holder of a Warrant Certificate with respect to such default, including,
without limitation, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or except as provided in Section
7.2, to make any demand upon the Company. This Section 6.2(i) shall not be
construed to relieve the Warrant Agent from liability for its own negligent
action, failure to act or willful misconduct.
SECTION 6.3. Resignation and Appointment of Successor.
----------------------------------------
(a) The Company agrees, for the benefit of the holders from time to
time of the Warrant Certificates, that there shall at all times be a Warrant
Agent hereunder until all the Warrants have been exercised or are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective; provided, however, that
-------- -------
such date shall not be less than three months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the Company by the filing with the
Warrant Agent of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when
- 19 -
<PAGE>
it shall be come effective. Any such resignation or removal shall take effect
upon the appointment by the Company, as provided below, of a successor Warrant
Agent (which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. The obligation
of the Company under Section 6.2(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent.
(c) If at any time the Warrant Agent shall resign, shall be removed,
shall become incapable of acting, shall be adjudged a bankrupt or insolvent,
shall commence a voluntary case under the Federal bankruptcy laws as now or
hereafter constituted or under any other applicable Federal or State bankruptcy,
insolvency or similar law, shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Warrant Agent or its property or affairs,
shall make an assignment for the benefit of creditors, shall admit in writing
its inability to pay its debts generally as they become due or shall take
corporate action in furtherance of any such actions, a decree or order for
relief by a court having jurisdiction in the premises shall have been entered in
respect of the Warrant Agent in an involuntary case under the Federal bankruptcy
laws as now or hereafter constituted or any other applicable Federal or State
bankruptcy, insolvency or similar law, a decree or order by a court having
jurisdiction in the premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar
official) of the Warrant Agent or of its property or affairs or any public
officer shall take charge or control of the Warrant Agent or of its property or
affairs for the purpose of rehabilitation, conservation, winding up or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment of such a successor Warrant Agent and
acceptance by the successor Warrant Agent of such appointment, the Warrant Agent
shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor as
Warrant Agent hereunder.
- 20 -
<PAGE>
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets or business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. Amendment. This Warrant Agreement may be amended by the
---------
parties hereto for any reason with the consent of the holders of not less than a
majority of the then outstanding unexercised Warrants. Notwithstanding the
foregoing, this Agreement may be amended by the parties hereto, without the
consent of the holder of any Warrant Certificate, for the purpose of curing any
ambiguity, curing, correcting or supplementing any defective provision contained
herein or making any other provisions with respect to matters or questions
arising under this Agreement as the Company and the Warrant Agent may deem
necessary or desirable; provided, however, that such action shall not have a
-------- -------
material adverse effect on the interests of the holders of the Warrant
Certificates.
SECTION 7.2. Notices and demands to the Company and Warrant Agent.
----------------------------------------------------
If the Warrant Agent shall receive any notice or demand addressed to the Company
or the Warrant Agent by the holder of a Warrant Certificate pursuant to the
provisions of the Warrant Certificates, the Warrant Agent shall promptly forward
a copy of such notice or demand to the Company.
SECTION 7.3. Addresses. Any communication from the Company to the
---------
Warrant Agent with respect to this Agreement shall be addressed to [Warrant
Agent], _________________, Attention: ________________ and any communication
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to Tele-Communications, Inc., 5619 DTC Parkway, Englewood, Colorado,
80111, Attention: ________________ (or such other address as shall be specified
in writing to the other party by the Warrant Agent or the Company).
SECTION 7.4. Notices to Holders of Warrant Certificates. Any notice
------------------------------------------
to holders of Warrant Certificates which by any provisions of this warrant
Agreement is required or permitted to be given shall be given by first class
mail, postage prepaid, to such holder's address as it appears on the books of
the Warrant Agent.
- 21 -
<PAGE>
SECTION 7.5. Applicable Law. The validity, interpretation and
--------------
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of ________.
SECTION 7.6. Delivery of Prospectus. The Company shall furnish to
----------------------
the Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of the Warrants (the "Prospectus"), and,
upon the exercise of any Warrant, the Warrant Agent shall deliver to the holder
of the Warrant Certificate evidencing such Warrant, prior to or currently with
the delivery of the Warrant Securities issued upon such exercise, a Prospectus.
The Warrant Agent shall not, by reason of any such delivery, assume any
responsibility for the accuracy or adequacy of such Prospectus other than with
respect to information provided by the Warrant Agent to the Company expressly
for use therein.
SECTION 7.7. Obtaining of Governmental Approvals. The Company shall
-----------------------------------
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of, and filings with,
governmental agencies and authorities under U.S. Federal and State laws
(including, without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be required in connection with the issuance, sale, transfer and
delivery of the Warrant Securities issued upon exercise of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and
delivery of the Warrants or upon the expiration of the period during which the
Warrants are exercisable.
SECTION 7.8. Persons Having Rights under Warrant Agreement. Nothing
---------------------------------------------
in this Agreement expressed or implied and nothing that may be inferred from any
of the provisions hereof is intended or shall be construed to confer upon or
give to any person or corporation other than the Company, the Warrant Agent and
the holders of the Warrant Certificates any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise or
agreement hereof. All covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company and the Warrant Agent and their successors and of the
holders of the Warrant Certificates.
SECTION 7.9. Successors and Assigns; Benefits of Agreement. All
---------------------------------------------
covenants and agreements of the parties hereto under this Warrant Agreement
shall bind their respective successors and assigns, whether or not so expressed
herein. Nothing contained in this Agreement or in the Warrant Certificates,
express or implied, shall give to any person, other than the parties hereto and
their successors and assigns and the holders from time to time of the
- 22 -
<PAGE>
Warrants, any benefits or any legal or equitable right, remedy or claim under
this Agreement.
SECTION 7.10. Severability. If any provision of this Warrant
------------
Agreement or of the Warrants shall be determined to be invalid, illegal or
unenforceable, such determination shall not in any way affect or impair the
validity, legality or enforceability of the remaining provisions hereof or
thereof.
SECTION 7.11. Headings. The descriptive headings of the several
--------
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning of construction of any of the provisions
hereof.
SECTION 7.12. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which as so executed shall be deemed to be an
original, and such counterparts shall together constitute one and the same
instrument.
SECTION 7.13. Inspection of Agreement. A copy of this Agreement
-----------------------
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent [or at ________, ________, ______] for inspection by
the holder of any Warrant Certificate. The Warrant Agent may require such
holder to submit his Warrant Certificate for inspection by it.
IN WITNESS WHEREOF, Tele-Communications, Inc. and [Warrant Agent] have
caused this Agreement to be signed and attested by their respective duly
authorized officers and their respective corporate seals to be affixed hereunto
as of the day and year first written above.
TELE-COMMUNICATIONS, INC.
By:_________________________
Name:
Title:
Attest:
- -------------------------
Name:
Title:
[WARRANT AGENT]
By:_________________________
Name:
Title:
Attest:
- -------------------------
- 23 -
<PAGE>
Name:
Title:
- 24 -
<PAGE>
EXHIBIT A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[Form of Legend if Offered Securities Prior to ____________, ____, this
with Warrants which are not Warrant Certificate cannot be
immediately detachable: transferred or exchanged unless
attached to a [title of Offered
Securities].]
[Form of Legend if Warrants are not Prior to ____________, ____, Warrants
immediately exercisable: evidenced by this Warrant Certificate
cannot be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
TELE-COMMUNICATIONS, INC.
WARRANTS TO PURCHASE
[TITLE OF WARRANT SECURITIES]
VOID AFTER 5:00 P.M., NEW YORK CITY TIME,
ON ________________, ________
No.________ ________ Warrants
This certifies that ___________________ or registered assigns is the
registered] owner of the above-indicated number of Warrants, each Warrant
entitling such owner [IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND
---------------------------------------------------------
ARE NOT IMMEDIATELY DETACHABLE: , subject to the registered owner
- ------------------------------
qualifying as a "holder" of this Warrant Certificate as defined below] to
purchase, at any time [after 5:00 P.M., New york City time, on ________________,
_____, and] on or before 5:00 P.M., New York City time, on ________________,
_____, _____________ shares of [title of common stock issuable upon exercise of
Warrants] (the "Warrant Securities"), of Tele-Communications, Inc. (the
"Company") on the following basis: during the period from ________________,
____ through and including ______________, ____, the exercise price of each
Warrant shall be $_______________; during the period from ___________, ____
through and including ___________, ____ the exercise price of each shall be
$___________, subject to adjustment as set forth in the Warrant Agreement (as
defined below) per share (the "Warrant Price"). [The Warrant Price shall be
subject to reduction as set forth in the Warrant Agreement.] No adjustment
shall be made for any dividends on any Warrant Securities issuable upon exercise
of any Warrant.
A-1
<PAGE>
The holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full in lawful money
of the United States of America, in cash or by certified check or official bank
check or by bank wire transfer, in each case in immediately available funds, the
Warrant Price for each Warrant exercised to the Warrant Agent (as defined below)
and by surrendering this Warrant Certificate within five business days of such
payment, with the purchase form on the back hereof duly executed, at the
corporate trust office of [Warrant Agent], or its successor as warrant agent
(the "Warrant Agent"), or ___________, currently at the address specified on the
reverse hereof, and upon compliance with and subject to the conditions set forth
herein and in the Warrant Agreement.
The term "holder" as used herein shall mean [IF WARRANTS ARE SOLD IN UNITS
-----------------------------
WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE: , prior to
- ----------------------------------------------------------
______________, ____ (the "Detachable Date"), the registered owner of the
Company's [title of Offered Securities] to which this Warrant Certificate is
initially attached, and after such Detachable Date,] the person in whose name at
the time this Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose pursuant to Section 5.1 of the
Warrant Agreement (as defined below)].
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form. Upon any exercise
of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the Warrant
Agreement, dated as of ________________, 199_ (the "Warrant Agreement"), between
the Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant Agent
[and at ____________, __________, ___________].
[IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE NOT
-----------------------------------------------------------------
IMMEDIATELY DETACHABLE: Prior to ____________, _____, this Warrant Certificate
- ----------------------
may only be exchanged or transferred together with the [title of Offered
Securities] ("Offered Securities") to which this Warrant Certificate was
initially attached, and only for the purpose of effecting or in conjunction with
an exchange or transfer of such Offered Securities. After such date, this] [IF
--
WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES WITH WARRANTS AND ARE
- ------------------------------------------------------------------------
IMMEDIATELY DETACHABLE OR ISSUED ALONE: Transfer of this] Warrant Certificate
- --------------------------------------
may be registered when this Warrant Certificate is surrendered at the corporate
trust office of the Warrant Agent
A-2
<PAGE>
[or at __________, __________, __________] by the registered owner or his
assigns, in person or by an attorney duly authorized in writing, in the manner
and subject to the limitations provided in the Warrant Agreement].
[IF WARRANTS ARE SOLD IN UNITS WITH OFFERED SECURITIES AND ARE NOT IMMEDIATELY
-----------------------------------------------------------------------------
DETACHABLE: Except as provided in the immediately preceding paragraph, after]
- ----------
[IF WARRANTS ARE SOLD IN UNITS OFFERED SECURITIES AND ARE IMMEDIATELY DETACHABLE
- --------------------------------------------------------------------------------
OR ISSUED ALONE: After] countersignature by the Warrant Agent and prior to the
- ---------------
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or at ________,
________________] for Warrant Certificates representing the same aggregate
number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of the Warrant Securities, including, without limitation, the
right to vote at, or to receive notice of, any meeting of stockholders of the
Company; any consent action or other proceeding of the Company; no such holder,
by reason of the ownership or possession of a Warrant or the Warrant Certificate
representing the same, either at, before or after exercising such Warrant, shall
have any right to receive any cash dividends, stock dividends, allotments or
rights, or other distributions (except as specifically provided herein), paid,
allotted or distributed or distributable to the stockholders of the Company
prior to the date of the exercise of such Warrant; and no such holder shall have
any right not expressly conferred by the Warrant or Warrant Certificate that
such holder holds.
This Warrant Certificate shall not be valid or obligatory for any purpose
until countersigned by the Warrant Agent.
Dated as of________________ TELE-COMMUNICATIONS, INC.
By:_________________________
Name:
Title:
Attest:
- ------------------------------
Countersigned:
[WARRANT AGENT]
As Warrant Agent
By:___________________________
Authorized Signature
A-3
<PAGE>
[REVERSE OF WARRANT CERTIFICATE]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay in lawful
money of the United States of America, in cash or by certified check or official
bank check or by bank wire transfer, in each case in immediately available
funds, the Warrant Price in full for Warrants exercised to [Warrant Agent],
[Corporate Trust Department] [insert address of Warrant Agent], Attention:
________________, which payment must specify the name of the holder and the
number of Warrants exercised by such holder. In addition, the holder must
complete the information required below and present this Warrant Certificate in
person or by mail (certified or registered mail is recommended) to the Warrant
Agent at the appropriate address set forth below. This Warrant Certificate,
completed and duly executed, must be received by the Warrant Agent within five
business days of the payment.
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise _____________
Warrants, evidenced by this Warrant Certificate, to purchase ________ shares of
[title of common stock issuable upon exercise of Warrants] (the "Warrant
Securities") of Tele-Communications, Inc. and represents that he has tendered
payment for such Warrant Securities in lawful money of the United States of
America, in cash or by certified check or official bank check or by bank wire
transfer, in each case in immediately available funds to the order of Tele-
Communications, Inc. c/o [insert name and address of Warrant Agent], in the
amount of $_____________ in accordance with the terms hereof. The undersigned
requests that said number of shares of Warrant Securities be in the authorized
denominations, registered in such names and delivered all as specified in
accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
A-4
<PAGE>
Dated:________________________ Name:____________________________
______________________________ Address:_________________________
(Insert Social Security or
other Identifying Number of _________________________
Holder)
Signature Guaranteed: Signature: _____________________
(Signature must conform in
______________________________ all respects to name of
holder as specified on the
face of this Warrant
Certificate and must bear a
signature guarantee by a
bank, trust company or
member broker of the New
York, Midwest or Pacific
Stock Exchange)
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at: ________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
By mail at: ________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants -- complete as
appropriate.]
A-5
<PAGE>
ASSIGNMENT
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrant Evidenced Hereby]
FOR VALUE RECEIVED ______________________________________
hereby sells, assigns and transfers unto
______________________________ ______________________________________
(Please print name) (Please insert social security or other
identifying number)
______________________________
(Address)
______________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _____________________ its Attorney to
transfer said Warrant Certificate on the books of the Warrant Agent with full
power of substitution in the premises.
Dated:________________
______________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Warrant Certificate and must bear a
signature guarantee by a bank, trust company
or member broker of the New York, Midwest or
Pacific Stock Exchange)
Signature Guaranteed:
________________________
A-6
<PAGE>
EXHIBIT 5
---------
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Gentlemen:
As counsel for Tele-Communications, Inc., a Delaware corporation (the
"Company"), we have examined and are familiar with the registration statement on
Form S-3 (File No. 33-56271) (the "Registration Statement"), which relates to
the proposed offering from time to time by the Company of (i) shares of the
Company's common stock, which may be Class A Common Stock, $1.00 par value per
share ("Class A Common Stock"), Class B Common Stock, $1.00 par value per share
("Class B Common Stock"), and/or any class of common stock that may hereafter be
created through an amendment to the Company's Restated Certificate of
Incorporation (collectively, "Common Stock"); (ii) shares of the Company's
Series Preferred Stock, $.01 par value per share ("Preferred Stock"), which may
be issued in the form of depositary shares evidenced by depositary receipts
("Depositary Shares"), and (iii) warrants ("Warrants") to purchase Common Stock
or Preferred Stock (which shares of Preferred Stock may be issued in the form of
Depositary Shares) (the Common Stock, Preferred Stock and Warrants are
collectively referred to as the "Securities"), or any combination of the
foregoing, at an aggregate initial offering price not to exceed $575,000,000, at
prices and on terms to be determined at or prior to the time of sale.
As described in the Registration Statement, the Preferred Stock is to
be issued under the Company's Restated Certificate of Incorporation, as amended
(the "Restated Certificate of Incorporation"), and a certificate of designations
(a "Certificate of Designations") to be approved by the Board of Directors of
the Company or a committee thereof and filed with the Secretary of State of the
State of Delaware (the "Delaware Secretary of State") pursuant to Section 151 of
the General Corporation Law of the State of Delaware. The Depositary Shares are
to be issued under a deposit agreement (the "Deposit Agreement") to be entered
into between the Company, a depositary to be named by the Company (the
"Depositary") and the holders from time to time of depositary receipts
evidencing Depositary Shares. The Common Stock is to be issued under the
Restated Certificate of Incorporation. The Warrants are to be issued under
warrant agreements (the "Warrant Agreements") to be entered into between the
Company and warrant agents to be named by the Company.
<PAGE>
Tele-Communications, Inc.
Page 2
Certain terms of the Securities to be issued by the Company from time
to time will be approved by the Board of Directors of the Company or a committee
thereof as part of the corporate action taken and to be taken (the "Corporate
Proceedings") in connection with the issuance of the Securities.
In connection therewith, we have examined, among other things,
originals, certified copies or copies otherwise identified to our satisfaction
as being copies of originals, of the Restated Certificate of Incorporation and
By-Laws of the Company, each as amended; resolutions of the proceedings of the
Company's Board of Directors, including committees thereof, with respect to the
filing of the Registration Statement and related matters; and such other
documents, records, certificates of public officials and questions of law as we
deemed necessary or appropriate for the purpose of this opinion. In rendering
this opinion, we have relied, to the extent we deem such reliance appropriate,
on certificates of officers of the Company as to factual matters. We have
assumed the authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or reproductive copies. We have further assumed that there
will be no changes in applicable law between the date of this opinion and any
date of issuance of Securities or any date of issuance or delivery of Common
Stock or Preferred Stock upon the conversion of any Preferred Stock that is
convertible or upon exercise of any of the Warrants.
Based upon the foregoing, we are of the opinion that:
1. When, in the case of Depositary Shares, the Deposit Agreement for
the Depositary Shares to be issued has been executed and delivered by the
parties thereto, all Corporate Proceedings have been completed, the Preferred
Stock is issued and delivered to the Depositary against receipt of depositary
receipts, executed by the Depositary, evidencing such Depositary Shares and such
Depositary Shares have been issued and sold as contemplated by the Registration
Statement, the prospectus contained therein and the applicable supplement to the
prospectus, such Depositary Shares will be legal, valid and binding obligations
of the Company, entitled to the benefits of the applicable Deposit Agreement,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws affecting the
rights of creditors generally and except that equitable remedies may not be
available.
2. When, in the case of Warrants, a Warrant Agreement for the
Warrants of the series to be issued has been executed and delivered by the
parties thereto, all Corporate Proceedings have been completed, such Warrants
have been duly executed by the proper officers of the Company and countersigned
by the warrant agent for such series in accordance with the terms of the
applicable Warrant Agreement and such Warrants have been issued and sold as
contemplated by the Registration Statement, the prospectus contained therein and
the applicable
<PAGE>
Tele-Communications, Inc.
Page 3
supplement to the prospectus, such Warrants will be legal, valid and binding
obligations of the Company, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
other laws affecting the rights of creditors generally and except that equitable
remedies may not be available.
3. When, in the case of Preferred Stock, the applicable Certificate
of Designations is executed, delivered and filed with the Delaware Secretary of
State, all Corporate Proceedings have been completed, such Preferred Stock has
been duly executed by the proper officers of the Company and the transfer agent
and issued and sold pursuant to the terms of the applicable Certificate of
Designations and as contemplated by the Registration Statement, the prospectus
included therein and the applicable supplement to the prospectus, such Preferred
Stock will be duly authorized, validly issued, fully paid and non-assessable.
4. When, in the case of Common Stock, all Corporate Proceedings have
been completed (including, if necessary, receipt of the requisite approval of
the shareholders of the Company of an amendment to the Restated Certificate of
Incorporation authorizing the creation of any such class of Common Stock and the
filing of such amendment with the Delaware Secretary of State), such Common
Stock has been duly executed by the proper officers of the Company and the
transfer agent and sold as contemplated by the Registration Statement, the
prospectus included therein and the applicable supplement to the prospectus,
such Common Stock will be duly authorized, validly issued, fully paid and non-
assessable.
5. When any Preferred Stock that has been issued in accordance with
paragraph 3 above has been surrendered to the Company for conversion in
accordance with the applicable Certificate of Designations and the shares of
Common Stock issuable upon such conversion have been duly issued or delivered
from shares of such Common Stock reserved therefor in accordance with
resolutions adopted by the Board of Directors of the Company or any committee
thereof, such shares of Common Stock will be duly authorized, validly issued,
fully paid and non-assessable; when any Warrants that have been issued in
accordance with paragraph 2 above have been exercised by the holder thereof in
accordance with the applicable Warrant Agreement and the shares of Common Stock
or Preferred Stock issuable upon such exercise have been duly issued or
delivered from shares of Common Stock or Preferred Stock, as applicable,
reserved therefor in accordance with resolutions adopted by the Board of
Directors of the Company or any committee thereof, upon payment of the exercise
price therefor, such shares of Common Stock or Preferred Stock, as applicable,
will be duly authorized, validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to us contained therein under the
heading "Legal Matters." In giving the foregoing consent, we do not admit that
we are in the category of persons whose
<PAGE>
Tele-Communications, Inc.
Page 4
consent is required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Jerome H. Kern, a partner of Baker & Botts, L.L.P., is a director of
the Company.
Very truly yours,
BAKER & BOTTS, L.L.P.
<PAGE>
Exhibit 12.1
TELE-COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
Calculation of Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends
(amounts in millions, except for ratios)
(unaudited)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------
Pro forma
1993 1993 (a) 1992 (a) 1991 1990 1989
-------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings (losses) from continuing operations before income taxes $ 182 161 45 (108) (308) (389)
Add:
Interest on debt 836 738 815 928 990 895
Interest portion of rentals 35 23 22 23 23 19
Amortization of debt expense 16 12 9 6 6 5
Distributions from and (earnings) losses of less than
50%-owned affiliates with debt not guaranteed by TCI 27 26 (10) (27) 34 46
Minority interests in earnings (losses) of consolidated
subsidiaries, including preferred stock dividend requirement
of consolidated subsidiaries 13 13 277 24 (63) (36)
Elimination of preferred stock dividend requirement
of consolidated subsidiaries to 50%-owned affiliates -- -- (250) (42) (36) (31)
Preferred stock dividend requirements of 50%-owned
affiliates, other than amounts to TCI -- -- 175 23 15 25
Earnings available for combined fixed charges -------------------------------------------------------
and preferred stock dividends $ 1,109 973 1,083 827 661 534
=======================================================
Fixed charges:
Interest on debt:
TCI and consolidated subsidiaries $ 769 731 718 826 868 766
Elimination of interest of consolidated subsidiaries to
50%-owned affiliates -- -- (36) (47) (51) (51)
TCI's proportionate share of interest of 50%-owned
affiliates 67 7 133 149 173 180
-------------------------------------------------------
836 738 815 928 990 895
Interest portion of rentals 35 23 22 23 23 19
Amortization of debt expense 16 12 9 6 6 5
Preferred stock dividend requirements of consolidated
subsidiaries 42 14 281 61 56 46
Elimination of preferred stock dividend requirements of
consolidated subsidiaries to 50%-owned affiliates -- -- (250) (42) (36) (31)
Preferred stock dividend requirements of 50%-owned
affiliates, other than amounts to TCI -- -- 175 23 15 25
Capitalized interest 10 9 6 5 6 5
-------------------------------------------------------
Total fixed charges $ 939 796 1,058 1,004 1,060 964
=======================================================
Ratio of earnings to combined fixed charges
and preferred stock dividends 1.18 1.22 1.02 -- -- --
Deficiency $ -- -- -- (177) (399) (430)
<CAPTION>
Nine Months Ended September 30,
------------------------------
Pro forma
1994 1994 1993 (a)
------------------------------
<S> <C> <C> <C>
Earnings (losses) from continuing operations before income taxes 251 148 183
Add:
Interest on debt 651 582 555
Interest portion of rentals 27 19 17
Amortization of debt expense 12 8 9
Distributions from and (earnings) losses of less than
50%-owned affiliates with debt not guaranteed by TCI 24 (104) 9
Minority interests in earnings (losses) of consolidated
subsidiaries, including preferred stock dividend requirement
of consolidated subsidiaries 0 8 9
Elimination of preferred stock dividend requirement
of consolidated subsidiaries to 50%-owned affiliates -- -- --
Preferred stock dividend requirements of 50%-owned
affiliates, other than amounts to TCI -- -- --
Earnings available for combined fixed charges ------------------------------
and preferred stock dividends 965 661 782
==============================
Fixed charges:
Interest on debt:
TCI and consolidated subsidiaries 595 568 549
Elimination of interest of consolidated subsidiaries to
50%-owned affiliates -- -- --
TCI's proportionate share of interest of 50%-owned
affiliates 56 14 6
------------------------------
651 582 555
Interest portion of rentals 27 19 17
Amortization of debt expense 12 8 9
Preferred stock dividend requirements of consolidated
subsidiaries 33 12 7
Elimination of preferred stock dividend requirements of
consolidated subsidiaries to 50%-owned affiliates -- -- --
Preferred stock dividend requirements of 50%-owned
affiliates, other than amounts to TCI -- -- --
Capitalized interest 13 12 5
------------------------------
Total fixed charges 736 633 593
==============================
Ratio of earnings to combined fixed charges
and preferred stock dividends 1.31 1.04 1.32
Deficiency -- -- --
</TABLE>
(a) Preferred stock dividend requirements have been increased to an amount
representing the pretax earnings which would be required to cover such
dividend requirements. The effective income tax rate utilized for
purposes of increasing preferred stock dividend requirements in 1993 has
been adjusted to exclude the effect of the federal income tax rate change
in the third quarter of 1993.
(continued)
<PAGE>
TELE-COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
Calculation of Ratios of Earnings to Combined Fixed Charges
and Preferred Stock Dividends
(amounts in millions, except for ratios)
(unaudited)
Fixed charges related to interest on debt of less than 50%-owned affiliates
guaranteed by TCI:
<TABLE>
<S> <C>
Years ended December 31,
1989 $ 745
1990 710
1991 506
1992 2,517
1993 13,833
Pro forma 1993 14,365
Three Months Ended March 31,
1993 $ 629
1994 3,458
Six Months Ended June 30,
1993 $ 1,258
1994 5,927
Pro forma 1994 6,193
Nine Months Ended September 30,
1993 $ 1,888
1994 10,676
Pro forma 1994 10,676
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
TELE-COMMUNICATIONS, INC.:
We consent to the incorporation by reference in the registration statement
(No. 33-56271) on Form S-3 of Tele-Communications, Inc. of our reports dated
March 21, 1994, relating to the consolidated balance sheets of TCI
Communications, Inc. (formerly Tele-Communications, Inc.) and subsidiaries as
of December 31, 1993 and 1992, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1993, and all related schedules, which
reports appear in the December 31, 1993 Annual Report on Form 10-K, as amended,
of TCI Communications, Inc. and to the reference to our firm under the heading
"Experts" in the registration statement. Our reports refer to a change in the
method of accounting for income taxes in 1993.
KPMG PEAT MARWICK LLP
Denver, Colorado
January 9, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTOR AND STOCKHOLDERSLIBERTY MEDIA CORPORATION:
We consent to the incorporation by reference in the registration statement
(No. 33-56271) on Form S-3 of Tele-Communications, Inc. of our report dated
March 18, 1994, relating to the consolidated balance sheets of Liberty Media
Corporation and subsidiaries (Successor) as of December 31, 1993 and 1992, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the years ended December 31, 1993 and 1992 and the period from
April 1, 1991 to December 31, 1991 (Successor Periods) and the consolidated
statements of operations, stockholders' equity, and cash flows of Liberty Media
(a combination of certain programming interests and cable television assets of
TCI Communications, Inc. (formerly Tele-Communications, Inc.)) (Predecessor)
for the period from January 1, 1991 to March 31, 1991 (Predecessor Period),
which report appears in the Form 8-K of TCI Communications, Inc, dated April 6,
1994 and to the reference to our firm under the heading "Experts" in the
registration statement. Our report refers to a change in the method of
accounting for income taxes in 1993.
KPMG PEAT MARWICK LLP
Denver, Colorado
January 9, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-56271) of
Tele-Communications, Inc. of our report dated February 4, 1994, relating to the
consolidated financial statements of TeleCable Corporation which appears on
page 12 of the TCI Communications, Inc. and Tele-Communications, Inc. Current
Report on Form 8-K dated August 26, 1994. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
Price Waterhouse LLP
Norfolk, Virginia
January 11, 1995
