<PAGE>
As filed with the Securities and Exchange Commission on June 11, 1998
Registration No.333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 jurisdiction (IRS Employer
of incorporation or Identification No.)
organization)
Terrace Tower II
5619 DTC Parkway
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. Copy to:
Tele-Communications, Inc. Elizabeth M. Markowski, Esq.
Terrace Tower II Baker & Botts, L.L.P.
5619 DTC Parkway 599 Lexington Avenue
Englewood, Colorado 80111-3000 New York, New York
3000 10022-6030
(303) 267-5500
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this registration statement as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AGGREGATE AMOUNT OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED TO BE REGISTERED PER UNIT PRICE(1)(2) FEE
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<S> <C> <C> <C> <C>
Debt Securities......... __ __ __ __
Series Preferred Stock, | | | |
par value $.01 per | | | |
share.................. | | | |
Depositary Shares(5).... | | | $1,500,000,000(3) | $442,500(3)(4)
Tele-Communications, | | | |
Inc. Series A TCI Group | | | |
Common Stock, par value | | | |
$1.00 per share(6)..... |__ (4) |__ (4) |__ |--
Tele-Communications, | | | |
Inc. Series A Liberty | | | |
Media Group Common | | | |
Stock, par value | | | |
$1.00 per share(6)..... | | | $1,000,000,000(3) | $0(3)
Tele-Communications, | | | |
Inc. Series A TCI | | | |
Ventures Group Common | | | |
Stock, par value | | | |
$1.00 per share(6)..... __| __| __| __|
</TABLE>
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(1) In United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies.
(2) Such amount includes (i) the principal amount of any Debt Securities
issued at their principal amount and the issue price rather than the
principal amount of any Debt Securities issued at an original issue
discount, (ii) the initial offering price of shares of Series Preferred
Stock, par value $.01 per share ("Series Preferred Stock"), and (iii) the
initial offering price for shares of any of the following series of Common
Stock, par value $1.00 per share, of Tele-Communications, Inc. ("Common
Stock"): Tele-Communications, Inc. Series A TCI Group Common Stock, Tele-
Communications, Inc. Series A Liberty Media Group Common Stock, and Tele-
Communications, Inc. Series A TCI Ventures Group Common Stock. No separate
consideration will be received for shares of Common Stock that are
issuable upon conversion of Debt Securities or Series Preferred Stock that
are convertible into Common Stock. In no event will the aggregate initial
offering price of all securities registered hereby (the "Offered
Securities") exceed $2.5 billion. Such Offered Securities may be sold from
time to time separately or in any combination of units.
(3) Offered Securities having a maximum aggregate initial offering price of
$2.5 billion are registered hereby. On February 7, 1996, the registrant
paid a filing fee of $344,827.59 in connection with the filing of
Registration No. 333-00765, which filing registered $1 billion in maximum
aggregate initial offering price of Debt Securities, Series Preferred
Stock, Depositary Shares and Series A TCI Group Common Stock
(collectively, the "Previously Registered Securities") to which the
prospectus included herein relates in part. As of the date of the filing
of this registration statement, none of the Previously Registered
Securities were sold. Pursuant to Rule 429 of the Securities Act, the
registrant (i) is applying the $344,827.59 paid in connection with the
prior registration of $1 billion in maximum aggregate initial offering
price of Previously Registered Securities to the registration of $1
billion in maximum aggregate initial offering price of Offered Securities
and (ii) is paying the $442,500 registration fee associated with $1.5
billion in maximum aggregate initial offering price of Offered Securities,
calculated pursuant to Rule 457(o) of the Securities Act.
(4) The aggregate amount to be registered and the aggregate offering price per
unit have been omitted pursuant to General Instruction II.D. of Form S-3.
The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933.
(5) There are being registered an indeterminate number of Depositary Shares as
may be issued, from time to time, if the registrant elects to offer
fractional interests in shares of any Series Preferred Stock.
(6) Includes such presently indeterminate number of shares which may be (a)
issuable from time to time, (b) issuable from time to time upon conversion
of the Debt Securities and Series Preferred Stock registered hereunder and
(c) necessary to adjust the number of shares from time to time reserved
for issuance upon such conversion in accordance with the anti-dilution
provisions of the Debt Securities or Series Preferred Stock, respectively,
as a result of a stock split, stock dividend or other adjustment to or
change in the outstanding shares of Common Stock.
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.
Pursuant to Rule 429 of the Securities Act, the prospectus included herein
also relates to the registrant's registration statement on Form S-3,
Registration No. 333-00765.
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<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 THESE +
+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, DATED JUNE 11, 1998
PROSPECTUS
TELE-COMMUNICATIONS, INC.
DEBT SECURITIES
SERIES PREFERRED STOCK
DEPOSITARY SHARES
SERIES A TCI GROUP COMMON STOCK
SERIES A LIBERTY MEDIA GROUP COMMON STOCK
SERIES A TCI VENTURES GROUP COMMON STOCK
Tele-Communications, Inc. (the "Company" or "TCI") from time to time may
offer (i) debentures, notes, bonds or other evidences of indebtedness of the
Company ("Debt Securities"), (ii) shares of the Company's Series Preferred
Stock, par value $.01 per share ("Series Preferred Stock"), which may be issued
in the form of depositary shares ("Depositary Shares") evidencing depositary
receipts, and (iii) shares of Tele-Communications, Inc. Common Stock, par value
$1.00 per share ("Common Stock") in any of the following series: Tele-
Communications, Inc. Series A TCI Group Common Stock, Tele-Communications, Inc.
Series A Liberty Media Group Common Stock or Tele-Communications, Inc. Series A
TCI Ventures Group Common Stock. (Debt Securities, Series Preferred Stock,
Depositary Shares and Common Stock in respect of which this Prospectus is being
delivered are collectively referred to as the "Offered Securities"), or any
combination of the foregoing, at an aggregate initial offering price not to
exceed $2.5 billion (or the equivalent thereof denominated in one or more
foreign currencies, foreign currency units or composite currencies) 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.
Debt Securities may be offered as convertible or exchangeable Debt Securities
which will be convertible as specified in an accompanying supplement to this
Prospectus (a "Prospectus Supplement") into shares of Common Stock or
exchangeable as specified in a Prospectus Supplement into other securities
(whether or not issued by, or the obligation of, the Company) or a combination
of cash, other securities and/or property. Debt Securities may be issued as
Original Issue Discount Securities to be sold at a substantial discount below
their principal amount and, if issued, certain terms thereof will be set forth
in a Prospectus Supplement. Debt Securities may be issued in registered form
without coupons attached ("Registered Debt Securities"), in bearer form with or
without coupons attached ("Bearer Debt Securities") and in the form of one or
more global securities ("Global Securities"). See "Description of Debt
Securities." Bearer Debt Securities will be offered only to non-United States
persons (subject to certain exceptions) and to branches, located outside the
United States, of certain United States financial institutions. See
"Description of Debt Securities--Limitations on Issuance of Bearer Debt
Securities." Debt Securities may be offered as separate series in amounts, at
prices and on terms to be determined at the time of sale and set forth in a
Prospectus Supplement. Series Preferred Stock may be issued as a series of
convertible Series Preferred Stock which, unless previously redeemed or
otherwise purchased, will be convertible at any time during the conversion
period specified in a Prospectus Supplement into shares of Common Stock. Series
Preferred Stock may be offered as separate series in amounts, at prices and on
terms to be determined at the time of sale and set forth in a Prospectus
Supplement. See "Description of Series Preferred Stock." If the Company elects
to issue fractional interests in shares of a series of Series Preferred Stock,
such fractional interests will be represented by depositary receipts evidencing
Depositary Shares, each equivalent to a fractional interest in a share of such
series of Series Preferred Stock. See "Description of Depositary Shares."
Shares of Common Stock may be offered in 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 set forth in a Prospectus Supplement. See "Description of
Capital Stock--Common Stock."
Certain terms of the Offered Securities in respect of which this Prospectus
is being delivered will be set forth in a Prospectus Supplement. In the case of
Debt Securities, the Prospectus Supplement will include, where applicable, the
specific designation (including whether senior, senior subordinated or
subordinated and whether convertible or exchangeable), aggregate principal
amount, maturity (which may be fixed or extendible), interest rate or rates
(which may be fixed or variable), if any, and time of payment of interest, if
any, authorized denominations, currency or currencies in which principal,
premium, if any, and interest are payable, any terms relating to the conversion
or exchange of convertible or exchangeable Debt Securities (including the
conversion or exchange rate or the conversion or exchange price (together with
any adjustments thereto) and the period during which such Offered Securities
may be converted or exchanged), any terms for a sinking fund or for redemption,
purchase or exchange at the option of the Company or the holder (including the
form or method of payment, which may include cash, Debt Securities of another
series or other forms of consideration), any covenants or events of default
that are in addition to or different from those described herein, the
designation and qualification of any trustee with respect to the Debt
Securities, other specific terms of the Debt Securities and the terms of the
offer and sale thereof. In the case of a series of Series Preferred Stock, the
Prospectus Supplement will include the designation, the number of shares being
offered, the initial public offering price, any redemption provisions, any
conversion or exchange rights, the liquidation preference per share, the
dividend rate (or method of calculation thereof), dates on which dividends
shall be payable and dates from which dividends shall accrue, and the terms of
the offering and sale thereof. In the case of Depositary Shares, the Prospectus
Supplement will include the designation of the series of Series Preferred Stock
represented thereby, the fraction of a share of such Series Preferred Stock
represented by each Depositary Share, the number of Depositary Shares offered,
the name of the depositary and the terms of the offering and sale thereof. In
the case of Common Stock, the Prospectus Supplement will include the number of
shares being offered, the initial public offering price and terms of the
offering and sale thereof.
The Company may sell Offered Securities 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 such persons, the purchase price of the Offered
Securities sold, the proceeds to the Company from such sale, and the
compensation, if any, of such underwriters, dealers, managing underwriters,
purchasers or agents will be set forth in the Prospectus Supplement. The
Company reserves the sole right to accept and, together with its agents, from
time to time, to reject in whole or in part any proposed purchase of the
Offered Securities to be made directly or through agents. See "Plan of
Distribution" for possible indemnification arrangements for agents, dealers and
underwriters.
This Prospectus may not be used to consummate sales unless accompanied by the
Prospectus Supplement applicable to the Offered Securities being sold.
----------
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 June , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a registration statement on Form S-3
(Registration No. 333- ) (together with all amendments and exhibits
thereto, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Debt
Securities, Series Preferred Stock, Depositary Shares and Common Stock that
may be offered hereby. 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 pertaining to the Company and the Debt Securities, Series
Preferred Stock, Depositary Shares and Common Stock that may be offered
hereby, reference is 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 with the Commission under the Exchange
Act 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, and at the Regional Offices of the
Commission located at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a site on the World Wide Web that contains
reports, proxy and information statements and other information regarding
registrants (including the Company) that file electronically with the
Commission. The address of the Commission's Web site is http://www.sec.gov.
2
<PAGE>
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the Company
(File No. 0-20421) and are hereby incorporated into this Prospectus by
reference and made a part hereof:
1.The Annual Report on Form 10-K of the Company for the year ended December
31, 1997.
2.The Quarterly Report on Form 10-Q of the Company for the fiscal quarter
ended March 31, 1998.
3.The Current Reports on Form 8-K of the Company dated February 25, 1998
and March 6, 1998.
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 securities offered hereby 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 is deemed to be incorporated by reference herein
modifies or supersedes such previous 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, including any
beneficial owner, to whom this 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 certain exhibits to such documents (unless
such exhibits are specifically incorporated by reference into the documents
which this Prospectus incorporates). Such requests should be addressed to
Stephen M. Brett, Esq., Executive Vice President, Secretary and General
Counsel, Tele-Communications, Inc., Terrace Tower II, 5619 DTC Parkway,
Englewood, Colorado 80111-3000; telephone (303) 267-5500.
3
<PAGE>
THE COMPANY
The Company, through its subsidiaries and affiliates, is principally engaged
in the construction, acquisition, ownership and operation of cable television
systems and in the provision of satellite-delivered programming services to
various distribution media, principally cable television systems. Based on the
number of subscribers at March 31, 1998, the Company is one of the largest
providers of basic cable television services in the United States. 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 was incorporated in 1994. TCI Communications, Inc., a
wholly owned subsidiary of the Company, and its predecessors have been engaged
in the cable television business since the early 1950's.
The executive offices of the Company are located at Terrace Tower II, 5619
DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. Unless
the context indicates otherwise, as used in this Prospectus the "Company"
means Tele-Communications, Inc. and its consolidated subsidiaries.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities, together with
internally generated funds, may be used (i) to repay, redeem or repurchase
outstanding indebtedness of the Company, (ii) for general operations of the
Company, including acquisitions, capital expenditures and working capital
requirements or (iii) for such other purposes as may be specified in the
related Prospectus Supplement. All or a portion of such proceeds may be
advanced to affiliates of the Company in the form of loans or as a
contribution to capital.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to combined fixed charges and preferred stock
dividends of the Company was 1.46, 1.19 and 1.23 for the years ended December
31, 1996, 1994 and 1993, respectively, and 2.83 for the three months ended
March 31, 1998. The ratio of earnings to combined fixed charges and preferred
stock dividends of the Company was less than 1.00 for the years ended December
31, 1997 and 1995, and for the three months ended March 31, 1997; thus,
earnings available for combined fixed charges were inadequate to cover
combined fixed charges and preferred stock dividends for such periods. The
amounts of the coverage deficiencies were $158 million and $217 million for
the years ended December 31, 1997 and 1995, respectively, and $73 million for
the three months ended March 31, 1997. For the ratio calculations, earnings
available for fixed charges and preferred stock dividends consists of earnings
(losses) before income taxes plus fixed charges (minus capitalized interest
and preferred stock dividend requirements of the Company), distributions from
and 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.
Combined fixed charges and preferred stock dividends consist of (i) interest
(including capitalized interest) on debt, including interest related to debt
guaranteed by the Company of less than 50%-owned affiliates where the
investment in such affiliates results in the recognition of a loss, (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 expense), (iv) amortization of debt expense, (v)
that portion of minority interests in earnings (losses) of consolidated
subsidiaries that represents the amount of pretax earnings that would be
required to cover preferred stock dividend requirements of consolidated
subsidiaries, (vi) that portion of minority interests in earnings (losses) of
consolidated subsidiaries that represents dividend requirements on Company-
obligated mandatorily redeemable preferred securities of subsidiary trusts
holding solely subordinated debt securities of a subsidiary, and (vii) the
amount of pretax earnings that would be required to cover preferred stock
dividend requirements of the Company. The Company has guaranteed the debt of
certain less than 50%-owned affiliates and certain unaffiliated entities in
which it has an interest. Fixed charges of $19 million, $8 million, $8
million, $6 million and $14 million relating to such guarantees for the years
ended December 31, 1997, 1996, 1995, 1994 and 1993, respectively, and fixed
charges of $6 million and $5 million relating to such guarantees for the three
months ended March 31, 1998 and 1997, respectively, have not been included in
fixed charges because the investment in such entities does not result in the
recognition of a loss and it is not probable that the Company will be required
to honor the guarantee.
4
<PAGE>
HOLDING COMPANY STRUCTURE
The Company is a holding company and its assets consist almost entirely of
investments in its subsidiaries. As a holding company, the Company's ability
to meet its financial obligations, including any obligation to pay dividend,
interest, principal or other payments with respect to Offered Securities, is
dependent on the earnings of, or other funds available to, such subsidiaries
and the distribution or other payment of such earnings or other funds to the
Company in the form of dividends, loans or other advances, payment or
reimbursement of management fees and expenses and repayment of loans and
advances from the Company. The Company's subsidiaries are separate and
distinct legal entities and will have no obligation, contingent or otherwise,
to pay any amounts due pursuant to any Offered Securities or to make any funds
available therefor, whether by dividends, loans or other payments. The payment
of dividends or the making of loans and advances to the Company by its
subsidiaries may be subject to statutory or regulatory restrictions, are
contingent upon the earnings of those subsidiaries and are 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 loans, advances or dividends
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.
Moreover, almost all of the consolidated liabilities of the Company have
been incurred by its subsidiaries. Therefore, the Company's rights and the
rights of its creditors, including holders of any Offered Securities, 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 the
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). At March 31, 1998, the Company's subsidiaries had total Debt (as
defined in "Description of Debt Securities--General") of approximately $15.4
billion (including guarantees of indebtedness of others and the unaccreted
portion of indebtedness issued at a discount, but excluding indebtedness owed
to the Company).
5
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Company may offer Debt Securities consisting of Senior Debt Securities,
Senior Subordinated Debt Securities or Subordinated Debt Securities, any of
which Debt Securities may be issued as convertible or exchangeable Debt
Securities, or any combination of the foregoing. The Debt Securities will
represent unsecured general obligations of the Company. The Senior Debt
Securities will be senior to all subordinated indebtedness of the Company, and
pari passu (equally and ratably) with other unsecured, unsubordinated
indebtedness of the Company. The Senior Subordinated Debt Securities will be
subordinate in right of payment to certain other debt obligations of the
Company, pari passu with certain other senior subordinated indebtedness of the
Company and senior to certain other subordinated indebtedness of the Company.
The Subordinated Debt Securities will be subordinate in right of payment to
certain other debt obligations of the Company and pari passu with certain
other subordinated indebtedness of the Company. At March 31, 1998, the Company
had no Debt (as defined in "Description of Debt Securities--General")
(excluding indebtedness to subsidiaries). The Company is a holding company and
substantially all of the consolidated liabilities of the Company have been
incurred by its subsidiaries. At March 31, 1998, the Company's subsidiaries
had total Debt of approximately $15.4 billion (including guarantees of
indebtedness of others and the unaccreted portion of indebtedness issued at a
discount, but excluding indebtedness owed to the Company). At that date, the
Company's subsidiaries also had an aggregate of approximately $2.8 billion in
undrawn lines of credit (excluding amounts related to lines of credit which
provide availability to support commercial paper). The Debt Securities will be
effectively subordinated to all existing and future liabilities, including
trade payables, of the Company's subsidiaries, except to the extent that the
Company may itself be a creditor with recognized claims against such
subsidiary. See "Holding Company Structure."
The Senior Debt Securities will be issued under an Indenture to be executed
by the Company and a trustee designated in accordance with the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act") (the "Senior Indenture");
the Senior Subordinated Debt Securities will be issued under an Indenture to
be executed by the Company and a trustee designated in accordance with the
Trust Indenture Act (the "Senior Subordinated Indenture"); and the
Subordinated Debt Securities will be issued under an Indenture to be executed
by the Company and a trustee designated in accordance with the Trust Indenture
Act (the "Subordinated Indenture"). In this Prospectus, the Senior Indenture,
the Senior Subordinated Indenture and the Subordinated Indenture are sometimes
collectively referred to as the Indentures and individually as an Indenture
and the Trustee under the Senior Indenture, the Trustee under the Senior
Subordinated Indenture and the Trustee under the Subordinated Indenture are
sometimes collectively referred to as the Trustees and individually as a
Trustee. The terms of the Senior Debt Securities, the Senior Subordinated Debt
Securities and the Subordinated Debt Securities include those stated in the
respective Indentures and in any supplemental indenture, and those made part
of the Indentures by reference to the Trust Indenture Act, as in effect on the
date of the Indentures. The Indentures (or form thereof, as the case may be)
are filed as exhibits to the Registration Statement. The Debt Securities are
subject to all such terms and holders of Debt Securities are referred to the
respective Indentures and the Trust Indenture Act for a statement of such
terms. See "Additional Information."
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, all provisions of the Indentures. As used in this section
"Description of Debt Securities," unless the context indicates otherwise, the
term "Company" means Tele-Communications, Inc. and does not include any of its
subsidiaries. All other capitalized terms used in this section and not
otherwise defined have the meanings assigned to them in the Indentures.
Whenever particular sections or defined terms of each Indenture are referred
to, such sections or defined terms are incorporated by reference as part of
the statements made, and such statements are qualified in their entirety by
such reference.
GENERAL
The Indentures do not limit the amount of Debt Securities which can be
issued thereunder and provide that Debt Securities may be issued in one or
more series, in such form, with such terms and up to the aggregate principal
amount authorized from time to time by the Company. (Sections 2.01 and 2.02 of
the Indentures)
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Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities consisting of Debt Securities: (i) the designation
(including whether they are Senior Debt Securities, Senior Subordinated Debt
Securities or Subordinated Debt Securities), aggregate principal amount,
authorized denominations and currency or currencies in which principal,
premium, if any, and interest on the Offered Securities are payable; (ii)
whether the Offered Securities are to be issuable initially in temporary
global form and whether any of the Offered Securities are issuable in
permanent global form as Global Securities; (iii) whether the Offered
Securities are to be issuable as Registered Debt Securities or Bearer Debt
Securities or both; (iv) the index or indices used to determine the amount of
payments of principal, premium, if any, and interest on the Offered
Securities; (v) the percentage of their principal amount at which such Offered
Securities will be issued; (vi) the date on which the Offered Securities will
mature (which may be fixed or extendible); (vii) the rate or rates (which may
be fixed or variable) per annum, if any, at which the Offered Securities will
bear interest and the date from which such interest will accrue; (viii) the
times at which any such interest will be payable and with respect to
Registered Debt Securities the record date for the interest payable on any
interest payment date; (ix) any mandatory or optional sinking fund or
analogous provisions; (x) the date or dates, if any, on or after which, or the
circumstances under which, and the price or prices (and form or method of
payment thereof) at which the Offered Securities may be redeemed, purchased or
exchanged at the option of the Company or any holder; (xi) any terms relating
to the conversion of convertible Debt Securities, including the conversion
rate or the conversion price (together with any adjustments thereto) and the
period during which such Offered Securities may be so converted; (xii) any
terms relating to the exchange of exchangeable Debt Securities, including the
exchange rate or the exchange price (together with any adjustments thereto)
and the period during which such Offered Securities may be so exchanged;
(xiii) if any covenants or Events of Default that are in addition to or
different from those described herein; and (xiv) any other specific terms.
Reference is made to the Prospectus Supplement with respect to the designation
and qualification of the Trustee under each Indenture. The Prospectus
Supplement relating to any Offered Securities consisting of Debt Securities
will also set forth the aggregate amount of Debt of the Company as of the most
recent practicable date and (i), in the case of Offered Securities consisting
of Senior Subordinated Debt Securities, the amount of such Debt that would be
senior to or pari passu with such Senior Subordinated Debt Securities and
(ii), in the case of Offered Securities consisting of Subordinated Debt
Securities, the amount of such Debt that would be senior to or pari passu with
such Subordinated Debt Securities.
If the purchase price of any Offered Securities consisting of Debt
Securities is denominated in one or more foreign currencies, foreign currency
units or composite currencies, or if the principal, premium, if any, and
interest on any such Offered Securities are payable in one or more foreign
currencies, foreign currency units or composite currencies, the restrictions,
elections, general tax considerations, specific terms and other information
with respect to such Offered Securities and such foreign currency or
currencies or foreign currency unit or units or composite currencies will be
set forth in the applicable Prospectus Supplement.
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be sold at a substantial discount below their principal
amount ("original issue discount"). The issue price of Offered Securities that
are Original Issue Discount Securities, the amount of the original issue
discount with respect thereto, the manner and rate or rates per annum (which
may be fixed or variable) at which such original issue discount shall accrue,
the yield to maturity represented thereby, the date or dates from or to which
or period or periods during which such original issue discount shall accrue,
the portion of the principal amount of such Offered Securities that will be
payable upon acceleration of the maturity thereof or upon the optional or
mandatory redemption, purchase or exchange thereof, and any other specific
terms thereof will be described in the Prospectus Supplement relating thereto,
together with special federal income tax and other considerations applicable
to such Offered Securities.
As used in the Indentures, "Debt" of any person means: (1) any indebtedness
of such person (i) for borrowed money or (ii) evidenced by a note, debenture
or similar instrument (including a purchase money obligation) given in
connection with the acquisition of any property or assets, including
securities; (2) any guarantee by such person of any indebtedness of others
described in the preceding clause (1); and (3) any amendment, extension,
renewal or refunding of any such indebtedness or guarantee.
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Nothing in any of the Indentures affords holders of Debt Securities
protection in the event of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction involving the Company or in the
event of a change of control of the Company.
SENIOR SUBORDINATED DEBT SECURITIES
The following provisions will apply to Offered Securities that are Senior
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Offered Securities.
Subordination. The indebtedness evidenced by the Senior Subordinated Debt
Securities will be subordinate to the prior payment in full of all Senior Debt
as described below. The Indenture does not limit Senior Debt or any other
debt, secured or unsecured, of the Company or any subsidiary, except as
described under "--Limitation on Subordinated Debt Superior to the Senior
Subordinated Debt Securities" below. Upon maturity (by acceleration or
otherwise) of any Senior Debt, payment in full must be made on such Senior
Debt (or duly provided for) before any payment is made on or in respect of the
Senior Subordinated Debt Securities (except payments made in capital stock of
the Company or in warrants, rights or options to purchase or acquire capital
stock of the Company, sinking fund payments made in Senior Subordinated Debt
Securities acquired by the Company before the maturity of such Senior Debt,
and payments made through the exchange of other debt obligations of the
Company for such Senior Subordinated Debt Securities in accordance with the
terms of such Senior Subordinated Debt Securities provided that such Debt
obligations are subordinated to Senior Debt at least to the extent that the
Senior Subordinated Debt Securities for which they are exchanged are so
subordinated in accordance with the Indenture). During the continuance of any
default in payment of the principal of, premium, if any, interest on, or other
amounts due in respect of, any Senior Debt, no payment may be made by the
Company on, or in respect of, the Senior Subordinated Debt Securities (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in Senior Subordinated Debt Securities acquired by the Company
before such default and notice thereof, and payments made through the exchange
of other debt obligations of the Company for such Senior Subordinated Debt
Securities in accordance with the terms of such Senior Subordinated Debt
Securities provided that such debt obligations are subordinated to Senior Debt
at least to the extent that the Senior Subordinated Debt Securities for which
they are exchanged are so subordinated in accordance with the Indenture). Upon
any distribution of assets of the Company in any dissolution, winding up,
liquidation or reorganization of the Company, payment of all amounts due in
respect of the Senior Subordinated Debt Securities will be subordinated, to
the extent and in the manner set forth in the Indenture, to the prior payment
in full of all Senior Debt. Such subordination will not prevent the occurrence
of any Event of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the Senior
Subordinated Indenture)
Securities Senior to Junior Subordinated Debt. The indebtedness evidenced by
the Senior Subordinated Debt Securities will be superior in right of payment
to all Junior Subordinated Debt as described below. Upon maturity (by
acceleration or otherwise) of the Senior Subordinated Debt Securities of any
series, payment in full must be made thereon, or duly provided for, before any
payment is made on or in respect of any Junior Subordinated Debt (except
payments made in capital stock of the Company or in warrants, rights or
options to purchase or acquire capital stock of the Company, sinking fund
payments made in instruments evidencing Junior Subordinated Debt of the same
issue acquired before the maturity of the Senior Subordinated Debt Securities
of such series, and payments made through the exchange of other debt
obligations of the Company for such Junior Subordinated Debt in accordance
with the terms of such Junior Subordinated Debt provided that such debt
obligations are subordinated to the Senior Subordinated Debt Securities at
least to the extent that the Junior Subordinated Debt for which they are
exchanged is so subordinated in accordance with the Indenture). During the
continuance of any default in payment of the principal of, premium, if any,
interest on, or other amounts due in respect of, the Senior Subordinated Debt
Securities of any series, no payment may be made by the Company on, or in
respect of, any Junior Subordinated Debt (except payments made in capital
stock of the Company or in warrants, rights or options to purchase or acquire
capital stock of the Company, sinking fund payments made in instruments
evidencing Junior Subordinated Debt of the same issue acquired before such
default and notice
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thereof, and payments made through the exchange of other debt obligations of
the Company for such Junior Subordinated Debt in accordance with the terms of
such Junior Subordinated Debt provided that such debt obligations are
subordinated to the Senior Subordinated Debt Securities at least to the extent
that the Junior Subordinated Debt for which they are exchanged is so
subordinated in accordance with the Indenture). Upon any distribution of
assets of the Company in any dissolution, winding up, liquidation or
reorganization of the Company, holders of the Senior Subordinated Debt
Securities will be entitled to receive payment in full of all amounts due in
respect thereof before the holders of any Junior Subordinated Debt are
entitled to receive any payment on account of such Junior Subordinated Debt.
(Section 4.05 of the Senior Subordinated Indenture)
Limitation on Subordinated Debt Superior to the Senior Subordinated Debt
Securities. As long as any Senior Subordinated Debt Securities remain
outstanding, the Company may not create or incur any Debt which is subordinate
or junior in right of payment to any Senior Debt if such Debt is superior in
right of payment to the Senior Subordinated Debt Securities. (Section 4.06 of
the Senior Subordinated Indenture)
Definitions. The following are certain of the terms defined in the Senior
Subordinated Indenture (Sections 4.05 and 10.01):
"Junior Subordinated Debt" means the principal of (premium, if any) and
interest on Debt of the Company created or incurred after the date of the
Indenture which by its terms is subordinate in right of payment to the Senior
Subordinated Debt Securities, including any Subordinated Debt Securities
issued under the Subordinated Indenture.
"Senior Debt" means the principal of (premium, if any) and interest on Debt
of the Company outstanding at any time other than (i) the Senior Subordinated
Debt Securities, (ii) any Subordinated Debt Securities issued under the
Subordinated Indenture, and (iii) Debt which by its terms is not superior in
right of payment to the Senior Subordinated Debt Securities.
SUBORDINATED DEBT SECURITIES
The following provisions will apply to Offered Securities that are
Subordinated Debt Securities unless otherwise provided in the Prospectus
Supplement for such Offered Securities:
Subordination. The indebtedness evidenced by the Subordinated Debt
Securities will be subordinate to the prior payment in full of all Senior Debt
as described below. The Indenture does not limit Senior Debt or any other
debt, secured or unsecured, of the Company or any subsidiary. Upon maturity
(by acceleration or otherwise) of any Senior Debt, payment in full must be
made on such Senior Debt (or duly provided for) before any payment is made on
or in respect of the Subordinated Debt Securities (except payments made in
capital stock of the Company or in warrants, rights or options to purchase or
acquire capital stock of the Company, sinking fund payments made in
Subordinated Debt Securities acquired by the Company before the maturity of
such Senior Debt, and payments made through the exchange of other debt
obligations of the Company for such Subordinated Debt Securities in accordance
with the terms of such Subordinated Debt Securities provided that such debt
obligations are subordinated to Senior Debt at least to the extent that the
Subordinated Debt Securities for which they are exchanged are so subordinated
in accordance with the Indenture). During the continuance of any default in
payment of the principal of, premium, if any, interest on, or other amounts
due in respect of, any Senior Debt, no payment may be made by the Company on,
or in respect of, the Subordinated Debt Securities (except payments made in
capital stock of the Company or in warrants, rights or options to purchase or
acquire capital stock of the Company, sinking fund payments made in
Subordinated Debt Securities acquired by the Company before such default and
notice thereof, and payments made through the exchange of other debt
obligations of the Company for such Subordinated Debt Securities in accordance
with the terms of such Subordinated Debt Securities provided that such debt
obligations are subordinated to Senior Debt at least to the extent that the
Subordinated Debt Securities for which they are exchanged are so subordinated
in accordance with the Indenture). Upon any distribution of assets of the
Company in any dissolution, winding up, liquidation or reorganization of the
Company, payment of all amounts due in respect of the Subordinated Debt
Securities will be subordinated, to the extent and in the manner set forth in
the Indenture, to the prior payment in full of all
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Senior Debt. Such subordination will not prevent the occurrence of any Event
of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the Indenture)
"Senior Debt" means the principal of (premium, if any) and interest on Debt
of the Company outstanding at any time other than (i) the Subordinated Debt
Securities and (ii) Debt which by its terms is not superior in right of
payment to the Subordinated Debt Securities. (Section 10.01 of the
Subordinated Indenture)
DENOMINATION AND FORM
Unless otherwise indicated in the Prospectus Supplement, the Offered
Securities will be Registered Debt Securities denominated in U.S. Dollars and
will be issued only in denominations of $1,000 and integral multiples of
$1,000. (Section 2.03 of the Senior Subordinated and Subordinated Indentures
and Sections 2.01 and 2.03 of the Senior Indenture) Under the Senior
Indenture, Debt Securities of any series may be issuable as Registered Debt
Securities, Bearer Debt Securities (with or without coupons attached) or both,
and may be issuable in whole or in part in the form of one or more Global
Securities. In addition, the Senior Indenture provides that Debt Securities
may be denominated or payable in one or more foreign currencies, foreign
currency units or composite currencies. (Section 2.02 of the Senior Indenture)
Unless otherwise indicated in the applicable Prospectus Supplement, Bearer
Debt Securities denominated in U.S. Dollars will be issued only in the
denomination of $5,000 with coupons attached. (Sections 2.01 and 2.03 of the
Senior Indenture) A Global Security will be issued in a denomination equal to
the aggregate principal amount of outstanding Debt Securities represented by
such Global Security. (Section 2.10 of the Senior Indenture and Section 2.15
of the Senior Subordinated and the Subordinated Indentures) The Prospectus
Supplement relating to a series of Debt Securities denominated other than in
U.S. Dollars will specify the authorized denominations thereof.
During the "restricted period," as defined in Treasury Regulation Section
1.163-5(c)(2)(i)(D)(7), no Bearer Debt Security may be offered or sold (or
resold in connection with its original issuance) in the United States or its
possessions or to a United States person (subject to certain exceptions).
Further, no Bearer Debt Security may be mailed or otherwise delivered to any
location in the United States or its possessions in connection with a sale
that occurred during the restricted period. Offered Securities that are Bearer
Debt Securities will be subject to certification requirements as to the
ownership of such Bearer Debt Security (including beneficial interests in a
Global Security representing such Bearer Debt Security) which will be
described in the applicable Prospectus Supplement. See "Limitations on
Issuance of Bearer Debt Securities."
REGISTRAR, PAYING AGENT, CONVERSION AGENT, EXCHANGE AGENT
The Company will maintain an office or agency where Registered Debt
Securities of each series may be presented for registration of transfer or for
exchange ("Registrar"), an office or agency where Debt Securities of each
series may be presented for payment ("Paying Agent"), an office or agency
where Debt Securities of each series that is convertible may be presented for
conversion ("Conversion Agent") and an office or agency where Debt Securities
of each series that is exchangeable may be presented for exchange ("Exchange
Agent"). The Company may have one or more co-Registrars, one or more
additional Paying Agents, one or more additional Conversion Agents and one or
more additional Exchange Agents with respect to any series of Debt Securities
and the Company or any of its subsidiaries may act as Paying Agent, Registrar
or co-Registrar, Conversion Agent or Exchange Agent. Unless otherwise
indicated in an applicable Prospectus Supplement, each Trustee will initially
act as Paying Agent and Registrar for each series of Debt Securities issued
under its respective Indenture, as Conversion Agent for any series that is
convertible and as Exchange Agent for any series that is exchangeable. The
Company may change any Paying Agent, Registrar or co-Registrar, Conversion
Agent or Exchange Agent at any time without notice to the holders of Debt
Securities, except as described below with respect to Debt Securities issued
under the Senior Indenture. The Company will promptly notify the Trustee of
the name and address of any such Agent. (Section 2.05 of the Indentures)
The Senior Indenture also provides that if Debt Securities of a series are
issuable as Bearer Debt Securities, the Company will maintain (i) in the
Borough of Manhattan, The City of New York, an office or agency where
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any Registered Debt Securities of that series may be presented or surrendered
for payment and for registration of transfer, where Debt Securities of that
series may be surrendered for exchange and where Bearer Debt Securities of
that series and related coupons may be presented or surrendered for payment in
the circumstances described under "Payment" below, and (ii) subject to any
laws or regulations applicable thereto, in a place of payment for Debt
Securities of that series located outside the United States, an office or
agency where any Registered Debt Securities of that series may be surrendered
for registration of transfer, where Debt Securities of that series may be
surrendered for exchange and where Debt Securities of that series and any
related coupons may be presented and surrendered for payment, provided that if
the Debt Securities of that series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland, the Luxembourg
Stock Exchange or any other stock exchange located outside the United States
and such stock exchange shall so require, the Company will maintain a Paying
Agent for the Debt Securities of that series in London, Luxembourg or any
other required city located outside the United States, as the case may be, so
long as the Debt Securities of that series are listed on such exchange. Any
Paying Agents outside the United States initially designated by the Company
for the Offered Securities will be named in the applicable Prospectus
Supplement. The Company will promptly notify the Trustee and the holders of
Debt Securities of a series of the location and any change in the location of
any office or agency which it is required to maintain for the Debt Securities
of such series. (Section 4.01 of the Senior Indenture)
TRANSFER AND EXCHANGE
Registered Debt Securities of any series (other than a Global Security,
except as provided under "Global Securities") will be exchangeable at the
option of the holder for other Registered Debt Securities of the same series
of any authorized denominations and of a like aggregate principal amount and
tenor. (Section 2.08 of the Indentures) In addition, if Debt Securities of any
series issued under the Senior Indenture are issuable as both Registered Debt
Securities and Bearer Debt Securities, then, if so provided with respect to
the Debt Securities of such series, at the option of the holder and subject to
the terms of such Indenture, Bearer Debt Securities (with, except as provided
below, all related unmatured coupons and all related matured coupons in
default) of such series will be exchangeable for Registered Debt Securities of
the same series of any authorized denominations and of a like aggregate
principal amount and tenor. Bearer Debt Securities surrendered in exchange for
Registered Debt Securities between a regular record date or, in certain
circumstances, a special record date, for an interest payment and the relevant
interest payment date shall be surrendered without the coupon relating to such
interest payment date attached and interest will not be payable on such
interest payment date in respect of the Registered Debt Security issued in
exchange for such Bearer Debt Security, but will be payable only to the holder
of such coupon in accordance with the terms of the Senior Indenture. Unless
otherwise specified in the applicable Prospectus Supplement, Bearer Debt
Securities will not be issued in exchange for Registered Debt Securities.
(Section 2.08 of the Senior Indenture)
Debt Securities of any series may be surrendered for exchange as provided
above, and Registered Debt Securities of any series (other than a Global
Security, except as provided under "Global Securities") may be surrendered for
registration of transfer, at the office or agency designated by the Company
for such purpose with respect to such series of Debt Securities. Bearer Debt
Securities will be transferable by delivery. (Section 2.14 of the Senior
Indenture) Every Registered Debt Security presented or surrendered for
registration of transfer or for exchange shall be duly endorsed or accompanied
by appropriate transfer documents duly executed. No service charge will be
made for any registration of transfer or exchange of Debt Securities, but the
Company may require payment of a sum sufficient to cover any taxes and other
governmental charges that may be imposed in relation thereto. (Section 2.08 of
the Indentures)
The Company and the Registrar need not transfer or exchange any Debt
Securities selected for redemption or purchase (except, in the case of Debt
Securities to be redeemed or purchased in part, the portion thereof not to be
redeemed or purchased) or any Debt Securities in respect of which a notice
requiring the purchase or redemption thereof by the Company at the option of
the holder thereof has been given and not withdrawn by such holder in
accordance with the terms of such Debt Securities (as described, if
applicable, in the Prospectus Supplement) (except, in the case of Debt
Securities to be so purchased or redeemed in part, the portion thereof
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not to be so purchased or redeemed). (Section 2.08 of the Indentures) A Bearer
Debt Security so selected for redemption or purchase or in respect of which a
notice requiring the redemption or purchase thereof by the Company at the
option of the holder thereof has been given and not so withdrawn may however,
if so provided with respect to the Debt Securities of such series, be
exchanged for a Registered Debt Security of that series and like tenor,
provided that such Registered Debt Security is simultaneously surrendered for
redemption or purchase, as the case may be. (Section 2.08 of the Senior
Indenture)
The Senior Subordinated Indenture and the Subordinated Indenture also
provide that the Registrar need not transfer or exchange any Debt Securities
of a particular series during a period of 15 days before a selection of Debt
Securities of such series to be redeemed. (Section 2.08 of the Senior
Subordinated and the Subordinated Indentures) The Senior Indenture provides
that the Company shall not be required to issue, register the transfer of or
exchange Debt Securities of any series during a period beginning at the
opening of business 15 days before any selection of Debt Securities of that
series to be redeemed and ending at the close of business on (i) if Debt
Securities of that series are issuable only as Registered Debt Securities, the
date of the mailing of the relevant notice of redemption, and (ii) if Debt
Securities of that series are issuable as Bearer Debt Securities, the date of
the first publication of the relevant notice of redemption or, if Debt
Securities of that series are also issuable as Registered Debt Securities and
there is no publication, the mailing of the relevant notice of redemption.
(Section 2.08 of the Senior Indenture)
Prior to due presentment of a Registered Debt Security for registration to
transfer, the person in whose name such Registered Debt Security is registered
may be treated as the owner of it for all purposes. (Section 2.14 of the
Indentures) The bearer of any Bearer Debt Security and the bearer of any
coupon appertaining thereto may be treated as the owner of such Bearer Debt
Security or coupon for all purposes. (Section 2.14 of the Senior Indenture)
GLOBAL SECURITIES
The Indentures provide that the Debt Securities of any series thereunder may
be issued in whole or in part in the form of one or more Global Securities,
which Global Securities may be issued in registered form (or, in the case of
Senior Debt Securities, bearer form) and in either temporary or permanent
form. (Sections 2.10 and 2.11 of the Senior Indenture and Sections 2.11 and
2.15 of the Senior Subordinated and Subordinated Indentures) Each Global
Security will be deposited with and, if it is issued in registered form, will
be registered in the name of the depositary (or a nominee of the depositary)
identified in the applicable Prospectus Supplement. (Section 2.10 of the
Senior Indenture and Section 2.15 of the Senior Subordinated and Subordinated
Indentures) So long as the depositary for a Global Security in registered
form, or its nominee, is the registered owner of the Global Security, the
depositary or its nominee, as the case may be, will be considered the sole
owner of the Debt Securities represented by such Global Security for all
purposes under the Indenture. (Section 2.14 of the Indentures) Unless and
until it is exchanged in whole or in part for Debt Securities in definitive
form, a Global Security may not be transferred except as a whole by the
depositary for such Global Security to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by the depositary or any nominee to a successor depositary or
any nominee of such successor. (Section 2.08 of the Indentures) Unless
otherwise specified in the applicable Prospectus Supplement, if the depositary
with respect to any Global Security is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days of such time, or if the Company, in
its sole discretion, at any time determines that any series of Debt Securities
issued or issuable in the form of a Global Security shall no longer be
represented by such Global Security, then in either such event the Global
Security shall be exchanged for Debt Securities in definitive form pursuant to
the applicable Indenture. Further, if so specified by the Company with respect
to the Debt Securities of a series and described in the applicable Prospectus
Supplement, an owner of a beneficial interest in a Global Security
representing Debt Securities of such series may, on terms acceptable to the
Company and the depositary for such Global Security, receive Debt Securities
of such series in definitive form. In any such instance, an owner of a
beneficial interest in a Global Security will be entitled to physical delivery
in definitive form of Debt Securities in authorized denominations and of like
tenor of the series represented by such Global Security, equal in principal
amount to such beneficial interest, and
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to have such Debt Securities registered in its name (if the Debt Securities of
such series are issuable as Registered Debt Securities). (Section 2.08 of the
Indentures) See, however, "--Limitations on Issuance of Bearer Debt
Securities" below for a discussion of certain restrictions on the delivery of
a Bearer Debt Security in definitive form in exchange for an interest in a
Global Security. Except as described above, unless otherwise specified in the
applicable Prospectus Supplement, owners of beneficial interests in a Global
Security will not be entitled to have Debt Securities of the series
represented by such Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Debt Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the applicable Indenture.
Any specific terms of the depositary arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement. The Company anticipates that the following provisions
will apply to all depositary arrangements.
Upon the issuance of a Global Security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Security to the accounts of
participants. Ownership of beneficial interests in a Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the depositary (with respect to beneficial interests of
participants in the depositary), or by participants in the depositary or
persons that may hold interest through such participants (with respect to
beneficial interests of persons other than participants in the depositary).
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that hold interests through participants.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Debt Securities" below, payments of the principal of and any premium
and interest on Debt Securities registered in the name of or held by a
depositary or its nominee will be made to the depositary or its nominee, as
the case may be, as the registered owner or the holder of the Global Security
representing such Debt Securities. None of the Company, the Trustee, any
Paying Agent or the Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in Global Security
for such debt Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. (Section 2.14 of the
Indentures)
The Company expects that the depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
Global Security, will credit immediately participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security as shown on the records of such
depositary. The Company also expects that payments by participants to owners
of beneficial interests in such Global Security held through such participants
will be governed by standing instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants. With respect to a Global Security that represents in whole or in
part Debt Securities of a series that are issuable as Bearer Debt Securities,
receipt by owners of beneficial interests in such Global Security of payments
in respect of such Global Security will be subject to the restrictions
discussed under "Limitations on Issuance of Bearer Debt Securities" below.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Debt Securities (including beneficial interests in a Global Security that
represents Bearer Debt Securities) may not be offered or sold (or resold in
connection with their original issuance) during the "restricted period," as
defined in Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7), in the United
States or its possessions or to United States persons (each as defined below)
other than to (i) a Qualifying Foreign Branch of a United States Financial
Institution (as defined below), (ii) a United States person who acquires and
holds the obligation through the Qualifying Foreign
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Branch of a United States Financial Institution, (iii) a United States office
of an "exempt distributor," as defined in Treasury Regulation Section 1.163-
5(c)(2)(i)(D)(5), (iv) the United States office of an international
organization, as defined in Section 7701(a)(18) of the Internal Revenue Code
of 1986, as amended (the "Code") and the regulations thereunder, or (v) the
United States office of a foreign central bank, as defined in Section 895 of
the code and the regulations thereunder. In addition, Bearer Debt Securities
may not be delivered within the United States or its possessions in connection
with a sale that occurred during the restricted period. Any underwriters,
agents and dealers participating in the offering of Offered Securities must
agree that they will not offer any Bearer Debt Securities for sale or resale
in the United States or its possessions or the United States persons (other
than a person specified in clause (i), (ii), (iii), (iv) or (v) above) or
deliver Bearer Debt Securities within the United States or its possessions.
The term "Qualifying Foreign Branch of a United States Financial Institution"
means a branch located outside the United States of a United States financial
institution (as defined in Treasury Regulation Section 1.165-12(c)(1)(v)
before January 1, 1999 and in Treasury Regulation Section 1.165-12(c)(1)(iv)
on and after such date) that provides a certificate within a reasonable time
(or a blanket certificate in the year the Debt Security is issued or either of
the preceding two calendar years) stating that it agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Code and the
regulations thereunder. The term "United States person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any
political subdivision thereof, an estate the income of which is subject to
United States federal income taxation regardless of its source and a trust if
(i) a court in the United States is able to exercise primary supervision over
the administration of the trust, and (ii) one or more United States
fiduciaries have authority to control all substantial decisions of the trust.
The term "United States" means the United States of America (including the
States and the District of Columbia), and the term "possessions" includes, but
is not limited to, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa,
Wake Island and the Northern Mariana Islands.
United States federal tax laws and regulations also require that the owner
of an obligation issuable in bearer form or the financial institution (as
defined in the preceding paragraph) or clearing organization through which the
owner directly or indirectly holds such obligation must provide the issuer of
the obligation with a certificate on the earlier of the date of the first
actual payment of interest on the obligation or the date of delivery by the
issuer of the obligation in definitive form stating that on such date the
obligation is owned by (a) a person that is not a United States person, (b) a
person described in clause (i) or (ii) of the preceding paragraph, or (c) a
financial institution for purposes of resale during the restricted period, but
not for resale directly or indirectly to a United States person or to a person
within the United States or its possessions. A certificate described in clause
(a) or (b) above may not be given with respect to an obligation that is owned
by a financial institution for purposes of resale during the restricted
period. When the required certificate is provided by a clearing organization,
the certificate must be based upon statements provided to it by its member
organizations. For purposes of the foregoing, a "temporary global security,"
as defined in Treasury Regulation Section 1.163-5(c)(1)(ii)(B), is not
considered to be an obligation in definitive form. In compliance with the
foregoing, if the Offered Securities are of a series of Debt Securities
issuable as Bearer Debt Securities, the delivery thereof (including delivery
in exchange for an interest in a Global Security) and the payment of interest
thereon, as applicable, will be subject to the satisfaction of certification
requirements that will be specified by the Company in accordance with the
Senior Indenture in connection with the establishment of such series and will
be described in the applicable Prospectus Supplement. (Sections 2.02 and 2.04
of the Senior Indenture) The Senior Indenture also provides that no Bearer
Debt Security (including a Global Security that represents Bearer Debt
Securities) will be mailed or otherwise delivered to any location in the
United States or its possessions. (Section 2.04 of the Senior Indenture)
Bearer Debt Securities and any coupons appertaining thereto will bear a
legend substantially to the following effect: "Any United States person who
holds this obligation will be subject to limitations under the United States
income tax laws, including the limitations provided in Sections 165(j) and
1287(a) of the Internal Revenue Code." Under Sections 165(j) and 1287(a) of
the Code, holders that are United States persons, with certain exceptions,
will not be entitled to deduct any loss on Bearer Debt Securities and must
treat as ordinary income any gain realized on the sale or other disposition
(including the receipt of principal) of Bearer Debt Securities.
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PAYMENT
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Debt Securities (other
than a Global Security) will be made, subject to any applicable laws and
regulations, at the offices of such Paying Agent or Paying Agents outside the
United States as the Company may designate from time to time, except that, at
the option of the Company (or, if so specified in the applicable Prospectus
Supplement, at the option of the holder), payment of interest may be made by
check (provided the same is not mailed to an address inside the United States)
or by wire transfer to an account located outside the United States maintained
by the payee. (Sections 2.13 and 4.01 of the Senior Indenture) Unless
otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Debt Securities on any interest payment date will be made
only against surrender of the coupon relating to such interest payment date.
(Section 2.13 of the Senior Indenture) No payment with respect to any Bearer
Debt Security will be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained in the United States. Notwithstanding the
foregoing, payments of principal of and any premium and interest on Bearer
Debt Securities denominated and payable in U.S. Dollars will be made at the
office of the Company's Paying Agent in the Borough of Manhattan, The City of
New York, if (but only if) payment of the full amount thereof in U.S. Dollars
at all offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 4.01 of
the Senior Indenture)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Debt Securities
(other than a Global Security) will be made at the office of such Paying Agent
or paying Agents as the Company may designate from time to time, except that
at the option of the Company payment of any interest may be made by check
mailed to the address of the person entitled thereto as such address shall
appear in the security register or, if so specified with respect to the
Registered Debt Securities of any series issued under the Senior Indenture, by
wire transfer to an account designated by such person. Payment of any
installment of interest on Registered Debt Securities will be made to the
person in whose name such Registered Debt Security is registered at the close
of business on the regular record date (or, in the case of defaulted interest,
special record date) for such interest payment. (Section 2.13 of the
Indentures)
All moneys paid by the Company to a Paying Agent for the payment of
principal of or any premium or interest on any Debt Security that remains
unclaimed for two years will be repaid to the Company and the holders of Debt
Securities or any coupon appertaining thereto will thereafter look only to the
Company for payment thereof unless an applicable abandoned property law
designates another person. (Section 8.03 of the Indentures)
AMENDMENT, SUPPLEMENT, WAIVER
Subject to certain exceptions, the Indentures or the Debt Securities may be
amended or supplemented, and any past default or compliance with any provision
may be waived, insofar as the Debt Securities of any series are concerned,
with the consent of the holders of a majority in aggregate principal amount of
the outstanding Debt Securities of such series. (Sections 6.04 and 9.02 of the
Indentures) Without the consent of any holder of Debt Securities, the Company
and the Trustee may amend or supplement the Indentures or the Debt Securities
to cure any ambiguity, defect or inconsistency, to permit or facilitate the
issuance of Debt Securities in bearer form or to provide for uncertificated
Debt Securities in global form in addition to certificated Debt Securities (so
long as any "registration-required obligation," within the meaning of Section
163(f)(2) of the Code, is in registered form for purposes of the Code) or to
make certain other specified changes or any change that does not materially
adversely affect the rights of any holder of Debt Securities. (Section 9.01 of
the Indentures)
SUCCESSOR CORPORATION
The Company may not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another entity unless
(i) the successor entity which shall be an entity organized under the laws of
the United States or a State thereof, assumes by supplemental indenture all
the obligations of the Company under the Debt Securities and the Indentures,
and (ii) after giving effect to such transaction, no Event of Default shall
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have occurred and be continuing. Thereafter, unless otherwise specified in the
Prospectus Supplement, all such obligations of the Company terminate. (Section
5.01 of the Indentures)
DEFAULTS AND REMEDIES
An Event of Default with respect to Debt Securities of any series is: (i)
default for 30 days in payment of any interest on the Debt Securities of that
series; (ii) default in payment of principal, premium or any other amount
(other than interest) due in respect of the Debt Securities of that series at
maturity, upon redemption (including default in the making of any mandatory
sinking fund payment), upon purchase by the Company at the option of the
holder or otherwise; (iii) failure by the Company for 60 days after receipt of
written notice as provided in the Indentures to comply with any of its other
agreements in the Indentures (other than agreements expressly included in the
Indentures solely for the benefit of a series of Debt Securities other than
that series or expressly made inapplicable to the Debt Securities of such
series) or the Debt Securities of that series; and (iv) certain events of
bankruptcy or insolvency. (Section 6.01 of the Indentures) If an Event of
Default occurs with respect to the Debt Securities of any series and is
continuing, the Trustee or the holders of at least 25% in aggregate principal
amount of the Debt Securities of that series may declare to be due and payable
immediately (i) the principal amount of that series (or, if the Debt
Securities of that series are Original Issue Discount Securities, that portion
of the principal amount specified in the terms of that series) and (ii)
accrued interest, if any, thereon. The Indentures provide for automatic
acceleration of the maturity of such amounts upon the occurrence of certain
events of bankruptcy or insolvency. (Section 6.02 of the Indentures) Holders
of Debt Securities may not enforce the Indentures or the Debt Securities
except as provided in the Indentures. (Section 6.06 of the Indentures) The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities. (Section 7.01 of the Indentures) Subject to
certain limitations, holders of a majority in aggregate principal amount of
the Debt Securities of any series may direct the Trustee in its exercise of
any trust or power with respect to the Debt Securities of that series.
(Section 6.05 of the Indentures) The Trustee may withhold from holders of Debt
Securities notice of any continuing default (except a default in payment of
principal, premium, if any, interest or other amounts due) if it determines
that withholding notice is in their interest. (Section 7.05 of the Indentures)
The Company is required to file periodic reports with the Trustee as to the
absence of default. (Section 4.07 of the Senior Indenture and Section 4.03 of
the Senior Subordinated and Subordinated Indentures)
NO PERSONAL LIABILITY
No past, present or future director, officer, employee or stockholder, as
such, of the Company or any successor thereof shall have any liability for any
obligations of the Company under the Debt Securities or the Indentures or for
any claim based on, in respect of, or by reason of, such obligations or their
creation. Each holder of Debt Securities by accepting a Debt Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Debt Securities. (Section 10.11 of the
Senior Indenture and Section 11.11 of the Senior Subordinated and Subordinated
Indentures)
SATISFACTION AND DISCHARGE
The Company's obligations under the Debt Securities of any series and the
applicable Indenture with respect to such series (except for the obligation to
pay the principal of and premium and interest, if any, on the Debt Securities
of such series and certain other specified obligations) will be satisfied and
discharged in accordance with the provisions of the Indenture if either (i)
all Debt Securities of such series and coupons, if any, appertaining thereto
previously authenticated and delivered (other than destroyed, lost or
wrongfully-taken Debt Securities or coupons which have been replaced or paid
and Debt Securities or coupons for whose payment money has theretofore been
held in trust and, after remaining unclaimed for two years, has been repaid to
the Company) have been delivered to the Trustee for cancellation or (ii) the
Company irrevocable deposits in trust with the Trustee money or U.S.
Government Obligations (or, in the case of the Senior Indenture, Government
Obligations) sufficient to pay the principal of and premium and interest, if
any, on all Debt Securities of such series and coupons, if any, appertaining
thereto not theretofore cancelled or delivered to the Trustee for
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cancellation (other than Debt Securities and coupons referred to in the
parenthetical in clause (i) above) to maturity or redemption, as the case may
be. (Section 8.01 of the Indentures)
THE TRUSTEES
Information with respect to the Trustees under the Senior Indenture, the
Senior Subordinated Indenture and the Subordinated Indenture shall be provided
in the applicable Prospectus Supplement.
Any Trustee in its individual or any other capacity may become the owner or
pledgee of Debt Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not the Trustee
provided it complies with the terms of the Indenture. (Section 7.03 of the
Indentures)
ADDITIONAL INFORMATION
The Indentures (or form thereof, as the case may be) are exhibits to the
Registration Statement. Anyone who receives this Prospectus may obtain copies
of the Indentures (or form thereof, as the case may be) without charge by
writing to Stephen M. Brett, Esq., Executive Vice President of the Company, at
the address set forth under "The Company." The foregoing summaries of certain
provisions of the Indentures do not purport to be complete and are subject to,
and qualified in their entirety by reference to, all provisions of the
Indentures, including the definitions of certain terms. Wherever particular
provisions or defined terms of the Indentures are referred to, such provisions
or defined terms are incorporated herein by reference.
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DESCRIPTION OF SERIES PREFERRED STOCK
GENERAL
The Company is authorized to issue up to 50,000,000 shares of Series
Preferred Stock. The Series Preferred Stock is issuable, from time to time, in
one or more series, with such powers, designations, preferences and relative
participating, optional or other rights, and qualifications, limitations or
restrictions thereof, as is stated and expressed in a resolution or
resolutions providing for the issue of each 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. Except to the extent otherwise
provided in the resolution or resolutions providing for the issue of any
series of Series Preferred Stock, the holders of shares of such series will
have no voting rights except as may be required by Delaware law. As of the
date of this Prospectus, there are five series of Series Preferred Stock
outstanding. See "Description of Capital Stock--Preferred Stock."
As described under "Description of Depositary Shares," 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 Series Preferred Stock) of a
share of the particular series of Series Preferred Stock, issued and deposited
with a depositary, in lieu of offering any shares of such Series Preferred
Stock. See "Description of Depositary Shares."
Series Preferred Stock constituting Offered Securities shall have the
dividend, liquidation, redemption, and voting rights set forth below unless
otherwise provided in a Prospectus Supplement relating to such Series
Preferred Stock. Reference is made to the Prospectus Supplement relating to a
particular series of the Series Preferred Stock offered thereby for specific
terms, including: (a) the designation of such series of Series 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 series of Series
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 rates; (g) whether the
Company has elected to offer Depositary Shares as described below under
"Description of Depositary Shares;" (h) any voting rights; and (i) any other
rights, preferences, privileges, limitations, and restrictions of such series
of Series Preferred Stock.
Each series of Series Preferred Stock, when issued, will be fully paid and
nonassessable and will have no preemptive rights. The rights of the holders of
each series of the Series 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 such series of Series Preferred Stock as to the
payment of dividends, rights of redemption and rights on liquidation,
including the TCI Group Common Stock (as defined below) and the Liberty Group
Common Stock (as defined below).
DIVIDEND RIGHTS
Holders of a series of Series Preferred Stock constituting Offered
Securities will be entitled to receive, when, as, and if declared by the Board
of Directors, 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 Series 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, as
specified in the Prospectus Supplement relating to such series of Series
Preferred Stock.
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement relating to such series of Series Preferred Stock. If
the Board of Directors fails to declare a dividend payable on a dividend
payment date on any series of Series Preferred Stock for which dividends are
noncumulative, then the right to
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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 Series 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 Series
Preferred Stock constituting Offered Securities for the immediately preceding
dividend period (or, if such series is cumulative, for all prior dividend
periods), and until such dividends (or, if such series of Series 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
Series Preferred Stock, except for dividends declared and paid on any such
stock ranking on a parity basis with such series of Series Preferred Stock
contemporaneously and on a pro rata basis with dividends declared and paid on
such series of Series Preferred Stock, or (ii) redeem or otherwise acquire any
shares of such series of Series Preferred Stock, any parity stock, or any
junior stock unless all then outstanding shares of such series of Series
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. Unless otherwise
specified in the applicable Prospectus Supplement, the failure of the Company
to pay, or declare and set aside the consideration sufficient to pay, full
dividends (or, if such series of Series Preferred Stock is cumulative, full
cumulative dividends) on any series of Series 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 Series Preferred Stock or
parity stock solely in exchange for shares of junior stock.
LIQUIDATION PREFERENCES
In the event of any liquidation, dissolution, or winding up of the Company,
whether voluntary or involuntary, the holders of each series of Series
Preferred Stock constituting Offered Securities 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 Series Preferred
Stock, the amount set forth in the Prospectus Supplement relating to such
series of Series 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
Series Preferred Stock and any other shares of capital stock of the Company
ranking on a parity with shares of such series of Series Preferred Stock upon
liquidation will not be sufficient to pay in full all amounts to 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 series of Series Preferred Stock unless
proportionate distributative amounts are paid on account of shares of such
series of Series 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 such series of Series 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
Offered Securities consisting of a series of Series 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
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Prospectus Supplement, shares of a series of Series Preferred Stock redeemed
by the Company will be restored to the status of authorized but unissued
shares of Series Preferred Stock.
Unless otherwise specified in the applicable Prospectus Supplement, in the
event that fewer than all of the outstanding shares of a series of Series
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 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 such series of Series
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 Series Preferred Stock
constituting Offered Securities 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 Series 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 Series
Preferred Stock, parity stock or junior stock. Unless otherwise specified in
the applicable Prospectus Supplement, the failure of the Company to so redeem
shares of such series of Series 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
series of Series Preferred Stock or parity stock solely in exchange for shares
of parity stock or junior stock (or both).
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DESCRIPTION OF DEPOSITARY SHARES
Offered Securities may consist of Depositary Shares represented by
Depositary Receipts (as defined below), with each Depositary Share equivalent
to a fractional interest in a share of a particular series of Series Preferred
Stock as specified in an accompanying Prospectus Supplement. 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 Series Preferred Stock, forms of which are
filed as exhibits to the Registration Statement of which this Prospectus forms
a part.
GENERAL
The Company may, at its option, elect to offer interests in fractions of
shares of a series of Series Preferred Stock in lieu of shares of such series
of Series Preferred Stock. In such event, the Company will provide for the
issuance by a Depositary of receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent an interest in a fraction (to be set
forth in the related Prospectus Supplement) of a share of a particular series
of the Series Preferred Stock as described below.
The shares of any series of Series 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 such Depositary Shares and the series of Series
Preferred Stock represented thereby 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 a series of Series Preferred Stock underlying such Depositary
Share, to all the rights and preferences of the series of Series 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 a series of Series 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 a
series of Series 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.
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REDEMPTION OF DEPOSITARY SHARES
If a series of Series 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 Series 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
Series Preferred Stock. Whenever the Company redeems shares of a series of
Series 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 such series of Series 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.
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 Series Preferred Stock underlying the Depositary Shares, or (ii) the
Depositary shall receive notice of any meeting at which holders of shares of
such series of Series Preferred Stock are entitled to vote or of which holders
of shares of such series of Series Preferred Stock are entitled to notice, or
of any election on the part of the Company to call for redemption any shares
of such series of Series 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 series of Series 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 Series 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 series of
Series 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 series
of Series Preferred Stock) will be entitled to instruct the Depositary as to
the exercise of the voting rights pertaining to the number of shares of the
series of Series Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the
number of shares of the series of Series 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 a series of Series
Preferred Stock to the extent it does not receive specific written voting
instructions from the holders of Depositary Shares representing such series of
Series Preferred Stock.
WITHDRAWAL OF UNDERLYING PREFERRED STOCK
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 the series of Series Preferred Stock (but
only in whole shares of
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such series of Series 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 the series of Series 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 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 series of Series 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 shares of the series of Series 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 hereon, 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 Series
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 series of Series Preferred
Stock is entitled to vote, withdrawals of shares of such series of Series
Preferred Stock, or redemption or conversion of shares of such series of
Series 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 Series 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.
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DESCRIPTION OF CAPITAL STOCK
The following description of certain terms of the Company's common stock,
par value $1.00 per share ("Common Stock"), and Preferred Stock (defined
below) does not purport to be complete and is qualified in its entirety by
reference to the Restated Certificate of Incorporation, as amended, of the
Company (including the Certificate of Designations with respect to each
outstanding series of Series Preferred Stock) (the "Charter"), each of which
is incorporated herein by reference.
GENERAL
The Charter currently provides that the Company is authorized to issue
3,602,375,096 shares of capital stock, including (i) 3,550,000,000 shares of
Common Stock, of which 1,750,000,000 shares are designated Series A TCI Group
Common Stock (the "Series A TCI Group Common Stock"), 150,000,000 shares are
designated Series B TCI Group Common Stock (the "Series B TCI Group Common
Stock" and, together with the Series A TCI Group Common Stock, the "TCI Group
Common Stock"), 750,000,000 shares are designated Series A Liberty Media Group
Common Stock (the "Series A Liberty Media Group Common Stock"), 75,000,000
shares are designated Series B Liberty Media Group Common Stock (the "Series B
Liberty Media Group Common Stock" and, together with the Series A Liberty
Media Group Common Stock, the "Liberty Media Group Common Stock"), 750,000,000
shares are designated Series A TCI Ventures Group Common Stock (the "Series A
TCI Ventures Group Common Stock") and 75,000,000 shares are designated Series
B TCI Ventures Group Common Stock (the "Series B TCI Ventures Group Common
Stock" and, together with the Series A TCI Ventures Group Common Stock, the
"TCI Ventures Group Common Stock") and (ii) 52,375,096 shares of preferred
stock (the "Preferred Stock"), of which 700,000 shares are designated Class A
Preferred Stock, par value $.01 per share (the "Class A Preferred Stock"),
1,675,096 shares are designated Class B 6% Cumulative Redeemable Exchangeable
Junior Preferred Stock, par value $.01 per share (the "Class B Preferred
Stock") and 50,000,000 shares are designated as Series Preferred Stock,
issuable in series. Of the Series Preferred Stock, 70,575 shares are
designated as Convertible Preferred Stock, Series C-TCI Group (the "Series C-
TCI Group Preferred Stock"), 70,575 shares are designated as Convertible
Preferred Stock, Series C-Liberty Media Group (the "Series C-Liberty Media
Group Preferred Stock"), 1,000,000 shares are designated as Convertible
Preferred Stock, Series D (the "Series D Preferred Stock"), 400,000 shares are
designated as Redeemable Convertible Preferred Stock, Series E (the "Series E
Preferred Stock"), 500,000 shares are designated Convertible Redeemable
Participating Preferred Stock, Series F (the "Series F Preferred Stock"),
7,259,380 shares are designated as Redeemable Convertible TCI Group Preferred
Stock, Series G (the "Series G Preferred Stock"), and 7,259,380 shares are
designated as Redeemable Convertible Liberty Media Group Preferred Stock,
Series H (the "Series H Preferred Stock"). All of the shares of Class A
Preferred Stock have previously been redeemed and retired and may not be
reissued, thereby reducing the number of authorized shares of Preferred Stock.
On April 1, 1998, all of the outstanding shares of Series D Preferred Stock
were redeemed to the extent not previously converted by the holders thereof
pursuant to the terms thereof, with the effect that all shares so redeemed or
converted have been restored to the status of authorized and unissued shares
of Series Preferred Stock, and may be reissued as shares of another series of
Series Preferred Stock but may not be reissued as Series D Preferred Stock.
All of the shares of Series E Preferred Stock have previously been redeemed
and retired, with the effect that such shares have been restored to the status
of authorized and unissued shares of Series Preferred Stock, and may be
reissued as shares of another series of Series Preferred Stock but may not be
reissued as Series E Preferred Stock.
COMMON STOCK
As of March 31, 1998, (i) 472,051,958 shares of Series A TCI Group Common
Stock (net of treasury stock and shares held by subsidiaries of the Company),
50,136,615 shares of Series B TCI Group Common Stock (net of treasury stock
and shares held by subsidiaries of the Company), 326,167,303 shares of Series
A Liberty Media Group Common Stock (net of treasury stock and shares held by
subsidiaries of the Company), 31,592,574 shares of Series B Liberty Media
Group Common Stock (net of treasury stock and shares held by subsidiaries of
the Company), 377,021,252 shares of Series A TCI Ventures Group Common Stock
(net of treasury stock) and
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45,460,536 shares of Series B TCI Ventures Group Common Stock (net of treasury
stock) had been issued and were outstanding, (ii) 22,902,820 shares of Series
A TCI Group Common Stock, 30,876,766 shares of Series B TCI Group Common
Stock, 25,126,455 shares of Series A Liberty Media Group Common Stock, 82,074
shares of Series B Liberty Media Group Common Stock, 13,259,792 shares of
Series A TCI Ventures Group Common Stock and 432,196 shares of Series B TCI
Ventures Group Common Stock were held by the Company as treasury stock, and
(iii) 125,645,656 shares of Series A TCI Group Common Stock, 9,112,500 shares
of Series B TCI Group Common Stock, 6,654,367 shares of Series A Liberty Media
Group Common Stock and 3,417,187 shares of Series B Liberty Media Group Common
Stock were held by subsidiaries of the Company. As of that date, 99,247,030
shares of Series A TCI Group Common Stock, 39,286,137 shares of Series A
Liberty Media Group Common Stock and 34,412,229 shares of Series A TCI
Ventures Group Common Stock were reserved for issuance upon conversion,
exchange or exercise of outstanding convertible or exchangeable securities
(other than the Series B TCI Group Common Stock, the Series B Liberty Media
Group Common Stock and the Series B TCI Ventures Group Common Stock, and other
than the Series F Preferred Stock held by subsidiaries of the Company) and
options. In addition, the Company has reserved a number of shares of Series A
TCI Group Common Stock equal to the number of shares of Series B TCI Group
Common Stock outstanding, a number of shares of Series A Liberty Media Group
Common Stock equal to the number of shares of Series B Liberty Media Group
Common Stock outstanding and a number of shares of Series A TCI Ventures Group
Common Stock equal to the number of shares of Series B TCI Ventures Group
Common Stock outstanding, in either case for issuance upon conversion, at the
option of the holder, of the Series B TCI Group Common Stock, the Series B
Liberty Media Group Common Stock and the Series B TCI Ventures Group Common
Stock, respectively. Additionally, subsidiaries of the Company own shares of
Series F Preferred Stock, which are convertible into an aggregate of
416,528,172 shares of Series A TCI Group Common Stock.
Certain Definitions
As used herein, the following terms have the meanings specified below:
"Adjusted Liberty Media Group Outstanding Interest Fraction" means a
fraction the numerator of which is the number of outstanding shares of Liberty
Media Group Common Stock and the denominator of which is the sum of (a) such
number of outstanding shares, (b) the Number of Shares Issuable with Respect
to the Liberty Media Group Inter-Group Interest, (c) the number of shares of
Liberty Media Group Common Stock issuable upon conversion, exercise or
exchange of Pre-Distribution Convertible Securities and (d) the number of
Committed Acquisition Shares issuable.
"Adjusted TCI Ventures Group Outstanding Interest Fraction" means a fraction
the numerator of which is the number of outstanding shares of TCI Ventures
Group Common Stock and the denominator of which is the sum of (a) such number
of outstanding shares, (b) the Number of Shares Issuable with Respect to the
TCI Ventures Group Inter-Group Interest and (c) the number of shares of TCI
Ventures Group Common Stock issuable upon conversion, exercise or exchange of
Pre-Exchange Offer Securities.
"Appraisal Date," with respect to any determination of the Liberty Media
Group Private Market Value or the TCI Ventures Group Private Market Value,
shall mean the last day of the calendar month preceding the month in which the
Selection Date occurs.
"Appraiser" means each of the First Appraiser, the Second Appraiser and the
Mutually Designated Appraiser.
"Committed Acquisition Shares" means (i) the shares of Series A Liberty
Media Group Common Stock that the Company had, prior to the record date for
the Liberty Media Group Distribution on August 10, 1995, agreed to issue, but
as of such record date had not issued, and (ii) the shares of Series A Liberty
Media Group Common Stock that are issuable upon conversion, exercise or
exchange of Convertible Securities that the
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Company had, prior to the record date for the Liberty Media Group
Distribution, agreed to issue, but as of such record date had not issued, in
each case including obligations of the Company to issue shares of the
Company's Class A Common Stock, par value $1.00 per share (which has been
redesignated Series A TCI Group Common Stock), which as a result of the
Liberty Media Group Distribution, constitute obligations to issue, among other
securities, Series A Liberty Media Group Common Stock or Convertible
Securities which are convertible into or exercisable or exchangeable for
Series A Liberty Media Group Common Stock; provided, however, that Committed
Acquisition Shares will not include any shares of Liberty Media Group Common
Stock issuable upon conversion, exercise or exchange of Pre-Distribution
Convertible Securities. The type and amount of Committed Acquisition Shares
issuable will be appropriately adjusted to reflect subdivisions and
combinations of the Series A Liberty Media Group Common Stock and dividends or
distributions of shares of Series A Liberty Media Group Common Stock or Series
B Liberty Media Group Common Stock to holders of Series A Liberty Media Group
Common Stock and other reclassifications of the Series A Liberty Media Group
Common Stock, in each case occurring (or the record date for which occurs)
after the Liberty Media Group Distribution. The shares of Series A Liberty
Media Group Common Stock issuable upon conversion of the Series H Preferred
Stock constitute Committed Acquisition Shares.
"Convertible Securities" means any securities of the Company (other than any
series of Common Stock) or any Subsidiary thereof that are convertible into,
exchangeable for or evidence the right to purchase any shares of any series of
Common Stock, whether upon conversion, exercise, exchange, pursuant to
antidilution provisions of such securities or otherwise.
"Disposition" means the sale, transfer, assignment or other disposition
(whether by merger, consolidation, sale or contribution of assets or stock or
otherwise) of properties or assets.
"DGCL" means the General Corporation Law of the State of Delaware.
"Exchange Offers" means those certain offers made by the Company to exchange
(i) two shares of Series A TCI Ventures Group Common Stock for each share of
Series A TCI Group Common Stock properly tendered and not validly withdrawn,
up to 188,661,300 shares of Series A TCI Group Common Stock (the "Series A
Maximum"), and (ii) two shares of Series B TCI Ventures Group Common Stock for
each share of Series B TCI Group Common Stock properly tendered and not
validly withdrawn, up to 16,266,400 shares of Series B TCI Group Common Stock
(the "Series B Maximum"), upon the terms and subject to the conditions set
forth in the Offering Circular of the Company, dated August 7, 1997, and the
related letters of transmittal.
"First Appraiser" means, with respect to any determination of the Liberty
Media Group Private Market Value or the TCI Ventures Group Private Market
Value, an investment banking firm of recognized national standing selected by
the Company to make such determination.
"Higher Appraised Amount" means, with respect to any determination of the
Liberty Media Group Private Market Value or the TCI Ventures Group Private
Market Value, the higher of the respective final views of the First Appraiser
and the Second Appraiser as to such private market value.
"Initial Ventures Options" means those certain options to purchase shares of
Series A TCI Ventures Group Common Stock that were issued effective upon the
consummation of the Exchange Offers, in connection with the adjustment of the
Adjustable Options. For purposes of this definition, the term "Adjustable
Options" means those options to purchase shares of Series A TCI Group Common
Stock that were outstanding immediately prior to the consummation of the
Exchange Offers under any Existing Stock Plan (as defined below), which
options the Board of Directors and, if applicable, the committee of the Board
of Directors charged with the administration of such Existing Stock Plan,
determined to adjust for the effects of the Exchange Offers by the issuance,
in substitution for and in cancellation of each such Adjustable Option
effective upon the consummation of the Exchange Offers, of an Initial Ventures
Option to purchase a number of shares of Series A TCI Ventures Group Common
Stock initially equal to 30% (rounded up to the next whole number) of the
number of shares of Series A TCI Group Common Stock that would have been
issuable upon exercise of such Adjustable Option
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immediately prior to the consummation of the Exchange Offers, and an option to
purchase a number of shares of Series A TCI Group Common Stock equal to 70%
(rounded down to the next whole number) of the number of shares of Series A
TCI Group Common Stock that would have been issuable upon exercise of such
Adjustable Option immediately prior to the consummation of the Exchange
Offers, together with such other securities as were then issuable upon
exercise of such Adjustable Option (and, in each case, having such other terms
consistent with the terms of the Adjustable Option for which they are
exchanged as the Board of Directors or the committee, as applicable,
determines). The term "Existing Stock Plans" means each of the following: the
Tele-Communications, Inc. 1994 Stock Incentive Plan, the Tele-Communications,
Inc. 1995 Employee Stock Incentive Plan and the Tele-Communications, Inc. 1996
Incentive Plan.
"Inter-Group Interest" of the TCI Group in the Liberty Media Group or the
TCI Ventures Group means any common stockholders' equity value of the Company
attributable to the Liberty Media Group or the TCI Ventures Group, as the case
may be, that is not represented by outstanding shares of Liberty Media Group
Common Stock or TCI Ventures Group Common Stock, as the case may be. The TCI
Group's Inter-Group Interest in the Liberty Media Group is represented by the
Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group
Interest and the TCI Group's Inter-Group Interest in the TCI Ventures Group is
represented by the Number of Shares Issuable with Respect to the TCI Ventures
Group Inter-Group Interest.
"Liberty Media Group" means as of any date of determination thereof:
(i) the interest of the Company or any of its subsidiaries in Liberty
Media Corporation or any of its subsidiaries (including any successor
thereto by merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business Transaction)
and their respective properties and assets,
(ii) all assets and liabilities of the Company or any of its subsidiaries
to the extent attributed to any of the properties or assets referred to in
clause (i) of this sentence, whether or not such assets or liabilities are
assets and liabilities of Liberty Media Corporation or any of its
subsidiaries (or a successor as described in clause (i) of this sentence),
(iii) all assets and properties contributed or otherwise transferred to
the Liberty Media Group from the TCI Group, and
(iv) the interest of the Company or any of its subsidiaries in the
businesses, assets and liabilities acquired by the Company or any of its
subsidiaries for the Liberty Media Group, as determined by the Board of
Directors;
provided that (a) from and after any dividend or other distribution with
respect to any shares of Liberty Media Group Common Stock (other than a
dividend or other distribution payable in shares of Liberty Media Group Common
Stock, with respect to which adjustment will be made as described in clause
(i) of the definition of "Number of Shares Issuable with Respect to the
Liberty Media Group Inter-Group Interest," or in other securities of the
Company attributed to the Liberty Media Group for which provision will be made
as described in the penultimate sentence of this definition), the Liberty
Media Group will no longer include an amount of assets or properties equal to
the aggregate amount of such kind of assets or properties so paid in respect
of shares of Liberty Media Group Common Stock multiplied by a fraction the
numerator of which is equal to the Liberty Media Group Inter-Group Interest
Fraction in effect immediately prior to the record date for such dividend or
other distribution and the denominator of which is equal to the Liberty Media
Group Outstanding Interest Fraction in effect immediately prior to the record
date for such dividend or other distribution and (b) from and after any
transfer of assets or properties from the Liberty Media Group to the TCI
Group, the Liberty Media Group will no longer include the assets or properties
so transferred. If the Company pays a dividend or makes any other distribution
with respect to shares of Liberty Media Group Common Stock payable in
securities of the Company attributed to the Liberty Media Group other than
Liberty Media Group Common Stock, the TCI Group will be deemed to hold an
amount of such other securities equal to the amount so distributed multiplied
by the fraction specified in clause (a) of this definition (determined as of a
time immediately prior to the record date for
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such dividend or other distribution), and to the extent interest or dividends
are paid or other distributions are made on such other securities so
distributed to the holders of Liberty Media Group Common Stock, the Liberty
Media Group will no longer include a corresponding ratable amount of the kind
of assets paid as such interest or dividends or other distributions in respect
of such securities so deemed to be held by the TCI Group. The Company may
also, to the extent any such other securities constitute Convertible
Securities which are at the time convertible, exercisable or exchangeable,
cause such Convertible Securities deemed to be held by the TCI Group to be
deemed to be converted, exercised or exchanged (and to the extent the terms of
such Convertible Securities require payment or delivery of consideration in
order to effect such conversion, exercise or exchange, the Liberty Media Group
will in such case include an amount of the kind of properties or assets
required to be paid or delivered as such consideration for the amount of the
Convertible Securities deemed converted, exercised or exchanged as if such
Convertible Securities were outstanding), in which case such Convertible
Securities will no longer be deemed to be held by the TCI Group or attributed
to the Liberty Media Group.
"Liberty Media Group Distribution" shall mean the share distribution of
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock made to the holders of record of Series A TCI Group Common
Stock and Series B TCI Group Common Stock as of the close of business on
August 4, 1995.
"Liberty Media Group Inter-Group Interest Fraction," as of any date, shall
mean a fraction the numerator of which is the Number of Shares Issuable with
Respect to the Liberty Media Group Inter-Group Interest as of such date and
the denominator of which is the sum of (a) such Number of Shares Issuable with
Respect to the Liberty Media Group Inter-Group Interest as of such date and
(b) the aggregate number of shares of Liberty Media Group Common Stock
outstanding as of such date.
"Liberty Media Group Net Proceeds" shall mean, as of any date, with respect
to any Disposition of any of the properties and assets of the Liberty Media
Group, an amount, if any, equal to the gross proceeds of such Disposition
after any payment of, or reasonable provision for, (a) any taxes payable by
the Company in respect of such Disposition or in respect of any resulting
dividend or redemption pursuant to clause (i) or (ii), respectively, of the
second paragraph under "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock" (or which would
have been payable but for the utilization of tax benefits attributable to the
TCI Group or the TCI Ventures Group), (b) any transaction costs, including,
without limitation, any legal, investment banking and accounting fees and
expenses and (c) any liabilities and other obligations (contingent or
otherwise) of, or attributed to, the Liberty Media Group, including, without
limitation, any indemnity or guarantee obligations incurred in connection with
the Disposition or any liabilities for future purchase price adjustments and
any preferential amounts plus any accumulated and unpaid dividends and other
obligations (without duplication of amounts allocated for the satisfaction of
the Company's obligations with respect to Pre-Distribution Convertible
Securities and Committed Acquisition Shares issuable which are included in the
determination of the Adjusted Liberty Media Group Outstanding Interest
Fraction) in respect of Preferred Stock attributed to the Liberty Media Group.
For purposes of this definition, any properties and assets of the Liberty
Media Group remaining after such Disposition shall constitute "reasonable
provision" for such amount of taxes, costs and liabilities (contingent or
otherwise) as can be supported by such properties and assets. To the extent
the proceeds of any Disposition include any securities or other property other
than cash, the Board of Directors shall determine the value of such securities
or property, including for the purpose of determining the equivalent value
thereof if the Board of Directors determines to pay a dividend or redemption
price in cash or securities or other property as provided in the penultimate
paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock."
"Liberty Media Group Outstanding Interest Fraction," as of any date, shall
mean a fraction the numerator of which is the aggregate number of shares of
Liberty Media Group Common Stock outstanding on such date and the denominator
of which is the sum of (a) such aggregate number of shares of Liberty Media
Group Common Stock outstanding on such date and (b) the Number of Shares
Issuable with Respect to the Liberty Media Group Inter-Group Interest as of
such date.
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"Lower Appraised Amount," with respect to any determination of the Liberty
Media Group Private Market Value or the TCI Ventures Group Private Market
Value, shall mean the lower of the respective final views of the First
Appraiser and the Second Appraiser as to such private market value.
"Market Capitalization" of any class or series of capital stock of the
Company on any Trading Day shall mean the product of (i) the Market Value of
one share of such class or series on such Trading Day and (ii) the number of
shares of such class or series outstanding on such Trading Day.
"Market Value" of any class or series of capital stock of the Company on any
day shall mean the average of the high and low reported sales prices regular
way of a share of such class or series on such day (if such day is a Trading
Day, and if such day is not a Trading Day, on the Trading Day immediately
preceding such day) or in case no such reported sale takes place on such
Trading Day the average of the reported closing bid and asked prices regular
way of a share of such class or series on such Trading Day, in either case on
the Nasdaq National Market, or if the shares of such class or series are not
quoted on the Nasdaq National Market on such Trading Day, the average of the
closing bid and asked prices of a share of such class or series in the over-
the-counter market on such Trading Day as furnished by any New York Stock
Exchange member firm selected from time to time by the Company, or if such
closing bid and asked prices are not made available by any such New York Stock
Exchange member firm on such Trading Day, the market value of a share of such
class or series as determined by the Board of Directors; provided that for
purposes of determining the ratios described under "--Conversion and
Redemption--Conversion of Liberty Media Group Common Stock at the Option of
the Company," "--Conversion and Redemption--Conversion of TCI Ventures Group
Common Stock at the Option of the Company," "--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock," and "--Mandatory Dividend,
Redemption or Conversion of TCI Ventures Group Common Stock" and as described
under "--Liquidation Rights," (a) the "Market Value" of any share of any
series of Common Stock on any day prior to the "ex" date or any similar date
for any dividend or distribution paid or to be paid with respect to such
series of Common Stock shall be reduced by the fair market value of the per
share amount of such dividend or distribution as determined by the Board of
Directors and (b) the "Market Value" of any share of any series of Common
Stock on any day prior to (i) the effective date of any subdivision (by stock
split or otherwise) or combination (by reverse stock split or otherwise) of
outstanding shares of such series of Common Stock or (ii) the "ex" date or any
similar date for any dividend or distribution with respect to any such series
of Common Stock in shares of such series of Common Stock shall be
appropriately adjusted to reflect such subdivision, combination, dividend or
distribution.
"Mutually Appraised Amount," with respect to any determination of the
Liberty Media Group Private Market Value or the TCI Ventures Group Private
Market Value, shall mean the determination by the Mutually Designated
Appraiser of such private market value.
"Mutually Designated Appraiser" shall mean, if required with respect to any
determination of the Liberty Media Group Private Market Value or the TCI
Ventures Group Private Market Value, the investment banking firm of recognized
national standing jointly designated by the First Appraiser and the Second
Appraiser to make such determination.
"Number of Shares Issuable with Respect to the Liberty Media Group Inter-
Group Interest" is currently zero and will from time to time be (i) adjusted
as appropriate to reflect subdivisions (by stock split or otherwise) and
combinations (by reverse stock split or otherwise) of the Series A Liberty
Media Group Common Stock and dividends or distributions of shares of Series A
Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock
to holders of Series A Liberty Media Group Common Stock and other
reclassifications of Series A Liberty Media Group Common Stock, (ii) decreased
(but not to less than zero) by (a) the aggregate number of shares of Series A
Liberty Media Group Common Stock issued or sold by the Company after the
Liberty Media Group Distribution other than Committed Acquisition Shares, the
proceeds of which are attributed to the TCI Group, (b) the aggregate number of
shares of Series A Liberty Media Group Common Stock issued or delivered upon
conversion, exercise or exchange of Convertible Securities (other than Pre-
Distribution Convertible Securities and Convertible Securities which are
convertible into or exercisable or exchangeable for
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Committed Acquisition Shares), the proceeds of which are attributed to the TCI
Group, (c) the aggregate number of shares of Series A Liberty Media Group
Common Stock issued or delivered by the Company as a dividend or distribution
to holders of Series A TCI Group Common Stock and Series B TCI Group Common
Stock, (d) the aggregate number of shares of Series A Liberty Media Group
Common Stock issued or delivered upon the conversion, exercise or exchange of
any Convertible Securities (other than Pre-Distribution Convertible Securities
and Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) issued or delivered by the
Company after the Liberty Media Group Distribution as a dividend or
distribution or by reclassification or exchange to holders of Series A TCI
Group Common Stock and Series B TCI Group Common Stock and (e) the aggregate
number of shares of Series A Liberty Media Group Common Stock (rounded, if
necessary, to the nearest whole number), equal to the aggregate fair value (as
determined by the Board of Directors) of assets or properties attributed to
the Liberty Media Group that are transferred from the Liberty Media Group to
the TCI Group in consideration of a reduction in the Number of Shares Issuable
with Respect to the Liberty Media Group Inter-Group Interest, divided by the
Market Value of one share of Series A Liberty Media Group Common Stock as of
the date of such transfer, and (iii) increased by (a) the aggregate number of
any shares of Series A Liberty Media Group Common Stock and Series B Liberty
Media Group Common Stock which are retired or otherwise cease to be
outstanding following their purchase with funds attributed to the TCI Group,
(b) a number (rounded, if necessary, to the nearest whole number), equal to
the fair value (as determined by the Board of Directors) of assets or
properties theretofore attributed to the TCI Group that are contributed to the
Liberty Media Group in consideration of an increase in the Number of Shares
Issuable with Respect to the Liberty Media Group Inter-Group Interest, divided
by the Market Value of one share of Series A Liberty Media Group Common Stock
as of the date of such contribution and (c) the aggregate number of shares of
Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock into or for which Convertible Securities are deemed to be
converted, exercised or exchanged pursuant to the last sentence of the
definition of "TCI Group." The Company will not issue or sell shares of Series
B Liberty Media Group Common Stock in respect of a reduction in the Number of
Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest.
Whenever a change in the Number of Shares Issuable with Respect to the Liberty
Media Group Inter-Group Interest occurs, the Company will prepare and file a
statement of such change with the Secretary of the Company.
"Number of Shares Issuable with Respect to the TCI Ventures Group Inter-
Group Interest" is currently zero and will from time to time, as applicable,
be (i) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of the
Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group
Common Stock and dividends or distributions of shares of Series A TCI Ventures
Group Common Stock or Series B TCI Ventures Group Common Stock to holders of
Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group
Common Stock and other reclassifications of the Series A TCI Ventures Group
Common Stock and Series B TCI Ventures Group Common Stock, (ii) decreased (but
not to less than zero) by (a) the aggregate number of shares of Series A TCI
Ventures Group Common Stock or Series B TCI Ventures Group Common Stock issued
or sold by the Company after the consummation of the Exchange Offers the
proceeds of which are attributed to the TCI Group, (b) the aggregate number of
shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures
Group Common Stock issued or delivered upon conversion, exercise or exchange
of Convertible Securities (other than Pre-Exchange Offer Securities), the
proceeds of which are attributed to the TCI Group, (c) the aggregate number of
shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures
Group Common Stock issued or delivered by the Company as a dividend or
distribution to holders of Series A TCI Group Common Stock and Series B TCI
Group Common Stock, (d) the aggregate number of shares of Series A TCI
Ventures Group Common Stock or Series B TCI Ventures Group Common Stock issued
or delivered upon the conversion, exercise or exchange of any Convertible
Securities (other than Pre-Exchange Offer Securities) issued or delivered by
the Company after the consummation of the Exchange Offers as a dividend or
distribution or by reclassification or exchange to holders of Series A TCI
Group Common Stock and Series B TCI Group Common Stock and (e) the aggregate
number of shares of Series A TCI Ventures Group Common Stock and Series B TCI
Ventures Group Common Stock (rounded, if necessary, to the nearest whole
number), equal to the aggregate fair value (as determined by the Board of
Directors) of assets or properties attributed to the TCI Ventures Group that
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are transferred from the TCI Ventures Group to the TCI Group in consideration
of a reduction in the Number of Shares Issuable with Respect to the TCI
Ventures Group Inter-Group Interest, divided by the Market Value of one share
of Series A TCI Ventures Group Common Stock as of the date of such transfer,
and (iii) increased by (a) the aggregate number of any shares of Series A TCI
Ventures Group Common Stock and Series B TCI Ventures Group Common Stock which
are retired or otherwise cease to be outstanding following their purchase with
funds attributed to the TCI Group, (b) a number (rounded, if necessary, to the
nearest whole number), equal to the fair value (as determined by the Board of
Directors) of assets or properties theretofore attributed to the TCI Group
that are contributed to the TCI Ventures Group in consideration of an increase
in the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-
Group Interest, divided by the Market Value of one share of Series A TCI
Ventures Group Common Stock as of the date of such contribution and (c) the
aggregate number of shares of Series A TCI Ventures Group Common Stock and
Series B TCI Ventures Group Common Stock into or for which Convertible
Securities are deemed to be converted, exercised or exchanged pursuant to the
last sentence of the definition of "TCI Group." Whenever a change in the
Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group
Interest occurs, the Company shall prepare and file a statement of such change
with the Secretary of the Company.
"Pre-Distribution Convertible Securities" means Convertible Securities that
were outstanding on the record date for the Liberty Media Group Distribution
and were, prior to such date, convertible into or exercisable or exchangeable
for shares of the Company's Class A Common Stock, par value $1.00 per share
(which has been redesignated Series A TCI Group Common Stock).
"Pre-Exchange Offer Securities" means the TCI-UA Notes and the Initial
Ventures Options.
"Qualifying Subsidiary" shall mean a Subsidiary of the Company in which (i)
the Company's ownership and voting interest is sufficient to satisfy the
requirements of the Internal Revenue Service for (x), in the case of a
Subsidiary that holds assets attributed to the Liberty Media Group, a
distribution of the Company's interest in such Subsidiary to the holders of
Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock that is tax free to such holders or (y), in the case of a
Subsidiary that holds assets attributed to the TCI Ventures Group, a
distribution of the Company's interest in such Subsidiary to the holders of
Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group
Common Stock that is tax free to such holders or (ii) the Company owns,
directly or indirectly, all of the issued and outstanding capital stock.
"Related Business Transaction" shall mean any Disposition of all or
substantially all of the properties and assets of the Liberty Media Group or
the TCI Ventures Group, as the case may be, in which the Company receives as
proceeds of such Disposition primarily equity securities (including, without
limitation, capital stock, convertible securities, partnership or limited
partnership interests and other types of equity securities, without regard to
the voting power or contractual or other management or governance rights
related to such equity securities) of the purchaser or acquiror of such assets
and properties of the Liberty Media Group or the TCI Ventures Group, as the
case may be, any entity which succeeds (by merger, formation of a joint
venture enterprise or otherwise) to such assets and properties of the Liberty
Media Group or the TCI Ventures Group, as the case may be, or a third party
issuer, which purchaser, acquiror or other issuer is engaged or proposes to
engage primarily in one or more businesses similar or complementary to the
businesses conducted by the Liberty Media Group or the TCI Ventures Group, as
the case may be, prior to such Disposition, as determined in good faith by the
Board of Directors.
"Second Appraiser" means, with respect to any determination of the Liberty
Media Group Private Market Value or the TCI Ventures Group Private Market
Value, an investment banking firm of recognized national standing selected by
the Independent Committee to make such determination.
"Selection Date," with respect to any determination of the Liberty Media
Group Private Market Value or the TCI Ventures Group Private Market Value,
shall mean the date upon which the Second Appraiser for such determination is
selected by the Independent Committee.
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"Subsidiary" shall mean, with respect to any person or entity, any
corporation or partnership 50% or more of whose outstanding voting securities
or partnership interests, as the case may be, are directly or indirectly owned
by such person or entity.
"TCI Group" means as of any date of determination thereof:
(i) the interest of the Company or any of its subsidiaries in all of the
businesses in which the Company or any of its subsidiaries (or any of their
predecessors or successors) is or has been engaged, directly or indirectly,
and the respective assets and liabilities of the Company or any of its
subsidiaries, other than any businesses, assets or liabilities of the
Liberty Media Group or the TCI Ventures Group;
(ii) a proportionate interest in the businesses, assets and liabilities
of the Liberty Media Group equal to the Liberty Media Group Inter-Group
Interest Fraction as of such date and a proportionate interest in the
businesses, assets and liabilities of the TCI Ventures Group equal to the
TCI Ventures Group Inter-Group Interest Fraction as of such date;
(iii) from and after any dividend or other distribution with respect to
shares of Liberty Media Group Common Stock (other than a dividend or other
distribution payable in shares of Liberty Media Group Common Stock, with
respect to which adjustment will be made as described in clause (i) of the
definition of "Number of Shares Issuable with Respect to the Liberty Media
Group Inter-Group Interest," or in other securities of the Company
attributed to the Liberty Media Group, for which provision will be made as
described in the second sentence of this definition), an amount of assets
or properties theretofore included in the Liberty Media Group equal to the
aggregate amount of such kind of assets or properties so paid in respect of
such dividend or other distribution with respect to shares of Liberty Media
Group Common Stock multiplied by a fraction the numerator of which is equal
to the Liberty Media Group Inter-Group Interest Fraction in effect
immediately prior to the record date for such dividend or other
distribution and the denominator of which is equal to the Liberty Media
Group Outstanding Interest Fraction in effect immediately prior to the
record date for such dividend or other distribution;
(iv) from and after any dividend or other distribution with respect to
shares of TCI Ventures Group Common Stock (other than a dividend or other
distribution payable in shares of TCI Ventures Group Common Stock, with
respect to which adjustment will be made as described in clause (i) of the
definition of "Number of Shares Issuable with Respect to the TCI Ventures
Group Inter-Group Interest," or in other securities of the Company
attributed to the TCI Ventures Group, for which provision will be made as
described in the penultimate sentence of this definition), an amount of
assets or properties theretofore included in the TCI Ventures Group equal
to the aggregate amount of such kind of assets or properties so paid in
respect of such dividend or other distribution with respect to shares of
TCI Ventures Group Common Stock multiplied by a fraction the numerator of
which is equal to the TCI Ventures Group Inter-Group Interest Fraction in
effect immediately prior to the record date for such dividend or other
distribution and the denominator of which is equal to the TCI Ventures
Group Outstanding Interest Fraction in effect immediately prior to the
record date for such dividend or other distribution; and
(v) any assets or properties transferred from the Liberty Media Group or
the TCI Ventures Group to the TCI Group;
provided that, from and after any contribution or transfer of any assets or
properties from the TCI Group to the Liberty Media Group or the TCI Ventures
Group, the TCI Group will no longer include such assets or properties so
contributed or transferred (other than pursuant to its interest in the
businesses, assets and liabilities of the Liberty Media Group or the TCI
Ventures Group, as applicable, described in clause (ii) above). If the Company
pays a dividend or makes any other distribution with respect to shares of
Liberty Media Group Common Stock payable in other securities of the Company
attributed to the Liberty Media Group, the TCI Group will be deemed to hold an
amount of such other securities equal to the amount so distributed multiplied
by the fraction specified in clause (iii) of this definition (determined as of
a time immediately prior to the record date for such dividend or other
distribution), and to the extent interest or dividends are paid or other
distributions are made on such other securities so distributed to holders of
Liberty Media Group Common Stock, the TCI Group will include a
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corresponding ratable amount of the kind of assets paid as such interest or
dividends or other distributions in respect of such securities so deemed to be
held by the TCI Group. If the Company pays a dividend or makes any other
distribution with respect to shares of TCI Ventures Group Common Stock payable
in other securities of the Company attributed to the TCI Ventures Group, the
TCI Group will be deemed to hold an amount of such other securities equal to
the amount so distributed multiplied by the fraction specified in clause (iv)
of this definition (determined as of a time immediately prior to the record
date for such dividend or other distribution), and to the extent interest or
dividends are paid or other distributions are made on such other securities so
distributed to holders of TCI Ventures Group Common Stock, the TCI Group will
include a corresponding ratable amount of the kind of assets paid as such
interest or dividends or other distribution in respect of such securities so
deemed to be held by the TCI Group. The Company may also, to the extent any
such other securities constitute Convertible Securities which are at the time
convertible, exercisable or exchangeable, cause such Convertible Securities
deemed to be held by the TCI Group to be deemed to be converted, exercised or
exchanged (and to the extent the terms of such Convertible Securities require
payment or delivery of consideration in order to effect such conversion,
exercise or exchange, the TCI Group will in such case no longer include an
amount of the kind of properties or assets required to be paid or delivered as
such consideration for the amount of the Convertible Securities deemed
converted, exercised or exchanged as if such Convertible Securities were
outstanding), in which case such Convertible Securities will no longer be
deemed to be held by the TCI Group or attributed to the Liberty Media Group or
the TCI Ventures Group, as applicable.
"TCI-UA Notes" shall mean those certain convertible notes due December 12,
2021 issued by TCI UA, Inc., a Subsidiary of the Company, which notes were,
prior to the consummation of the Exchange Offers, exchangeable for shares of
Series A TCI Group Common Stock and Series A Liberty Media Group Common Stock.
"TCI Ventures Group" shall mean, as of any date that any shares of Series A
TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock
have been issued and continue to be outstanding:
(i) the interest of the Company or of any of its subsidiaries in any of
the following persons or any of their respective subsidiaries (including
any successor thereto by merger, consolidation or sale of all or
substantially all of its assets, whether or not in connection with a
Related Business Transaction) and their respective properties and assets:
TCI Ventures Group, LLC, Tele-Communications International, Inc., TCI
Telephony Holdings, Inc., New Jersey Fiber Technologies, L.P., Louisville
Lightwave, Western Tele-Communications, Inc., TCI GCI, Inc., TCI UVSG,
Inc., Acclaim Entertainment, Inc., TCI TSX, Inc., Intessera, Inc., TCI-
TVGOS, Inc., TCI MCNS Holdings, Inc., TCI ETC Holdings, Inc., TCI Internet
Holdings, Inc., TCI Online Sports Holdings, Inc., TCI Online Village
Holdings, Inc., TCI INZ Sports Holdings, Inc., TCI Netscape Holdings, Inc.,
TCI Java, Inc., National Digital Television Center, Inc., TCI SUMMITrak of
Texas, Inc., TCI SUMMITrak, LLC, DigiVentures, LLC, Kitty Hawk Capital
Limited Partners, II, New Enterprise Associates, IV, Limited Partnership,
Venture First II, L.P., TVSM, Inc.,
(ii) all assets and liabilities of the Company or any of its subsidiaries
to the extent attributed to any of the properties or assets referred to in
clause (i) of this sentence, whether or not such assets or liabilities are
assets and liabilities of any of the Persons named in clause (i) or any of
their respective subsidiaries (or any successor as described in clause (i)
of this sentence),
(iii) the proceeds of exercise of the Initial Ventures Options and the
expense of exercise of any related stock appreciation rights,
(iv) all assets and properties contributed or otherwise transferred to
the TCI Ventures Group from the TCI Group, and
(v) the interest of the Company or any of its subsidiaries in the
businesses, assets and liabilities acquired by the Company or any of its
subsidiaries for the TCI Ventures Group, as determined by the Board of
Directors;
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provided that, (a) from and after any dividend or other distribution with
respect to any shares of TCI Ventures Group Common Stock (other than a
dividend or other distribution payable in shares of TCI Ventures Group Common
Stock, with respect to which adjustment shall be made as provided in clause
(i) of the definition of "Number of Shares Issuable with Respect to the TCI
Ventures Group Inter-Group Interest," or in other securities of the Company
attributed to the TCI Ventures Group for which provision shall be made as set
forth in the penultimate sentence of this definition), the TCI Ventures Group
will no longer include an amount of assets or properties equal to the
aggregate amount of such kind of assets or properties so paid in respect of
shares of TCI Ventures Group Common Stock multiplied by a fraction the
numerator of which is equal to the TCI Ventures Group Inter-Group Interest
Fraction in effect immediately prior to the record date for such dividend or
other distribution and the denominator of which is equal to the TCI Ventures
Group Outstanding Interest Fraction in effect immediately prior to the record
date for such dividend or other distribution and (b) from and after any
transfer of assets or properties from the TCI Ventures Group to the TCI Group,
the TCI Ventures Group shall no longer include the assets or properties so
transferred. If the Company pays a dividend or makes any other distribution
with respect to shares of TCI Ventures Group Common Stock payable in
securities of the Company attributed to the TCI Ventures Group other than TCI
Ventures Group Common Stock, the TCI Group shall be deemed to hold an amount
of such other securities equal to the amount so distributed multiplied by the
fraction specified in clause (a) of this definition (determined as of a time
immediately prior to the record date for such dividend or other distribution),
and to the extent interest or dividends are paid or other distributions are
made on such other securities so distributed to the holders of TCI Ventures
Group Common Stock, the TCI Ventures Group will no longer include a
corresponding ratable amount of the kind of assets paid as such interest or
dividends or other distributions in respect of such securities so deemed to be
held by the TCI Group. The Company may also, to the extent any such other
securities constitute Convertible Securities which are at the time
convertible, exercisable or exchangeable, cause such Convertible Securities
deemed to be held by the TCI Group to be deemed to be converted, exercised or
exchanged (and to the extent the terms of such Convertible Securities require
payment or delivery of consideration in order to effect such conversion,
exercise or exchange, the TCI Ventures Group shall in such case include an
amount of the kind of properties or assets required to be paid or delivered as
such consideration for the amount of the Convertible Securities deemed
converted, exercised or exchanged as if such Convertible Securities were
outstanding), in which case such Convertible Securities shall no longer be
deemed to be held by the TCI Group or attributed to the TCI Ventures Group.
"TCI Ventures Group Inter-Group Interest Fraction," as of any date, shall
mean a fraction the numerator of which is the Number of Shares Issuable with
Respect to the TCI Ventures Group Inter-Group Interest as of such date and the
denominator of which is the sum of (a) such Number of Shares Issuable with
Respect to the TCI Ventures Group Inter-Group Interest as of such date and (b)
the aggregate number of shares of TCI Ventures Group Common Stock outstanding
as of such date.
"TCI Ventures Group Net Proceeds" shall mean, as of any date, with respect
to any Disposition of any of the properties and assets of the TCI Ventures
Group, an amount, if any, equal to the gross proceeds of such Disposition
after any payment of, or reasonable provision for, (a) any taxes payable by
the Company in respect of such Disposition or in respect of any resulting
dividend or redemption pursuant to clause (i) or (ii), respectively, of the
second paragraph under "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of TCI Ventures Group Common Stock" (or which would
have been payable but for the utilization of tax benefits attributable to the
TCI Group or the Liberty Media Group), (b) any transaction costs, including,
without limitation, any legal, investment banking and accounting fees and
expenses and (c) any liabilities and other obligations (contingent or
otherwise) of, or attributed to, the TCI Ventures Group, including, without
limitation, any indemnity or guarantee obligations incurred in connection with
the Disposition or any liabilities for future purchase price adjustments and
any preferential amounts plus any accumulated and unpaid dividends and other
obligations (without duplication of amounts allocated for the satisfaction of
the Company's obligations with respect to Pre-Exchange Offer Securities which
are included in the determination of the Adjusted TCI Ventures Group
Outstanding Interest Fraction) in respect of Preferred Stock attributed to the
TCI Ventures Group. For purposes of this definition, any properties and assets
of the TCI Ventures Group remaining after such Disposition shall constitute
"reasonable provision" for such amount of taxes, costs and liabilities
(contingent or
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otherwise) as can be supported by such properties and assets. To the extent
the proceeds of any Disposition include any securities or other property other
than cash, the Board of Directors shall determine the value of such securities
or property, including for the purpose of determining the equivalent value
thereof if the Board of Directors determines to pay a dividend or redemption
price in cash or securities or other property as provided in the third
paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption
or Conversion of TCI Ventures Group Common Stock."
"TCI Ventures Group Outstanding Interest Fraction," as of any date, shall
mean a fraction the numerator of which is the aggregate number of shares of
TCI Ventures Group Common Stock outstanding on such date and the denominator
of which is the sum of (a) such aggregate number of shares of TCI Ventures
Group Common Stock outstanding on such date and (b) the Number of Shares
Issuable with Respect to the TCI Ventures Group Inter-Group Interest as of
such date.
"Trading Day" shall mean each weekday other than any day on which any
relevant class or series of capital stock of the Corporation is not traded on
the Nasdaq National Market System or in the over-the-counter market.
Voting Rights
Holders of Series A TCI Group Common Stock, Series A Liberty Media Group
Common Stock and Series A TCI Ventures Group Common Stock, in each case, are
entitled to one vote for each share of such stock held, and holders of Series
B TCI Group Common Stock, Series B Liberty Media Group Common Stock and Series
B TCI Ventures Group Common Stock, in each case, are entitled to ten votes for
each share of such stock held, on all matters presented to such stockholders.
Except as may otherwise be required by the laws of the State of Delaware or,
with respect to any class of Preferred Stock or any series of such a class, in
the Charter (including any resolution or resolutions providing for the
establishment of such class or series pursuant to authority vested in the
Board of Directors by the Charter), the holders of TCI Group Common Stock, the
holders of Liberty Media Group Common Stock, the holders of TCI Ventures Group
Common Stock and the holders of each class or series of Preferred Stock, if
any, entitled to vote thereon will vote as one class with respect to all
matters to be voted on by stockholders of the Company.
None of the holders of Series A TCI Group Common Stock, Series B TCI Group
Common Stock, Series A Liberty Media Group Common Stock, Series B Liberty
Media Group Common Stock, Series A TCI Ventures Group Common Stock or Series B
TCI Ventures Group Common Stock have any rights to vote as a separate class or
series on any matter coming before the stockholders of the Company, except
with respect to certain limited class and series voting rights provided under
the Delaware General Corporation Law ("DGCL"). Under the DGCL, the approval of
the holders of a majority of the outstanding shares of any class of capital
stock of a corporation, voting separately as a class, is required to approve
any amendment to the charter of such corporation that would alter or change
the powers, preferences or special rights of the shares of such class so as to
affect them adversely, provided that, if any amendment would alter or change
the powers, preferences or special rights of one or more series of the class
so as to affect them adversely, but would not so affect the entire class, then
only the shares of the series so affected by the amendment would be entitled
to vote thereon separately as a class. Because the Series A TCI Group Common
Stock, the Series B TCI Group Common Stock, the Series A Liberty Media Group
Common Stock, the Series B Liberty Media Group Common Stock, the Series A TCI
Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock
are each a separate series of a single class of stock, each series will be
entitled to vote separately as a class upon an amendment to the Charter that
would alter or change the powers, preferences or special rights of such series
so as to affect them adversely only if the other series were not so affected.
The DGCL does not provide for any other separate voting rights of a class or
series of capital stock (other than with respect to a change in par value or,
in certain circumstances not applicable in the case of the Company's
outstanding stock, an increase or decrease in the authorized shares of such
class or series). Consequently, because most matters brought to a stockholder
vote will require the approval of only a specified percentage of all of the
Company's outstanding capital stock entitled to vote on such matters
(including the TCI Group Common Stock, the Liberty Media Group Common Stock
and
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the TCI Ventures Group Common Stock) voting together as a single class, if the
holders of one or more series of Common Stock have more than the number of
votes required to approve any such matter, such holders would be in a position
to control the outcome of the vote on such matter.
Dividends
Subject to the prior payment of dividends on, and other rights of, any of
the outstanding shares of Preferred Stock, dividends may be paid as determined
by the Board of Directors (i) on the TCI Group Common Stock out of the lesser
of (x) the TCI Group Available Dividend Amount and (y) funds of the Company
legally available therefor under the DGCL, (ii) on the Liberty Media Group
Common Stock out of the lesser of (x) the Liberty Media Group Available
Dividend Amount and (y) funds of the Company legally available therefor under
the DGCL, and (iii) on the TCI Ventures Group Common Stock out of the lesser
of (x) the TCI Ventures Group Available Dividend Amount and (y) funds of the
Company legally available therefor under the DGCL. Under the DGCL, the amount
of the funds of the Company legally available for the payment of dividends on
any series of Common Stock is determined on the basis of the entire
corporation and not just the TCI Group, the Liberty Media Group or the TCI
Ventures Group. Consequently, the amount of legally available funds will be
reduced by the amount of any net losses of the TCI Group, the Liberty Media
Group or the TCI Ventures Group and any dividends or distributions on, or
repurchases of, the TCI Group Common Stock, the Liberty Media Group Common
Stock or the TCI Ventures Group Common Stock, if any, and dividends on, or
certain repurchases of, Preferred Stock. Certain loan agreements to which
certain subsidiaries of the Company are parties or are subject contain
restricted payment provisions that limit the amount of dividends, other than
stock dividends, that those companies may pay. Future loan agreements may also
contain similar restrictions and limits.
The "TCI Group Available Dividend Amount," as of any date, means either (i)
the excess of (a) an amount equal to the total assets of the TCI Group less
the total liabilities (not including preferred stock) of the TCI Group as of
such date over (b) the aggregate par value of, or any greater amount
determined to be capital in respect of, all outstanding shares of TCI Group
Common Stock and each class or series of Preferred Stock attributed to the TCI
Group or (ii) in case there is no such excess, an amount equal to the
Corporation Earnings (Loss) Attributable to the TCI Group (if positive) for
the fiscal year in which such date occurs and/or the preceding fiscal year.
The "Corporation Earnings (Loss) Attributable to the TCI Group," for any
period, means the net earnings or loss of the TCI Group for such period,
determined on a basis consistent with the determination of the net earnings or
loss of the TCI Group for such period as presented in the combined financial
statements of the TCI Group, including income and expenses of TCI attributed
to the operations of the TCI Group on a substantially consistent basis,
including, without limitation, corporate administrative costs, net interest
and income taxes. The TCI Group Available Dividend Amount is intended to be
similar to the amount that would be legally available for the payment of
dividends on the TCI Group Common Stock under the DGCL if the TCI Group were a
separate Delaware corporation. There can be no assurance that there will be a
TCI Group Available Dividend Amount.
The "Liberty Media Group Available Dividend Amount," as of any date, means
the product of the Liberty Media Group Outstanding Interest Fraction and
either (i) the excess of (a) an amount equal to the total assets of the
Liberty Media Group less the total liabilities (not including preferred stock)
of the Liberty Media Group as of such date over (b) the aggregate par value
of, or any greater amount determined to be capital in respect of, all
outstanding shares of Liberty Media Group Common Stock and each class or
series of Preferred Stock attributed to the Liberty Media Group or (ii) in
case there is no such excess, an amount equal to the Corporation Earnings
(Loss) Attributable to the Liberty Media Group (if positive) for the fiscal
year in which such date occurs and/or the preceding fiscal year. The
"Corporation Earnings (Loss) Attributable to the Liberty Media Group," for any
period, means the net earnings or loss of the Liberty Media Group for such
period determined on a basis consistent with the determination of the net
earnings or loss of the Liberty Media Group for such period as presented in
the combined financial statements of the Liberty Media Group, including income
and expenses of the Company attributed to the operations of the Liberty Media
Group on a substantially consistent basis, including, without limitation,
corporate administrative costs, net interest and income taxes. The Liberty
Media
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Group Available Dividend Amount is intended to be similar to the amount that
would be legally available for the payment of dividends on the Liberty Media
Group Common Stock under the DGCL if the Liberty Media Group were a separate
Delaware corporation. There can be no assurance that there will be a Liberty
Media Group Available Dividend Amount.
The "TCI Ventures Group Available Dividend Amount," as of any date, means
the product of the TCI Ventures Group Outstanding Interest Fraction and either
(i) the excess of (a) an amount equal to the total assets of the TCI Ventures
Group less the total liabilities (not including preferred stock) of the TCI
Ventures Group as of such date over (b) the aggregate par value of, or any
greater amount determined to be capital in respect of, all outstanding shares
of TCI Ventures Group Common Stock and each class or series of Preferred Stock
attributed to the TCI Ventures Group or (ii) in case there is no such excess,
an amount equal to the Corporation Earnings (Loss) Attributable to the TCI
Ventures Group (if positive) for the fiscal year in which such date occurs
and/or the preceding fiscal year. The "Corporation Earnings (Loss)
Attributable to the TCI Ventures Group," for any period, means the net
earnings or loss of the TCI Ventures Group for such period determined on a
basis consistent with the determination of the net earnings or loss of the TCI
Ventures Group for such period as presented in the combined financial
statements of the TCI Ventures Group, including income and expenses of the
Company attributed to the operations of the TCI Ventures Group on a
substantially consistent basis, including, without limitation, corporate
administrative costs, net interest and income taxes. The TCI Ventures Group
Available Dividend Amount is intended to be similar to the amount that would
be legally available for the payment of dividends on the TCI Ventures Group
Common Stock under the DGCL if the TCI Ventures Group were a separate Delaware
corporation. There can be no assurance that there will be a TCI Ventures Group
Available Dividend Amount.
Except for dividends declared or paid as described below under "--Share
Distributions," "--Conversion and Redemption--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock," and "--Conversion and
Redemption--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group
Common Stock," any dividends paid on the Series A TCI Group Common Stock or
the Series B TCI Group Common Stock will be paid only on both series, in equal
amounts per share; any dividends paid on the Series A Liberty Media Group
Common Stock or the Series B Liberty Media Group Common Stock will be paid
only on both series, in equal amounts per share; and any dividends paid on the
Series A TCI Ventures Group Common Stock or the Series B TCI Ventures Group
Common Stock will be paid only on both series, in equal amounts per share.
The Board of Directors, subject to the provisions described above and under
"--Share Distributions" below, has the authority and discretion to declare and
pay dividends on the TCI Group Common Stock, the Liberty Media Group Common
Stock or the TCI Ventures Group Common Stock in equal or unequal amounts,
notwithstanding the relationship among the TCI Group Available Dividend
Amount, the Liberty Media Group Available Dividend Amount and the TCI Ventures
Group Available Dividend Amount, the respective amounts of prior dividends
declared on, or liquidation rights of, the TCI Group Common Stock, the Liberty
Media Group Common Stock or the TCI Ventures Group Common Stock or any other
factor.
At the time of any dividend or other distribution on the outstanding shares
of Liberty Media Group Common Stock (including any dividend of Liberty Media
Group Net Proceeds from the Disposition of all or substantially all of the
properties and assets of the Liberty Media Group as described below under
"--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock"), the TCI Group will (if at such time there
is an Inter-Group Interest in the Liberty Media Group) be credited, and the
Liberty Media Group will be charged (in addition to the charge for the
dividend or other distribution paid or distributed in respect of outstanding
shares of Liberty Media Group Common Stock), with an amount equal to the
product of (i) the aggregate amount of such dividend or distribution paid or
distributed in respect of outstanding shares of Liberty Media Group Common
Stock times (ii) a fraction the numerator of which is the Liberty Media Group
Inter-Group Interest Fraction and the denominator of which is the Liberty
Media Group Outstanding Interest Fraction.
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At the time of any dividend or other distribution on the outstanding shares
of TCI Ventures Group Common Stock (including any dividend of TCI Ventures
Group Net Proceeds from the Disposition of all or substantially all of the
properties and assets of the TCI Ventures Group as described under "--
Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of TCI
Ventures Group Common Stock"), the TCI Group will (if at such time there is an
Inter-Group Interest in the TCI Ventures Group) be credited, and the TCI
Ventures Group will be charged (in addition to the charge for the dividend or
other distribution paid or distributed in respect of outstanding shares of TCI
Ventures Group Common Stock), with an amount equal to the product of (i) the
aggregate amount of such dividend or distribution paid or distributed in
respect of outstanding shares of TCI Ventures Group Common Stock times (ii) a
fraction the numerator of which is the TCI Ventures Group Inter-Group Interest
Fraction and the denominator of which is the TCI Ventures Group Outstanding
Interest Fraction.
Share Distributions
Distributions on TCI Group Common Stock. If at any time after the initial
issuance of shares of TCI Ventures Group Common Stock, a distribution paid in
TCI Group Common Stock, TCI Ventures Group Common Stock, Liberty Media Group
Common Stock, or any other securities of the Company or any other person (a
"share distribution"), is made with respect to the TCI Group Common Stock,
such share distribution will be declared and paid only as follows:
(i) a share distribution consisting of shares of Series A TCI Group
Common Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series A TCI Group Common Stock) to holders of
Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an
equal per share basis; or consisting of shares of Series B TCI Group Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series B TCI Group Common Stock) to holders of
Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an
equal per share basis; or consisting of shares of Series A TCI Group Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series A TCI Group Common Stock) to holders of
Series A TCI Group Common Stock and, on an equal per share basis, shares of
Series B TCI Group Common Stock (or like Convertible Securities convertible
into or exercisable or exchangeable for shares of Series B TCI Group Common
Stock) to holders of Series B TCI Group Common Stock;
(ii) a share distribution consisting of shares of Series A Liberty Media
Group Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of Series A Liberty Media Group
Common Stock) to holders of Series A TCI Group Common Stock and Series B
TCI Group Common Stock, on an equal per share basis; provided that the sum
of (A) the aggregate number of shares of Series A Liberty Media Group
Common Stock to be so issued (or the number of such shares which would be
issuable upon conversion, exercise or exchange of any Convertible
Securities to be so issued) and (B) the number of shares of such series
that are subject to issuance upon conversion, exercise or exchange of any
Convertible Securities then outstanding that are attributed to the TCI
Group (other than Pre-Distribution Convertible Securities and other than
Convertible Securities convertible into or exercisable or exchangeable for
Committed Acquisition Shares) is less than or equal to the Number of Shares
Issuable with Respect to the Liberty Media Group Inter-Group Interest;
(iii) a share distribution consisting of shares of Series A TCI Ventures
Group Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of Series A TCI Ventures Group
Common Stock) to holders of Series A TCI Group Common Stock and Series B
TCI Group Common Stock, on an equal per share basis; or consisting of
shares of Series B TCI Ventures Group Common Stock (or Convertible
Securities convertible into or exercisable or exchangeable for shares of
Series B TCI Ventures Group Common Stock) to holders of Series A TCI Group
Common Stock and Series B TCI Group Common Stock, on an equal per share
basis; or consisting of shares of Series A TCI Ventures Group Common Stock
(or Convertible Securities convertible into or exercisable or exchangeable
for shares of Series A TCI Ventures Group Common Stock) to holders of
Series A TCI Group Common Stock and, on
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an equal per share basis, shares of Series B TCI Ventures Group Common
Stock (or like Convertible Securities convertible into or exercisable or
exchangeable for shares of Series B TCI Ventures Group Common Stock) to
holders of Series B TCI Group Common Stock; provided that the sum of (A)
the aggregate number of shares of Series A TCI Ventures Group Common Stock
and Series B TCI Ventures Group Common Stock to be so distributed (or the
number of such shares which would be issuable upon conversion, exercise or
exchange of any Convertible Securities to be so distributed) and (B) the
number of shares of Series A TCI Ventures Group Common Stock and Series B
TCI Ventures Group Common Stock that are subject to issuance upon
conversion, exercise or exchange of any Convertible Securities then
outstanding that are attributed to the TCI Group (other than Pre-Exchange
Offer Securities) is less than or equal to the Number of Shares Issuable
with Respect to the TCI Ventures Group Inter-Group Interest; and
(iv) a share distribution consisting of any class or series of securities
of the Company or any other person other than TCI Group Common Stock,
Liberty Media Group Common Stock or TCI Ventures Group Common Stock (or
Convertible Securities convertible into or exercisable or exchangeable for
shares of TCI Group Common Stock, Liberty Media Group Common Stock or TCI
Ventures Group Common Stock), either on the basis of a distribution of
identical securities, on an equal per share basis, to holders of Series A
TCI Group Common Stock and Series B TCI Group Common Stock or on the basis
of a distribution of one class or series of securities to holders of Series
A TCI Group Common Stock and another class or series of securities to
holders of Series B TCI Group Common Stock, provided that the securities so
distributed (and, if the distribution consists of Convertible Securities,
the securities into which such Convertible Securities are convertible or
for which they are exercisable or exchangeable) do not differ in any
respect other than their relative voting rights and related differences in
designation, conversion, redemption and share distribution provisions, with
holders of shares of Series B TCI Group Common Stock receiving the class or
series having the higher relative voting rights (without regard to whether
such rights differ to a greater or lesser extent than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the Series A TCI Group Common Stock and the
Series B TCI Group Common Stock), provided that if the securities so
distributed constitute capital stock of a Subsidiary of the Company, such
rights will not differ to a greater extent than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the Series A TCI Group Common Stock and the
Series B TCI Group Common Stock, and provided in each case that such
distribution is otherwise made on an equal per share basis.
The Company will not reclassify, subdivide or combine the Series A TCI Group
Common Stock without reclassifying, subdividing or combining the Series B TCI
Group Common Stock, on an equal per share basis, and the Company will not
reclassify, subdivide or combine the Series B TCI Group Common Stock without
reclassifying, subdividing or combining the Series A TCI Group Common Stock,
on an equal per share basis.
Distributions on Liberty Media Group Common Stock. If at any time a share
distribution is to be made with respect to the Liberty Media Group Common
Stock, such share distribution will be declared and paid only as follows (or
as described under "--Conversion and Redemption" with respect to the
redemptions and other distributions referred to therein):
(i) a share distribution consisting of shares of Series A Liberty Media
Group Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of Series A Liberty Media Group
Common Stock) to holders of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock, on an equal per share basis; or
consisting of shares of Series B Liberty Media Group Common Stock (or
Convertible Securities convertible into or exercisable or exchangeable for
shares of Series B Liberty Media Group Common Stock) to holders of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common
Stock, on an equal per share basis; or consisting of shares of Series A
Liberty Media Group Common Stock (or Convertible Securities convertible
into or exercisable or exchangeable for shares of Series A Liberty Media
Group Common Stock) to holders of Series A Liberty Media Group Common Stock
and, on an equal per share basis, shares of Series B Liberty Media Group
Common Stock (or like Convertible Securities convertible into or
exercisable or exchangeable
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<PAGE>
for shares of Series B Liberty Media Group Common Stock) to holders of
Series B Liberty Media Group Common Stock; and
(ii) a share distribution consisting of any class or series of securities
of the Company or any other person other than as described in the
immediately preceding clause (i) and other than TCI Group Common Stock or
TCI Ventures Group Common Stock (or Convertible Securities convertible into
or exercisable or exchangeable for shares of TCI Group Common Stock or TCI
Ventures Group Common Stock), either on the basis of a distribution of
identical securities, on an equal per share basis, to holders of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common
Stock or on the basis of a distribution of one class or series of
securities to holders of Series A Liberty Media Group Common Stock and
another class or series of securities to holders of Series B Liberty Media
Group Common Stock, provided that the securities so distributed (and, if
the distribution consists of Convertible Securities, the securities into
which such Convertible Securities are convertible or for which they are
exercisable or exchangeable) do not differ in any respect other than their
relative voting rights and related differences in designation, conversion,
redemption and share distribution provisions, with holders of shares of
Series B Liberty Media Group Common Stock receiving the class or series
having the higher relative voting rights (without regard to whether such
rights differ to a greater or lesser extent than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the Series A Liberty Media Group Common
Stock and the Series B Liberty Media Group Common Stock), provided that if
the securities so distributed constitute capital stock of a Subsidiary of
the Company, such rights will not differ to a greater extent than the
corresponding differences in voting rights, designation, conversion,
redemption and share distribution provisions between the Series A Liberty
Media Group Common Stock and the Series B Liberty Media Group Common Stock,
and provided in each case that such distribution is otherwise made on an
equal per share basis.
Because under the Charter the Liberty Media Group is not permitted to have
an Inter-Group Interest in either the TCI Group or the TCI Ventures Group, no
distributions on the Liberty Media Group Common Stock of shares of TCI Group
Common Stock (or related Convertible Securities) or TCI Ventures Group Common
Stock (or related Convertible Securities) are permitted.
The Company will not reclassify, subdivide or combine the Series A Liberty
Media Group Common Stock without reclassifying, subdividing or combining the
Series B Liberty Media Group Common Stock, on an equal per share basis, and
the Company will not reclassify, subdivide or combine the Series B Liberty
Media Group Common Stock without reclassifying, subdividing or combining the
Series A Liberty Media Group Common Stock, on an equal per share basis.
Distributions on TCI Ventures Group Common Stock. If at any time a share
distribution is to be made with respect to the TCI Ventures Group Common
Stock, such share distribution will be declared and paid only as follows (or
as described under "--Conversion and Redemption" with respect to the
redemptions and other distributions referred to therein):
(i) a share distribution consisting of shares of Series A TCI Ventures
Group Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of Series A TCI Ventures Group
Common Stock) to holders of Series A TCI Ventures Group Common Stock and
Series B TCI Ventures Group Common Stock, on an equal per share basis; or
consisting of shares of Series B TCI Ventures Group Common Stock (or
Convertible Securities convertible into or exercisable or exchangeable for
shares of Series B TCI Ventures Group Common Stock) to holders of Series A
TCI Ventures Group Common Stock and Series B TCI Ventures Group Common
Stock, on an equal per share basis; or consisting of shares of Series A TCI
Ventures Group Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of Series A TCI Ventures Group
Common Stock) to holders of Series A TCI Ventures Group Common Stock and,
on an equal per share basis, shares of Series B TCI Ventures Group Common
Stock (or like Convertible Securities convertible into or exercisable or
exchangeable for shares of Series B TCI Ventures Group Common Stock) to
holders of Series B TCI Ventures Group Common Stock; and
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(ii) a share distribution consisting of any class or series of securities
of the Company or any other person other than as described in the
immediately preceding clause (i) and other than TCI Group Common Stock or
Liberty Media Group Common Stock (or Convertible Securities convertible
into or exercisable or exchangeable for shares of TCI Group Common Stock or
Liberty Media Group Common Stock), either on the basis of a distribution of
identical securities, on an equal per share basis, to holders of Series A
TCI Ventures Group Common Stock and Series B TCI Ventures Group Common
Stock or on the basis of a distribution of one class or series of
securities to holders of Series A TCI Ventures Group Common Stock and
another class or series of securities to holders of Series B TCI Ventures
Group Common Stock, provided that the securities so distributed (and, if
the distribution consists of Convertible Securities, the securities into
which such Convertible Securities are convertible or for which they are
exercisable or exchangeable) do not differ in any respect other than their
relative voting rights and related differences in designation, conversion,
redemption and share distribution provisions, with holders of shares of
Series B TCI Ventures Group Common Stock receiving the class or series
having the higher relative voting rights (without regard to whether such
rights differ to a greater or lesser extent than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the Series A TCI Ventures Group Common
Stock and the Series B TCI Ventures Group Common Stock), provided that if
the securities so distributed constitute capital stock of a Subsidiary of
the Company, such rights will not differ to a greater extent than the
corresponding differences in voting rights, designation, conversion,
redemption and share distribution provisions between the Series A TCI
Ventures Group Common Stock and the Series B TCI Ventures Group Common
Stock, and provided in each case that such distribution is otherwise made
on an equal per share basis.
Because under the Charter the TCI Ventures Group is not permitted to have an
Inter-Group Interest in either the TCI Group or the Liberty Media Group, no
distributions on the TCI Ventures Group Common Stock of shares of TCI Group
Common Stock (or related Convertible Securities) or Liberty Media Group Common
Stock (or related Convertible Securities) are permitted.
The Company will not reclassify, subdivide or combine the Series A TCI
Ventures Group Common Stock without reclassifying, subdividing or combining
the Series B TCI Ventures Group Common Stock, on an equal per share basis, and
the Company will not reclassify, subdivide or combine the Series B TCI
Ventures Group Common Stock without reclassifying, subdividing or combining
the Series A TCI Ventures Group Common Stock, on an equal per share basis.
Conversion and Redemption
Conversion at the Option of the Holder. Each share of Series B TCI Group
Common Stock is convertible, at the option of the holder thereof, into one
share of Series A TCI Group Common Stock. Each share of Series B Liberty Media
Group Common Stock is convertible, at the option of the holder thereof, into
one share of Series A Liberty Media Group Common Stock. Each share of Series B
TCI Ventures Group Common Stock is convertible, at the option of the holder
thereof, into one share of Series A TCI Ventures Group Common Stock. Shares of
Series A TCI Group Common Stock are not convertible into shares of Series B
TCI Group Common Stock; shares of Series A Liberty Media Group Common Stock
are not convertible into shares of Series B Liberty Media Group Common Stock;
and shares of Series A TCI Ventures Group Common Stock are not convertible
into shares of Series B TCI Ventures Group Common Stock.
Conversion of Liberty Media Group Common Stock at the Option of the
Company. The Board of Directors may at any time declare that (i) all of the
outstanding shares of Series A Liberty Media Group Common Stock will be
converted into a number (or fraction) of fully paid and nonassessable shares
of Series A TCI Group Common Stock equal to the Liberty Media Group Optional
Conversion Ratio, and (ii) all of the outstanding shares of Series B Liberty
Media Group Common Stock will be converted into a number (or fraction) of
fully paid and nonassessable shares of Series B TCI Group Common Stock equal
to the Liberty Media Group Optional Conversion Ratio. As more fully described
below, the Liberty Media Group Optional Conversion Ratio is the
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ratio of the private market value of a share of Liberty Media Group Common
Stock determined by appraisal to the public trading price of a share of TCI
Group Common Stock.
Under the Charter, the "Liberty Media Group Optional Conversion Ratio" means
the quotient (calculated to the nearest five decimal places) obtained by
dividing (x) the Liberty Media Group Common Stock Per Share Value by (y) the
average Market Value of one share of Series A TCI Group Common Stock over the
20-Trading Day period ending on the Trading Day preceding the Appraisal Date.
The Liberty Media Group Common Stock Per Share Value will equal the quotient
obtained by dividing the Liberty Media Group Private Market Value by the
Adjusted Outstanding Shares of Liberty Media Group Common Stock, which will be
determined in the manner described below.
The "Liberty Media Group Private Market Value" means an amount equal to the
private market value of the Liberty Media Group as of the Appraisal Date. In
the event that the Company determines to establish the Liberty Media Group
Private Market Value, the Company shall designate the First Appraiser and a
committee of the Board of Directors all of whose members are independent
directors as determined under the Nasdaq National Market rules (the
"Independent Committee") shall designate the Second Appraiser. Not later than
20 days after the Selection Date, the First Appraiser and the Second Appraiser
will each determine its initial view as to the private market value of the
Liberty Media Group as of the Appraisal Date and will consult with one another
with respect thereto. Not later than the 30th day after the Selection Date,
the First Appraiser and the Second Appraiser will each have determined its
final view as to such private market value. If the Higher Appraised Amount is
not more than 120% of the Lower Appraised Amount, the Liberty Media Group
Private Market Value (subject to any adjustment described in the second
succeeding paragraph) will be the average of those two amounts. If the Higher
Appraised Amount is more than 120% of the Lower Appraised Amount, the First
Appraiser and the Second Appraiser will agree upon and jointly designate the
Mutually Designated Appraiser to determine such private market value. The
Mutually Designated Appraiser will not be provided with any of the work of the
First Appraiser and the Second Appraiser. The Mutually Designated Appraiser
will, no later than the 20th day after the date the Mutually Designated
Appraiser is designated, determine the Mutually Appraised Amount, and the
Liberty Media Group Private Market Value (subject to any adjustment described
in the second succeeding paragraph) will be (i) if the Mutually Appraised
Amount is between the Lower Appraised Amount and the Higher Appraised Amount,
(a) the average of (1) the Mutually Appraised Amount and (2) the Lower
Appraised Amount or the Higher Appraised Amount, whichever is closer to the
Mutually Appraised Amount, or (b) the Mutually Appraised Amount, if neither
the Lower Appraised Amount nor the Higher Appraised Amount is closer to the
Mutually Appraised Amount, or (ii) if the Mutually Appraised Amount is greater
than the Higher Appraised Amount or less than the Lower Appraised Amount, the
average of the Higher Appraised Amount and the Lower Appraised Amount. For
these purposes, if any such investment banking firm expresses its final view
of the private market value of the Liberty Media Group as a range of values,
such investment banking firm's final view of such private market value will be
deemed to be the midpoint of such range of values.
Each of the investment banking firms referred to in the immediately
preceding paragraph will be instructed to determine the private market value
of the Liberty Media Group as of the Appraisal Date based upon the amount a
willing purchaser would pay to a willing seller, in an arm's-length
transaction, if it were acquiring the Liberty Media Group, as if the Liberty
Media Group were a publicly traded non-controlled corporation and the
purchaser was acquiring all of the capital stock of such corporation and
without consideration of any potential regulatory constraints limiting the
potential purchasers of the Liberty Media Group other than that which would
have existed if the Liberty Media Group were a publicly traded non-controlled
entity.
Following the determination of the Liberty Media Group Private Market Value,
the investment banking firms whose final views of the private market value of
the Liberty Media Group were used in the calculation of the Liberty Media
Group Private Market Value will determine the Adjusted Outstanding Shares of
Liberty Media Group Common Stock together with any further appropriate
adjustments to the Liberty Media Group Private Market Value resulting from
such determination. The "Adjusted Outstanding Shares of Liberty Media Group
Common Stock" means a number, as determined by such investment banking firms
as of the Appraisal Date,
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equal to the sum of the number of shares of Liberty Media Group Common Stock
outstanding, the Number of Shares Issuable with Respect to the Liberty Media
Group Inter-Group Interest, the number of Committed Acquisition Shares
issuable, the number of shares of Liberty Media Group Common Stock issuable
upon the conversion, exercise or exchange of all Pre-Distribution Convertible
Securities and the number of shares of Liberty Media Group Common Stock
issuable upon the conversion, exercise or exchange of those Convertible
Securities (other than Pre-Distribution Convertible Securities and other than
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) the holders of which would
derive an economic benefit from conversion, exercise or exchange of such
Convertible Securities which exceeds the economic benefit of not converting,
exercising or exchanging such Convertible Securities. The "Liberty Media Group
Common Stock Per Share Value" means the quotient obtained by dividing the
Liberty Media Group Private Market Value by the Adjusted Outstanding Shares of
Liberty Media Group Common Stock, provided that if such investment banking
firms do not agree on the determinations provided for in this paragraph, the
Liberty Media Group Common Stock Per Share Value will be the average of the
quotients so obtained on the basis of the respective determinations of such
firms.
If the Company determines to convert shares of Series A Liberty Media Group
Common Stock into Series A TCI Group Common Stock and shares of Series B
Liberty Media Group Common Stock into Series B TCI Group Common Stock at the
Liberty Media Group Optional Conversion Ratio, such conversion will occur on a
conversion date on or prior to the 120th day following the Appraisal Date. If
the Company determines not to undertake such conversion, the Company may at
any time thereafter undertake to reestablish the Liberty Media Group Common
Stock Per Share Value as of a subsequent date.
Any such conversion would dilute the interests of holders of TCI Group
Common Stock and would preclude holders of Liberty Media Group Common Stock
from retaining their interest in a security reflecting separately the business
of the Liberty Media Group. In addition, the adjustments in respect of Pre-
Distribution Convertible Securities and Committed Acquisition Shares would
dilute the interests of holders of Liberty Media Group Common Stock upon any
conversion of shares of Liberty Media Group Common Stock into TCI Group Common
Stock at the Liberty Media Group Optional Conversion Ratio.
Conversion of TCI Ventures Group Common Stock at the Option of the
Company. The Board of Directors may at any time declare that (i) all of the
outstanding shares of Series A TCI Ventures Group Common Stock will be
converted into a number (or fraction) of fully paid and nonassessable shares
of Series A TCI Group Common Stock equal to the TCI Ventures Group Optional
Conversion Ratio, and (ii) all of the outstanding shares of Series B TCI
Ventures Group Common Stock will be converted into a number (or fraction) of
fully paid and nonassessable shares of Series B TCI Group Common Stock equal
to the TCI Ventures Group Optional Conversion Ratio. As more fully described
below, the TCI Ventures Group Optional Conversion Ratio is the ratio of the
private market value of a share of TCI Ventures Group Common Stock determined
by appraisal to the public trading price of a share of TCI Group Common Stock.
Under the Charter, the "TCI Ventures Group Optional Conversion Ratio" means
the quotient (calculated to the nearest five decimal places) obtained by
dividing (x) the TCI Ventures Group Common Stock Per Share Value by (y) the
average Market Value of one share of Series A TCI Group Common Stock over the
20-Trading Day period ending on the Trading Day preceding the Appraisal Date.
The TCI Ventures Group Common Stock Per Share Value will equal the quotient
obtained by dividing the TCI Ventures Group Private Market Value by the
Adjusted Outstanding Shares of TCI Ventures Group Common Stock, which will be
determined in the manner described below.
The "TCI Ventures Group Private Market Value" means an amount equal to the
private market value of the TCI Ventures Group as of the Appraisal Date. In
the event that the Company determines to establish the TCI Ventures Group
Private Market Value, the Company shall designate the First Appraiser and the
Independent Committee shall designate the Second Appraiser. Not later than 20
days after the Selection Date, the First Appraiser and the Second Appraiser
will each determine its initial view as to the private market value of the TCI
Ventures Group as of the Appraisal Date and will consult with one another with
respect thereto. Not later than
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the 30th day after the Selection Date, the First Appraiser and the Second
Appraiser will each have determined its final view as to such private market
value. If the Higher Appraised Amount is not more than 120% of the Lower
Appraised Amount, the TCI Ventures Group Private Market Value (subject to any
adjustment described in the second succeeding paragraph) will be the average
of those two amounts. If the Higher Appraised Amount is more than 120% of the
Lower Appraised Amount, the First Appraiser and the Second Appraiser will
agree upon and jointly designate the Mutually Designated Appraiser to
determine such private market value. The Mutually Designated Appraiser will
not be provided with any of the work of the First Appraiser and the Second
Appraiser. The Mutually Designated Appraiser will, no later than the 20th day
after the date the Mutually Designated Appraiser is designated, determine the
Mutually Appraised Amount, and the TCI Ventures Group Private Market Value
(subject to any adjustment described in the second succeeding paragraph) will
be (i) if the Mutually Appraised Amount is between the Lower Appraised Amount
and the Higher Appraised Amount, (a) the average of (1) the Mutually Appraised
Amount and (2) the Lower Appraised Amount or the Higher Appraised Amount,
whichever is closer to the Mutually Appraised Amount, or (b) the Mutually
Appraised Amount, if neither the Lower Appraised Amount nor the Higher
Appraised Amount is closer to the Mutually Appraised Amount, or (ii) if the
Mutually Appraised Amount is greater than the Higher Appraised Amount or less
than the Lower Appraised Amount, the average of the Higher Appraised Amount
and the Lower Appraised Amount. For these purposes, if any such investment
banking firm expresses its final view of the private market value of the TCI
Ventures Group as a range of values, such investment banking firm's final view
of such private market value will be deemed to be the midpoint of such range
of values.
Each of the investment banking firms referred to in the immediately
preceding paragraph will be instructed to determine the private market value
of the TCI Ventures Group as of the Appraisal Date based upon the amount a
willing purchaser would pay to a willing seller, in an arm's-length
transaction, if it were acquiring the TCI Ventures Group, as if the TCI
Ventures Group were a publicly traded non-controlled corporation and the
purchaser was acquiring all of the capital stock of such corporation and
without consideration of any potential regulatory constraints limiting the
potential purchasers of the TCI Ventures Group other than that which would
have existed if the TCI Ventures Group were a publicly traded non-controlled
entity.
Following the determination of the TCI Ventures Group Private Market Value,
the investment banking firms whose final views of the private market value of
the TCI Ventures Group were used in the calculation of the TCI Ventures Group
Private Market Value will determine the Adjusted Outstanding Shares of TCI
Ventures Group Common Stock together with any further appropriate adjustments
to the TCI Ventures Group Private Market Value resulting from such
determination. The "Adjusted Outstanding Shares of TCI Ventures Group Common
Stock" means a number, as determined by such investment banking firms as of
the Appraisal Date, equal to the sum of the number of shares of TCI Ventures
Group Common Stock outstanding, the Number of Shares Issuable with Respect to
the TCI Ventures Group Inter-Group Interest, the number of shares of TCI
Ventures Group Common Stock issuable upon the conversion, exercise or exchange
of all Pre-Exchange Offer Securities, and the number of shares of TCI Ventures
Group Common Stock issuable upon the conversion, exercise or exchange of those
Convertible Securities (other than Pre-Exchange Offer Securities) the holders
of which would derive an economic benefit from conversion, exercise or
exchange of such Convertible Securities which exceeds the economic benefit of
not converting, exercising or exchanging such Convertible Securities. The "TCI
Ventures Group Common Stock Per Share Value" means the quotient obtained by
dividing the TCI Ventures Group Private Market Value by the Adjusted
Outstanding Shares of TCI Ventures Group Common Stock, provided that if such
investment banking firms do not agree on the determinations provided for in
this paragraph, the TCI Ventures Group Common Stock Per Share Value will be
the average of the quotients so obtained on the basis of the respective
determinations of such firms.
If the Company determines to convert shares of Series A TCI Ventures Group
Common Stock into Series A TCI Group Common Stock and shares of Series B TCI
Ventures Group Common Stock into Series B TCI Group Common Stock at the TCI
Ventures Group Optional Conversion Ratio, such conversion will occur on a
conversion date on or prior to the 120th day following the Appraisal Date. If
the Company determines not to undertake such conversion, the Company may at
any time thereafter undertake to reestablish the TCI Ventures Group Common
Stock Per Share Value as of a subsequent date.
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Any such conversion would dilute the interests of holders of TCI Group
Common Stock and would preclude holders of TCI Ventures Group Common Stock
from retaining their interest in a security reflecting separately the business
of the TCI Ventures Group. In addition, the adjustments in respect of Pre-
Exchange Offer Securities would dilute the interests of holders of TCI
Ventures Group Common Stock upon any conversion of shares of TCI Ventures
Group Common Stock into TCI Group Common Stock at the TCI Ventures Group
Optional Conversion Ratio.
Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
Stock. Upon the Disposition, in one transaction or a series of related
transactions by the Company and its subsidiaries of all or substantially all
of the properties and assets of the Liberty Media Group to one or more
persons, entities or groups, the Company is required, on or prior to the 85th
Trading Day following the consummation of such Disposition, to take one of the
actions listed in the following paragraph. This requirement does not apply to
a Disposition (a) in connection with the Disposition by the Company of all of
the Company's properties and assets in one transaction or a series of related
transactions in connection with the liquidation, dissolution or winding up of
the Company, (b) by dividend, other distribution or redemption in accordance
with any provision described under "--Conversion and Redemption--Redemption of
Liberty Media Group Common Stock in Exchange for Stock of Subsidiary," "--
Dividends," "--Share Distributions," or "--Liquidation Rights," (c) to any
person, entity or group which the Company, directly or indirectly, after
giving effect to the Disposition, controls or (d) in connection with a Related
Business Transaction. For these purposes, "substantially all of the properties
and assets of the Liberty Media Group" means a portion of such properties and
assets that represents at least 80% of the then-current market value (as
determined by the Board of Directors) of the properties and assets of the
Liberty Media Group as of such date.
The action the Company is required to take is to either:
(i) subject to the limitations described under "--Dividends," declare and
pay a dividend in cash and/or securities or other property (other than a
dividend or distribution of Common Stock) to the holders of the outstanding
shares of Liberty Media Group Common Stock equally on a share for share
basis (subject to the provisions described in the last sentence of the
penultimate paragraph under this caption "--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock"), in an aggregate amount
equal to the product of the Liberty Media Group Outstanding Interest
Fraction as of the record date for determining the holders entitled to
receive such dividend and the Liberty Media Group Net Proceeds;
(ii) provided that there are assets of the Company legally available
therefor and the Liberty Media Group Available Dividend Amount would have
been sufficient to pay a dividend in lieu thereof as described in clause
(i) of this paragraph, then:
(A) if such Disposition involves all (not merely substantially all)
of the properties and assets of the Liberty Media Group, redeem all
outstanding shares of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock in exchange for cash and/or
securities or other property (other than Common Stock) in an aggregate
amount equal to the product of the Adjusted Liberty Media Group
Outstanding Interest Fraction as of the date of such redemption and the
Liberty Media Group Net Proceeds, such aggregate amount to be allocated
(subject to the provisions described in the last sentence of the
penultimate paragraph under this caption) to shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock
in the ratio of the number of shares of each such series outstanding
(so that the amount of consideration paid for the redemption of each
share of Series A Liberty Media Group Common Stock and each share of
Series B Liberty Media Group Common Stock is the same); or
(B) if such Disposition involves substantially all (but not all) of
the properties and assets of the Liberty Media Group, apply an
aggregate amount of cash and/or securities or other property (other
than Common Stock) equal to the product of the Liberty Media Group
Outstanding Interest Fraction as of the date shares are selected for
redemption and the Liberty Media Group Net Proceeds of such Disposition
to the redemption of outstanding shares of Series A Liberty Media Group
Common Stock
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and Series B Liberty Media Group Common Stock, such aggregate amount to
be allocated (subject to the provisions described in the last sentence
of the penultimate paragraph under this caption) to shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock in the ratio of the number of shares of each such series
outstanding, and the number of shares of each such series to be
redeemed to equal the lesser of (x) the whole number nearest the number
determined by dividing the aggregate amount so allocated to the
redemption of such series by the average Market Value of one share of
Series A Liberty Media Group Common Stock during the ten-Trading Day
period beginning on the 16th Trading Day following the consummation of
such Disposition and (y) the number of shares of such series
outstanding (so that the amount of consideration paid for the
redemption of each share of Series A Liberty Media Group Common Stock
and each share of Series B Liberty Media Group Common Stock is the
same); or
(iii) convert (A) each outstanding share of Series A Liberty Media Group
Common Stock into a number (or fraction) of fully paid and nonassessable
shares of Series A TCI Group Common Stock and (B) each outstanding share of
Series B Liberty Media Group Common Stock into a number (or fraction) of
fully paid and nonassessable shares of Series B TCI Group Common Stock, in
each case equal to 110% of the average daily ratio (calculated to the
nearest five decimal places) of the Market Value of one share of Series A
Liberty Media Group Common Stock to the Market Value of one share of Series
A TCI Group Common Stock during the ten-Trading Day period referred to in
clause (ii)(B) of this paragraph.
The Company may elect to pay the dividend or redemption price referred to in
clause (i) or (ii) of the second paragraph under this caption "--Mandatory
Dividend, Redemption or Conversion or Liberty Media Group Common Stock" either
in the same form as the proceeds of the Disposition were received or in any
other combination of cash or securities or other property (other than Common
Stock) that the Board of Directors determines will have an aggregate market
value on a fully distributed basis, of not less than the amount of the Liberty
Media Group Net Proceeds. If the dividend or redemption price is paid in the
form of securities of an issuer other than the Company, the Board of Directors
may determine either to (i) pay the dividend or redemption price in the form
of separate classes or series of securities, with one class or series of such
securities to holders of Series A Liberty Media Group Common Stock and another
class or series of securities to holders of Series B Liberty Media Group
Common Stock, provided that such securities (and, if such securities are
convertible into or exercisable or exchangeable for shares of another class or
series of securities, the securities so issuable upon such conversion,
exercise or exchange) do not differ in any respect other than their relative
voting rights and related differences in designation, conversion, redemption
and share distribution provisions, with holders of shares of Series B Liberty
Media Group Common Stock receiving the class or series having the higher
relative voting rights (without regard to whether such rights differ to a
greater or lesser extent than the corresponding differences in voting rights,
designation, conversion, redemption and share distribution provisions between
the Series A Liberty Media Group Common Stock and the Series B Liberty Media
Group Common Stock), provided that if such securities constitute capital stock
of a Subsidiary of the Company, such rights will not differ to a greater
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the Series A
Liberty Media Group Common Stock and the Series B Liberty Media Group Common
Stock, and otherwise such securities will be distributed on an equal per share
basis, or (ii) pay the dividend or redemption price in the form of a single
class of securities without distinction between the shares received by the
holders of Series A Liberty Media Group Common Stock and Series B Liberty
Media Group Common Stock. The Related Business Transaction exception to the
foregoing requirements would enable the Company to enter into transactions in
which the properties or assets of the Liberty Media Group may be considered to
be "disposed of" in exchange for equity securities of an entity engaged or
proposing to engage in similar or complementary business areas to those of the
Liberty Media Group while maintaining the capital structure and delineation of
business groups of the Liberty Media Group.
The effect of using the Adjusted Liberty Media Group Outstanding Interest
Fraction, instead of the Liberty Media Group Outstanding Interest Fraction, in
the determination of amounts to be paid in redemption of shares of Liberty
Media Group Common Stock following a Disposition of all of the properties and
assets of the Liberty Media Group is to allocate to the TCI Group a portion of
the Liberty Media Group Net Proceeds of the
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Disposition, in addition to the amount so allocated in respect of any Inter-
Group Interest, sufficient to provide for the delivery of the portion of the
consideration deliverable by the Company upon any post-Disposition conversion,
exercise or exchange of Pre-Distribution Convertible Securities that is in
substitution for shares of Liberty Media Group Common Stock that would have
been issuable upon such conversion, exercise or exchange if it had occurred
prior to such Distribution and to make similar provision for the Company's
obligation in respect of any Committed Acquisition Shares that remain
issuable. To the extent such Pre-Distribution Convertible Securities and
Committed Acquisition Shares are included in the determination of the Adjusted
Liberty Media Group Outstanding Interest Fraction, the Company's obligations
in respect of such securities would not be a reduction in the calculation of
the Liberty Media Group Net Proceeds. In the event any redemption of the
Liberty Media Group Common Stock or conversion of the Liberty Media Group
Common Stock into TCI Group Common Stock is made in circumstances in which
securities or property are allocated to the TCI Group in respect of Pre-
Distribution Convertible Securities, Committed Acquisition Shares or other
Convertible Securities entitled to receive such securities or property upon
conversion, exercise or exchange, the TCI Group will segregate and hold such
securities or other property separate (in the case of any securities or
property other than TCI Group Common Stock), or duly reserve shares of TCI
Group Common Stock issuable upon such conversion, exercise or exchange, for
the benefit of the holders of Pre-Distribution Convertible Securities,
Committed Acquisition Shares or other Convertible Securities. In the event the
holders of any such Pre-Distribution Convertible Securities or other
Convertible Securities do not convert, exercise or exchange such securities
prior to the expiration of any conversion or exercise right or the retirement
of such security, or the acquisition relating to such Committed Acquisition
Shares is not consummated (or any Convertible Securities which are convertible
into or exercisable or exchangeable for Committed Acquisition Shares are not
converted, exercised or exchanged), then the securities or other property so
reserved shall revert to the TCI Group and the former holders of Liberty Media
Group Common Stock shall have no interest in such securities or property.
At the time of any dividend made as a result of a Disposition referred to
above, the TCI Group will be credited, and the Liberty Media Group will be
charged (in addition to the charge for the dividend paid in respect of
outstanding shares of Liberty Media Group Common Stock), with an amount equal
to the product of (i) the aggregate amount paid in respect of such dividend
times (ii) a fraction the numerator of which is the Liberty Media Group Inter-
Group Interest Fraction and the denominator of which is the Liberty Media
Group Outstanding Interest Fraction.
The option to convert the Liberty Media Group Common Stock into TCI Group
Common Stock in the event of a Disposition provides the Company with
additional flexibility by allowing the Company to deliver consideration in the
form of shares of TCI Group Common Stock rather than cash or securities or
other properties. This alternative could be used, for example, in
circumstances when the Company did not have sufficient legally available
assets under the DGCL to pay the full amount of an otherwise required dividend
or redemption or when the Company desired to retain such proceeds.
If less than substantially all of the properties and assets of the Liberty
Media Group were disposed of by the Company in one transaction, the Company
would not be required to pay a dividend on, redeem or convert the outstanding
shares of Liberty Media Group Common Stock, even if an additional transaction
were consummated at a later time in which additional properties and assets of
the Liberty Media Group were disposed of by the Company, which, together with
the properties and assets disposed of in the first transaction, would have
constituted substantially all of the properties and assets of the Liberty
Media Group at the time of the first transaction, unless such transactions
constituted a series of related transactions. The second transaction, however,
could trigger such a requirement if, at the time of the second transaction,
the properties and assets disposed of in such transaction constituted at least
substantially all of the properties and assets of the Liberty Media Group at
such time. If less than substantially all of the properties and assets of the
Liberty Media Group were disposed of by the Company, the holders of the
Liberty Media Group Common Stock would not be entitled to receive any dividend
or have their shares redeemed or converted for TCI Group Common Stock,
although the Board of Directors could determine, in its sole discretion, to
pay a dividend on the Liberty Media Group Common Stock in an amount related to
the proceeds of such Disposition.
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Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common
Stock. Upon the Disposition in one transaction or a series of related
transactions by the Company and its subsidiaries of all or substantially all
of the properties and assets of the TCI Ventures Group to any one or more
persons, entities or groups, the Company is required, on or prior to the 85th
Trading Day following the consummation of such Disposition, to take one of the
actions listed in the following paragraph. This requirement does not apply to
a Disposition (a) in connection with the Disposition by the Company of all of
the Company's properties and assets in one transaction or a series of related
transactions in connection with the liquidation, dissolution or winding up of
the Company, (b) by dividend, other distribution or redemption in accordance
with any provision described under "--Conversion and Redemption--Redemption of
TCI Ventures Group Common Stock in Exchange for Stock of Subsidiary" "--
Dividends," "--Share Distributions," or "--Liquidation Rights," (c) to any
person, entity or group which the Company, directly or indirectly, after
giving effect to the Disposition, controls or (d) in connection with a Related
Business Transaction. For these purposes, "substantially all of the properties
and assets of the TCI Ventures Group" means a portion of such properties and
assets that represents at least 80% of the then-current market value (as
determined by the Board of Directors) of the properties and assets of the TCI
Ventures Group as of such date.
The action the Company is required to take is to either:
(i) subject to the limitations described above under "--Dividends,"
declare and pay a dividend in cash and/or securities or other property
(other than a dividend or distribution of Common Stock) to the holders of
the outstanding shares of TCI Ventures Group Common Stock equally on a
share for share basis (subject to the provisions described in the second
sentence of the third paragraph under this caption "--Mandatory Dividends,
Redemption or Conversion of TCI Ventures Group Common Stock,") in an
aggregate amount equal to the product of the TCI Ventures Group Outstanding
Interest Fraction as of the record date for determining the holders
entitled to receive such dividend and the TCI Ventures Group Net Proceeds
of such Disposition;
(ii) provided that there are assets of the Company legally available
therefor and the TCI Ventures Group Available Dividend Amount would have
been sufficient to pay a dividend in lieu thereof as described in clause
(i) of this paragraph, then:
(A) if such Disposition involves all (not merely substantially all)
of the properties and assets of the TCI Ventures Group, redeem all
outstanding shares of Series A TCI Ventures Group Common Stock and
Series B TCI Ventures Group Common Stock in exchange for cash and/or
securities or other property (other than Common Stock) in an aggregate
amount equal to the product of the Adjusted TCI Ventures Group
Outstanding Interest Fraction as of the date of such redemption and the
TCI Ventures Group Net Proceeds of such Disposition, such aggregate
amount to be allocated (subject to the provisions described in the
second sentence of the following paragraph) to shares of Series A TCI
Ventures Group Common Stock and Series B TCI Ventures Group Common
Stock in the ratio of the number of shares of each such series
outstanding (so that the amount of consideration paid for the
redemption of each share of Series A TCI Ventures Group Common Stock
and each share of Series B TCI Ventures Group Common Stock is the
same); or
(B) if such Disposition involves substantially all (but not all) of
the properties and assets of the TCI Ventures Group, apply an aggregate
amount of cash and/or securities or other property (other than Common
Stock) equal to the product of the TCI Ventures Group Outstanding
Interest Fraction as of the date shares are selected for redemption and
the TCI Ventures Group Net Proceeds of such Disposition to the
redemption of outstanding shares of Series A TCI Ventures Group Common
Stock and Series B TCI Ventures Group Common Stock, such aggregate
amount to be allocated (subject to the provisions described in the
second sentence of the following paragraph) to shares of Series A TCI
Ventures Group Common Stock and Series B TCI Ventures Group Common
Stock in the ratio of the number of shares of each such series
outstanding, with the number of shares of each such series to be
redeemed to equal the lesser of (x) the whole number nearest the number
determined by dividing the aggregate amount so allocated to the
redemption of such series by the average Market Value of one
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share of Series A TCI Ventures Group Common Stock during the ten-
Trading Day period beginning on the 16th Trading Day following the
consummation of such Disposition and (y) the number of shares of such
series outstanding (so that the amount of consideration paid for the
redemption of each share of Series A TCI Ventures Group Common Stock
and each share of Series B TCI Ventures Group Common Stock is the
same); or
(iii) convert (A) each outstanding share of Series A TCI Ventures Group
Common Stock into a number (or fraction) of fully paid and nonassessable
shares of Series A TCI Group Common Stock and (B) each outstanding share of
Series B TCI Ventures Group Common Stock into a number (or fraction) of
fully paid and nonassessable shares of Series B TCI Group Common Stock, in
each case equal to 110% of the average daily ratio (calculated to the
nearest five decimal places) of the Market Value of one share of Series A
TCI Ventures Group Common Stock to the Market Value of one share of Series
A TCI Group Common Stock during the ten-Trading Day period referred to in
clause (ii)(B) of this paragraph.
The Company may elect to pay the dividend or redemption price referred to in
clause (i) or (ii) of the second paragraph under this caption "--Mandatory
Dividend, Redemption or Conversion of TCI Ventures Group Common Stock" either
in the same form as the proceeds of the Disposition were received or in any
other combination of cash or securities or other property (other than Common
Stock) that the Board of Directors determines will have an aggregate market
value on a fully distributed basis, of not less than the amount of the TCI
Ventures Group Net Proceeds. If the dividend or redemption price is paid in
the form of securities of an issuer other than the Company, the Board of
Directors may determine either to (i) pay the dividend or redemption price in
the form of separate classes or series of securities, with one class or series
of such securities to holders of Series A TCI Ventures Group Common Stock and
another class or series of securities to holders of Series B TCI Ventures
Group Common Stock, provided that such securities (and, if such securities are
convertible into or exercisable or exchangeable for shares of another class or
series of securities, the securities so issuable upon such conversion,
exercise or exchange) do not differ in any respect other than their relative
voting rights and related differences in designation, conversion, redemption
and share distribution provisions, with holders of shares of Series B TCI
Ventures Group Common Stock receiving the class or series having the higher
relative voting rights (without regard to whether such rights differ to a
greater or lesser extent than the corresponding differences in voting rights,
designation, conversion, redemption and share distribution provisions between
the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures
Group Common Stock), provided that if such securities constitute capital stock
of a Subsidiary of the Company, such rights will not differ to a greater
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the Series A
TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common
Stock, and otherwise such securities will be distributed on an equal per share
basis, or (ii) pay the dividend or redemption price in the form of a single
class of securities without distinction between the shares received by the
holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures
Group Common Stock. The Related Business Transaction exception to the
foregoing requirements would enable the Company to enter into transactions in
which the properties or assets of the TCI Ventures Group may be considered to
be "disposed of" in exchange for equity securities of an entity engaged or
proposing to engage in similar or complementary business areas to those of the
TCI Ventures Group while maintaining the capital structure and delineation of
business groups of the TCI Ventures Group.
The effect of using the Adjusted TCI Ventures Group Outstanding Interest
Fraction, instead of the TCI Ventures Group Outstanding Interest Fraction, in
the determination of amounts to be paid in redemption of shares of TCI
Ventures Group Common Stock following a Disposition of all of the properties
and assets of the TCI Ventures Group is to allocate to the TCI Group a portion
of the TCI Ventures Group Net Proceeds of the Disposition, in addition to the
amount so allocated in respect of any Inter-Group Interest, sufficient to
provide for the delivery of the portion of the consideration deliverable by
the Company upon any post-Disposition conversion, exercise or exchange of Pre-
Exchange Offer Securities that is in substitution for shares of TCI Ventures
Group Common Stock that would have been issuable upon such conversion,
exercise or exchange if it had occurred prior to such Disposition. To the
extent such Pre-Exchange Offer Securities are included in the determination of
the Adjusted TCI Ventures Group Outstanding Interest Fraction, the Company's
obligations in
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respect of such securities would not be a reduction in the calculation of the
TCI Ventures Group Net Proceeds. In the event any redemption of the TCI
Ventures Group Common Stock or conversion of the TCI Ventures Group Common
Stock into TCI Group Common Stock is made in circumstances in which securities
or property are allocated to the TCI Group in respect of Pre-Exchange Offer
Securities or other Convertible Securities entitled to receive such securities
or property upon conversion, exercise or exchange, the TCI Group will
segregate and hold such securities or other property separate (in the case of
any securities or property other than TCI Group Common Stock), or duly reserve
shares of TCI Group Common Stock issuable upon such conversion, exercise or
exchange, for the benefit of the holders of Pre-Exchange Offer Securities or
other Convertible Securities. In the event the holders of any such Pre-
Exchange Offer Securities or other Convertible Securities do not convert,
exercise or exchange such securities prior to the expiration of any
conversion, exercise or exchange right or the retirement of such security,
then the securities or other property so reserved shall revert to the TCI
Group and the former holders of TCI Ventures Group Common Stock shall have no
interest in such securities or property.
At the time of any dividend made as a result of a Disposition referred to
above, the TCI Group will be credited, and the TCI Ventures Group will be
charged (in addition to the charge for the dividend paid in respect of
outstanding shares of TCI Ventures Group Common Stock), with an amount equal
to the product of (i) the aggregate amount paid in respect of such dividend
times (ii) a fraction the numerator of which is the TCI Ventures Group Inter-
Group Interest Fraction and the denominator of which is the TCI Ventures Group
Outstanding Interest Fraction.
The option to convert the TCI Ventures Group Common Stock into TCI Group
Common Stock in the event of a Disposition provides the Company with
additional flexibility by allowing the Company to deliver consideration in the
form of shares of TCI Group Common Stock rather than cash or securities or
other properties. This alternative could be used, for example, in
circumstances when the Company did not have sufficient legally available
assets under the DGCL to pay the full amount of an otherwise required dividend
or redemption or when the Company desired to retain such proceeds.
If less than substantially all of the properties and assets of the TCI
Ventures Group were disposed of by the Company in one transaction, the Company
would not be required to pay a dividend on, redeem or convert the outstanding
shares of TCI Ventures Group Common Stock, even if an additional transaction
were consummated at a later time in which additional properties and assets of
the TCI Ventures Group were disposed of by the Company, which, together with
the properties and assets disposed of in the first transaction, would have
constituted substantially all of the properties and assets of the TCI Ventures
Group at the time of the first transaction, unless such transactions
constituted a series of related transactions. The second transaction, however,
could trigger such a requirement if, at the time of the second transaction,
the properties and assets disposed of in such transaction constituted at least
substantially all of the properties and assets of the TCI Ventures Group at
such time. If less than substantially all of the properties and assets of the
TCI Ventures Group were disposed of by the Company, the holders of the TCI
Ventures Group Common Stock would not be entitled to receive any dividend or
have their shares redeemed or converted for TCI Group Common Stock, although
the Board of Directors could determine, in its sole discretion, to pay a
dividend on the TCI Ventures Group Common Stock in an amount related to the
proceeds of such Disposition.
Redemption of Liberty Media Group Common Stock in Exchange for Stock of
Subsidiary. At any time at which all of the assets and liabilities attributed
to the Liberty Media Group have become and continue to be held directly or
indirectly by any one or more corporations that are Qualifying Subsidiaries
(the "Liberty Media Group Subsidiaries"), the Board of Directors may, subject
to the availability of assets of the Company legally available therefor,
redeem, on a pro rata basis, all of the outstanding shares of Liberty Media
Group Common Stock in exchange for an aggregate number of outstanding fully
paid and nonassessable shares of common stock of each Liberty Media Group
Subsidiary equal to the product of the Adjusted Liberty Media Group
Outstanding Interest Fraction and the number of outstanding shares of common
stock of such Liberty Media Group Subsidiary that are owned by the Company.
The effect of using the Adjusted Liberty Media Group Outstanding Interest
Fraction, instead of the Liberty Media Group Outstanding Interest Fraction, in
the determination of the number
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of shares of the Liberty Media Group Subsidiaries deliverable in such a
redemption is to allocate to the TCI Group a portion of the shares of the
Liberty Media Group Subsidiaries, in addition to the number of such shares so
allocated in respect of any Inter-Group Interest, sufficient to provide for
the delivery of the consideration deliverable by the Company upon any post-
redemption conversion, exercise or exchange of Pre-Distribution Convertible
Securities that become so payable in substitution for shares of Liberty Media
Group Common Stock that would have been issuable upon such conversion,
exercise or exchange if it had occurred prior to such redemption and to make
similar provision for the Company's obligations in respect of any Committed
Acquisition Shares that remain issuable.
In effecting such a redemption, the Board of Directors may determine either
to (i) redeem shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock in exchange for shares of separate classes or
series of common stock of each Liberty Media Group Subsidiary with relative
voting rights and related differences in designation, conversion, redemption
and share distribution provisions not greater than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the Series A Liberty Media Group Common Stock
and Series B Liberty Media Group Common Stock, with holders of shares of
Series B Liberty Media Group Common Stock receiving the class or series having
the higher relative voting rights, or (ii) redeem shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock in
exchange for shares of a single class of common stock of each Liberty Media
Group Subsidiary without distinction between the shares distributed to the
holders of the two series of Liberty Media Group Common Stock. If the Company
determines to undertake a redemption as described in clause (i) of the
preceding sentence, the outstanding shares of common stock of each Liberty
Media Group Subsidiary not distributed to holders of Liberty Media Group
Common Stock shall consist solely of the class or series having the lower
relative voting rights.
Redemption of TCI Ventures Group Common Stock in Exchange for Stock of
Subsidiary. At any time at which all of the assets and liabilities attributed
to the TCI Ventures Group have become and continue to be held directly or
indirectly by any one or more corporations that are Qualifying Subsidiaries
(the "TCI Ventures Group Subsidiaries"), the Board of Directors may, subject
to the availability of assets of the Company legally available therefor,
redeem on a pro rata basis, all of the outstanding shares of TCI Ventures
Group Common Stock in exchange for an aggregate number of outstanding, fully
paid and nonassessable shares of common stock of each TCI Ventures Group
Subsidiary equal to the product of the Adjusted TCI Ventures Group Outstanding
Interest Fraction and the number of outstanding shares of common stock of such
TCI Ventures Group Subsidiary that are owned by the Company. The effect of
using the Adjusted TCI Ventures Group Outstanding Interest Fraction, instead
of the TCI Ventures Group Outstanding Interest Fraction, in the determination
of the number of shares of the TCI Ventures Group Subsidiaries deliverable in
such a redemption is to allocate to the TCI Group a portion of the shares of
the TCI Ventures Group Subsidiaries, in addition to the number of such shares
so allocated in respect of any Inter-Group Interest, sufficient to provide for
the delivery of the consideration deliverable by the Company upon any post-
redemption conversion, exercise or exchange of Pre-Exchange Offer Securities
that become so payable in substitution for shares of TCI Ventures Group Common
Stock that would have been issuable upon such conversion, exercise or exchange
if it had occurred prior to such redemption.
In effecting such a redemption, the Board of Directors may determine either
to (i) redeem shares of Series A TCI Ventures Group Common Stock and Series B
TCI Ventures Group Common Stock in exchange for shares of separate classes or
series of common stock of each TCI Ventures Group Subsidiary with relative
voting rights and related differences in designation, conversion, redemption
and share distribution provisions not greater than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the Series A TCI Ventures Group Common Stock
and Series B TCI Ventures Group Common Stock, with holders of shares of Series
B TCI Ventures Group Common Stock receiving the class or series having the
higher relative voting rights, or (ii) redeem shares of Series A TCI Ventures
Group Common Stock and Series B TCI Ventures Group Common Stock in exchange
for shares of a single class of common stock of each TCI Ventures Group
Subsidiary without distinction between the shares distributed to the holders
of the two series of TCI Ventures Group Common Stock.
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Certain Provisions Respecting Convertible Securities. Unless the provisions
of any class or series of Pre-Distribution Convertible Securities or
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares provide specifically to the
contrary, after any conversion date or redemption date on which all
outstanding shares of Liberty Media Group Common Stock were converted or
redeemed, any share of Liberty Media Group Common Stock that is issued on
conversion, exercise or exchange of any Pre-Distribution Convertible
Securities or any Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares will, immediately
upon issuance pursuant to such conversion, exercise or exchange and without
any notice or any other action on the part of the Company or the Board of
Directors or the holder of such share of Liberty Media Group Common Stock, be
converted into or redeemed in exchange for, as applicable, the kind and amount
of shares of capital stock, cash and/or other securities or property that a
holder of such Pre-Distribution Convertible Securities or any Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares would have been entitled to receive as a result
of such conversion and redemption had such securities been converted,
exercised or exchanged immediately prior to such action. With respect to any
Convertible Securities that are convertible into or exercisable or
exchangeable for shares of Liberty Media Group Common Stock and which are
created, established or otherwise first authorized for issuance subsequent to
the record date for the Liberty Media Group Distribution (other than Pre-
Distribution Convertible Securities and Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares), the terms and provisions of which do not provide for adjustments
specifying the kind and amount of capital stock, cash and/or securities or
other property that such holder would be entitled to receive upon the
conversion, exercise or exchange of such Convertible Securities following any
conversion date or redemption date on which all outstanding shares of Liberty
Media Group Common Stock were converted or redeemed, then upon such
conversion, exercise or exchange of such Convertible Securities, any share of
Liberty Media Group Common Stock that is issued on conversion, exercise or
exchange of any such Convertible Securities will, immediately upon issuance
and without any notice or any other action on the part of the Company or the
Board of Directors or the holder of such share of Liberty Media Group Common
Stock, be redeemed in exchange for, to the extent assets of the Company are
legally available therefor, the amount of $.01 per share in cash.
Unless the provisions of the Pre-Exchange Offer Securities provide
specifically to the contrary, after any conversion date or redemption date on
which all outstanding shares of TCI Ventures Group Common Stock were converted
or redeemed, any share of TCI Ventures Group Common Stock that is issued on
conversion, exercise or exchange of any Pre-Exchange Offer Securities will,
immediately upon issuance pursuant to such conversion, exercise or exchange
and without any notice or any other action on the part of the Company or its
Board of Directors or the holder of such share of TCI Ventures Group Common
Stock, be converted into or redeemed in exchange for, as applicable, the kind
and amount of shares of capital stock, cash and/or securities or other
property that a holder of such Pre-Exchange Offer Securities would have been
entitled to receive as a result of such conversion and redemption had such
Pre-Exchange Offer Securities been converted, exercised or exchanged
immediately prior to such action. Unless the provisions of any class or series
of Convertible Securities (other than Pre-Exchange Offer Securities) which are
convertible into or exercisable or exchangeable for shares of TCI Ventures
Group Common Stock provide specifically to the contrary, after any conversion
date or redemption date on which all outstanding shares of TCI Ventures Group
Common Stock were converted or redeemed, any share of TCI Ventures Group
Common Stock that is issued on conversion, exercise or exchange of any such
Convertible Securities will, immediately upon issuance pursuant to such
conversion, exercise or exchange and without any notice or any other action on
the part of the Company or its Board of Directors or the holder of such share
of TCI Ventures Group Common Stock, be redeemed in exchange for, to the extent
assets of the Company are legally available therefor, the amount of $.01 per
share in cash.
General Conversion and Redemption Provisions. Not later than the 10th
Trading Day following the consummation of a Disposition referred to above
under "--Conversion and Redemption--Mandatory Dividend, Redemption or
Conversion of Liberty Media Group Common Stock," the Company will announce
publicly by press release (i) the Liberty Media Group Net Proceeds of such
Disposition, (ii) the number of outstanding shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock, (iii) the
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number of shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock into or for which Convertible Securities are
then convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof (and stating which, if any, of such Convertible
Securities constitute Pre-Distribution Convertible Securities or Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares) and the number of Committed Acquisition Shares
issuable, (iv) the Liberty Media Group Outstanding Interest Fraction as of a
recent date preceding the date of such notice and (v) the Adjusted Liberty
Media Group Outstanding Interest Fraction as of a recent date preceding the
date of such notice. Not earlier than the 26th Trading Day and not later than
the 30th Trading Day following the consummation of such Disposition, the
Company will announce publicly by press release which of the actions described
in clause (i), (ii) or (iii) of the second paragraph under "--Conversion and
Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock" it has irrevocably determined to take.
If the Company determines to pay a dividend described in clause (i) of the
second paragraph under "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock," the Company
will, not later than the 30th Trading Day following the consummation of such
Disposition, cause to be given to each holder of outstanding shares of Series
A Liberty Media Group Common Stock and Series B Liberty Media Group Common
Stock, a notice setting forth (i) the record date for determining holders
entitled to receive such dividend, which will be not earlier than the 40th
Trading Day and not later than the 50th Trading Day following the consummation
of such Disposition, (ii) the anticipated payment date of such dividend (which
will not be more than 85 Trading Days following the consummation of such
Disposition), (iii) the kind of shares of capital stock, cash and/or other
securities or property to be distributed in respect of shares of Series A
Liberty Media Group Common Stock and Series B Liberty Media Group Common
Stock, (iv) the Liberty Media Group Net Proceeds of such Disposition, (v) the
Liberty Media Group Outstanding Interest Fraction as of a recent date
preceding the date of such notice, and (vi) the number of outstanding shares
of Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock and the number of shares of Series A Liberty Media Group Common
Stock and Series B Liberty Media Group Common Stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof.
If the Company determines to undertake a redemption of shares of Liberty
Media Group Common Stock following a Disposition of all (not merely
substantially all) of the properties and assets of the Liberty Media Group as
described in clause (ii)(A) of the second paragraph under "--Conversion and
Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock," the Company will cause to be given to each holder of
outstanding shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock a notice setting forth (i) a statement that
all shares of Liberty Media Group Common Stock outstanding on the redemption
date will be redeemed, (ii) the redemption date (which will not be more than
85 Trading Days following the consummation of such Disposition), (iii) the
kind of shares of capital stock, cash and/or other securities or property to
be paid as a redemption price in respect of shares of Liberty Media Group
Common Stock outstanding on the redemption date, (iv) the Liberty Media Group
Net Proceeds of such Disposition, (v) the Adjusted Liberty Media Group
Outstanding Interest Fraction as of a recent date preceding the date of such
notice, (vi) the place or places where certificates for shares of Liberty
Media Group Common Stock, properly endorsed or assigned for transfer (unless
the Company waives such requirement), are to be surrendered for delivery of
certificates for shares of such capital stock, cash and/or other securities or
property, and (vii) the number of outstanding shares of Series A Liberty Media
Group Common Stock and Series B Liberty Media Group Common Stock and the
number of shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof (and stating which, if any, of
such Convertible Securities constitute Pre-Distribution Convertible Securities
or Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) and the number of Committed
Acquisition Shares issuable. Such notice will be sent not less than 35 Trading
Days nor more than 45 Trading Days prior to the redemption date.
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If the Company determines to undertake a redemption of shares of Liberty
Media Group Common Stock following a Disposition of substantially all (but not
all) of the properties and assets of the Liberty Media Group as described in
clause (ii)(B) of the second paragraph under "--Conversion and Redemption--
Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
Stock," the Company will, not later than the 30th Trading Day following the
consummation of such Disposition, cause to be given to each holder of record
of outstanding shares of Series A Liberty Media Group Common Stock and Series
B Liberty Media Group Common Stock a notice setting forth (i) a date not
earlier than the 40th Trading Day and not later than the 50th Trading Day
following the consummation of such Disposition which will be the date on which
shares of the Liberty Media Group Common Stock then outstanding will be
selected for redemption, (ii) the anticipated redemption date (which will not
be more than 85 Trading Days following the consummation of such Disposition),
(iii) the kind of shares of capital stock, cash and/or other securities or
property to be paid as a redemption price in respect of shares of Liberty
Media Group Common Stock selected for redemption, (iv) the Liberty Media Group
Net Proceeds of such Disposition, (v) the Liberty Media Group Outstanding
Interest Fraction as of a recent date preceding the date of such notice, (vi)
the number of outstanding shares of Series A Liberty Media Group Common Stock
and Series B Liberty Media Group Common Stock and the number of shares of
Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock into or for which outstanding Convertible Securities are then
convertible, exercisable or exchangeable and the conversion, exercise or
exchange prices thereof and (vii) a statement that the Company will not be
required to register a transfer of any shares of Liberty Media Group Common
Stock for a period of 15 Trading Days next preceding the date referred to in
clause (i) of this sentence. Promptly following the date referred to in clause
(i) of the preceding sentence, but not earlier than the 40th Trading Day and
not later than the 50th Trading Day following the consummation of such
Disposition, the Company will cause to be given to each holder of shares of
Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock to be redeemed, a notice setting forth (i) the number of shares
of Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock held by such holder to be redeemed, (ii) a statement that such
shares of Series A Liberty Media Group Common Stock and Series B Liberty Media
Group Common Stock will be redeemed, (iii) the redemption date (which will not
be more than 85 Trading Days following the consummation of such Disposition),
(iv) the kind and per share amount of shares of capital stock, cash and/or
other securities or property to be received by such holder with respect to
each share of such Liberty Media Group Common Stock to be redeemed, including
details as to the calculation thereof, and (v) the place or places where
certificates for shares of such Liberty Media Group Common Stock, properly
endorsed or assigned for transfer (unless the Company waives such
requirement), are to be surrendered for delivery of certificates for shares of
such capital stock, cash and/or other securities or property. The outstanding
shares of Liberty Media Group Common Stock to be redeemed will be redeemed by
the Company pro rata among the holders of Liberty Media Group Common Stock or
by such other method as may be determined by the Board of Directors to be
equitable.
In the event of any conversion as described above under "--Conversion and
Redemption --Conversion of Liberty Media Group Common Stock at the Option of
the Company" or "--Conversion and Redemption--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock," the Company will cause to
be given to each holder of outstanding shares of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock a notice setting
forth (i) a statement that all outstanding shares of Liberty Media Group
Common Stock will be converted, (ii) the conversion date (which will not be
more than 85 Trading Days following the consummation of such Disposition in
the event of a conversion pursuant to the provisions described under "--
Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock" and which will not be more than 120 days
after the Appraisal Date in the event of a conversion pursuant to the
provisions described under "--Conversion and Redemption--Conversion of Liberty
Media Group Common Stock at the Option of the Company"), (iii) the per share
number (or fraction) of shares of Series A TCI Group Common Stock or Series B
TCI Group Common Stock, as applicable, to be received with respect to each
share of Series A Liberty Media Group Common Stock or Series B Liberty Media
Group Common Stock, including details as to the calculation thereof, (iv) the
place or places where certificates for shares of Liberty Media Group Common
Stock, properly endorsed or assigned for transfer (unless the Company waives
such requirement), are to be surrendered, and (v) the number of outstanding
shares
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of Series A Liberty Media Group Common Stock and Series B Liberty Media Group
Common Stock, the number of Committed Acquisition Shares issuable and the
number of shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof. Such notice will be sent not
less than 35 Trading Days nor more than 45 Trading Days prior to the
conversion date.
If the Company determines to redeem shares of Series A Liberty Media Group
Common Stock and Series B Liberty Media Group Common Stock as described above
under "--Conversion and Redemption--Redemption of Liberty Media Group Common
Stock in Exchange for Stock of Subsidiary," the Company will promptly cause to
be given to each holder of Series A Liberty Media Group Common Stock and
Series B Liberty Media Group Common Stock a notice setting forth (i) a
statement that all outstanding shares of Liberty Media Group Common Stock will
be redeemed in exchange for shares of common stock of the Liberty Media Group
Subsidiaries, (ii) the redemption date, (iii) the Adjusted Liberty Media Group
Outstanding Interest Fraction as of a recent date preceding the date of such
notice, (iv) the place or places where certificates for shares of Liberty
Media Group Common Stock, properly endorsed or assigned for transfer (unless
the Company waives such requirement), are to be surrendered for delivery of
certificates for shares of common stock of the Liberty Media Group
Subsidiaries, and (v) the number of outstanding shares of Series A Liberty
Media Group Common Stock and Series B Liberty Media Group Common Stock and the
number of shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof (and stating which, if any, of
such Convertible Securities constitute Pre-Distribution Convertible Securities
or Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) and the number of Committed
Acquisition Shares issuable. Such notice will be sent by not less than 35
Trading Days nor more than 45 Trading Days prior to the redemption date.
In each case in which a notice is required to be given to holders of
outstanding shares of Series A Liberty Media Group Common Stock and Series B
Liberty Media Group Common Stock in accordance with the preceding five
paragraphs (other than a notice to holders of shares selected for redemption),
notice shall also be given, within the required time period, to each holder of
Convertible Securities that are convertible into or exercisable or
exchangeable for shares of either such series (unless provision for such
notice is otherwise made pursuant to the terms of such Convertible
Securities), which notice shall include, in addition to all of the information
set forth in the corresponding notice to holders of Liberty Media Group Common
Stock, a statement to the effect that the holders of such Convertible
Securities will be entitled to receive the dividend, participate in the
redemption of shares following a Disposition or in the selection of shares for
redemption, participate in the conversion of shares or participate in the
redemption of shares in exchange for stock of the Liberty Media Group
Subsidiaries only if such holder appropriately converts, exercises or
exchanges such Convertible Securities on or prior to the record date for the
dividend, redemption date, date fixed for selection of shares to be redeemed
or conversion date, as applicable, set forth in such notice. In the case of a
redemption or conversion of shares of Liberty Media Group Common Stock, the
notice to holders of Convertible Securities shall also state what, if
anything, such holders will be entitled to receive pursuant to the terms of
such Convertible Securities or, if applicable, the provision described under
"--Conversion and Redemption--Certain Provisions Respecting Convertible
Securities" if such holders convert, exercise or exchange such Convertible
Securities following the redemption date or conversion date, as applicable.
All notices required to be given in accordance with the preceding paragraphs
will be sent to a holder by first-class mail, postage prepaid, at the holder's
address as the same appears on the transfer books of the Company. Neither the
failure to mail any notice to any particular holder of Liberty Media Group
Common Stock or of Convertible Securities nor any defect therein will affect
the sufficiency thereof with respect to any other holder of outstanding shares
of Liberty Media Group Common Stock or of Convertible Securities, or the
validity of any conversion or redemption.
The Company will not be required to issue or deliver fractional shares of
any class of capital stock or any fractional securities to any holder of
Liberty Media Group Common Stock upon any conversion, redemption,
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dividend or other distribution described above. In connection with the
determination of the number of shares of any class of capital stock that is
issuable or the amount of securities that is deliverable to any holder of
record upon any such conversion, redemption, dividend or other distribution
(including any fractions of shares or securities), the Company may aggregate
the number of shares of Liberty Media Group Common Stock held at the relevant
time by such holder of record. If the number of shares of any class of capital
stock or the amount of securities remaining to be issued or delivered to any
holder of Liberty Media Group Common Stock is a fraction, the Company will, if
such fraction is not issued or delivered to such holder, pay a cash adjustment
in respect of such fraction in an amount equal to the fair market value of
such fraction on the fifth Trading Day prior to the date such payment is to be
made (without interest). For purposes of the preceding sentence, "fair market
value" of any fraction will be (i) in the case of any fraction of a share of
capital stock of the Company, the product of such fraction and the Market
Value of one share of such capital stock and (ii) in the case of any other
fractional security, such value as is determined by the Board of Directors.
No adjustments in respect of dividends will be made upon the conversion or
redemption of any shares of Liberty Media Group Common Stock; provided,
however, that if the conversion date or the redemption date with respect to
the Liberty Media Group Common Stock is subsequent to the record date for the
payment of a dividend or other distribution thereon or with respect thereto,
the holders of shares of Liberty Media Group Common Stock at the close of
business on such record date will be entitled to receive the dividend or other
distribution payable on or with respect to such shares on the date set for
payment of such dividend or other distribution, notwithstanding the conversion
or redemption of such shares or the Company's default in payment of the
dividend or distribution due on such date.
Before any holder of shares of Liberty Media Group Common Stock will be
entitled to receive certificates representing shares of any kind of capital
stock or cash and/or securities or other property to be received by such
holder with respect to any conversion or redemption of shares of Liberty Media
Group Common Stock, such holder is required to surrender at such place as the
Company will specify certificates for such shares, properly endorsed or
assigned for transfer (unless the Company waives such requirement). The
Company will as soon as practicable after surrender of certificates
representing shares of Liberty Media Group Common Stock deliver to the person
for whose account such shares were so surrendered, or to the nominee or
nominees of such person, certificates representing the number of whole shares
of the kind of capital stock or cash and/or securities or other property to
which such person is entitled, together with any payment for fractional
securities referred to above. If less than all of the shares of Liberty Media
Group Common Stock represented by any one certificate are to be redeemed, the
Company will issue and deliver a new certificate for the shares of Liberty
Media Group Common Stock not redeemed. The Company will not be required to
register a transfer of (i) any shares of Liberty Media Group Common Stock for
a period of 15 Trading Days next preceding any selection of shares of Liberty
Media Group Common Stock to be redeemed or (ii) any shares of Liberty Media
Group Common Stock selected or called for redemption. Shares selected for
redemption may not thereafter be converted pursuant to the provisions
described under the caption "--Conversion at the Option of the Holder."
From and after any applicable conversion date or redemption date, all rights
of a holder of shares of Liberty Media Group Common Stock that were converted
or redeemed will cease except for the right, upon surrender of the
certificates representing shares of Liberty Media Group Common Stock, to
receive certificates representing shares of the kind and amount of capital
stock or cash and/or securities or other property for which such shares were
converted or redeemed, together with any payment for fractional securities,
and such holder will have no other or further rights in respect of the shares
of Liberty Media Group Common Stock so converted or redeemed, including, but
not limited to, any rights with respect to any cash, securities or other
property which are reserved or otherwise designated by the Company as being
held for the satisfaction of the Company's obligations to pay or deliver any
cash, securities or other property upon the conversion, exercise or exchange
of any Convertible Securities outstanding as of the date of such conversion or
redemption or any Committed Acquisition Shares which may then be issuable. No
holder of a certificate that, immediately prior to the applicable conversion
date or redemption date for the Liberty Media Group Common Stock, represented
shares of Liberty Media Group Common Stock will be entitled to receive any
dividend or other distribution with respect to shares of any kind
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of capital stock into or in exchange for which the Liberty Media Group Common
Stock was converted or redeemed until surrender of such holder's certificate
for a certificate or certificates representing shares of such kind of capital
stock. Upon such surrender, there will be paid to the holder the amount of any
dividends or other distributions (without interest) which theretofore became
payable with respect to a record date after the conversion date or redemption
date, as the case may be, but that were not paid by reason of the foregoing,
with respect to the number of whole shares of the kind of capital stock
represented by the certificate or certificates issued upon such surrender.
From and after a conversion date or redemption date, as the case may be, of
Liberty Media Group Common Stock, the Company will, however, be entitled to
treat the certificates for shares of Liberty Media Group Common Stock that
have not yet been surrendered for conversion or redemption as evidencing the
ownership of the number of whole shares of the kind or kinds of capital stock
for which the shares of Liberty Media Group Common Stock represented by such
certificates have been converted or redeemed, notwithstanding the failure to
surrender such certificates.
The Company will pay any and all documentary, stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of any
shares of capital stock and/or other securities on conversion or redemption of
shares of Liberty Media Group Common Stock. The Company will not, however, be
required to pay any tax that may be payable in respect of any transfer
involved in the issue and delivery of any shares of capital stock in a name
other than that in which the shares of Liberty Media Group Common Stock so
converted or redeemed were registered and no such issue or delivery will be
made unless and until the person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.
Provisions substantially the same as those described under this caption "--
General Conversion and Redemption Provisions," apply in the event of a
Disposition of all or substantially all of the properties and assets of the
TCI Ventures Group and a determination of the Company to pay a dividend on or
undertake a partial or complete redemption of the TCI Ventures Group Common
Stock following such Disposition, in the event of any conversion of the TCI
Ventures Group Common Stock as described under "--Conversion and Redemption--
Conversion of TCI Ventures Group Common Stock at the Option of the Company" or
"--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of
TCI Ventures Group Common Stock," and in the event of a redemption of the TCI
Ventures Group Common Stock in exchange for stock of one or more subsidiaries
as described under "--Conversion and Redemption--Redemption of TCI Ventures
Group Common Stock in Exchange for Stock of Subsidiary."
Liquidation Rights
In the event of a liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, after payment or provision for payment of
the debts and other liabilities of the Company and subject to the prior
payment in full of the preferential amounts to which any class or series of
Preferred Stock is entitled, (i) the holders of the shares of TCI Group Common
Stock will share equally, on a share for share basis, in a percentage of the
funds of the Company remaining for distribution to its common stockholders
equal to 100% multiplied by the average daily ratio (expressed as a decimal)
of W/Z for the 20-Trading Day period ending on the Trading Day prior to the
date of the public announcement of such liquidation, dissolution or winding
up, (ii) the holders of the shares of Liberty Media Group Common Stock will
share equally, on a share for share basis, in a percentage of the funds of the
Company remaining for distribution to its common stockholders equal to 100%
multiplied by the average daily ratio (expressed as a decimal) of X/Z for such
20-Trading Day period and (iii) the holders of the shares of TCI Ventures
Group Common Stock will share equally, on a share for share basis, in a
percentage of the funds of the Company remaining for distribution to its
common stockholders equal to 100% multiplied by the average daily ratio
(expressed as a decimal) of Y/Z for such 20-Trading Day period, where W is the
aggregate Market Capitalization of the Series A TCI Group Common Stock and the
Series B TCI Group Common Stock, X is the aggregate Market Capitalization of
the Series A Liberty Media Group Common Stock and the Series B Liberty Media
Group Common Stock, Y is the aggregate Market Capitalization of the Series A
TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common
Stock, and Z is the
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aggregate Market Capitalization of the Series A TCI Group Common Stock, the
Series B TCI Group Common Stock, the Series A Liberty Media Group Common
Stock, the Series B Liberty Media Group Common Stock, the Series A TCI
Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock.
Neither a consolidation, merger nor sale of assets will be construed to be a
"liquidation," "dissolution" or "winding up" of the Company.
No holder of Liberty Media Group Common Stock or TCI Ventures Group Common
Stock will have any special right to receive specific assets of the Liberty
Media Group or the TCI Ventures Group, as the case may be, in the case of any
dissolution, liquidation or winding up of the Company.
Determinations by the Board of Directors
The Charter provides that any determinations made by the Board of Directors
under any provision described under "Common Stock" will be final and binding
on all stockholders of the Company, except as may otherwise be required by
law. Such a determination would not be binding if it were established that the
determination was made in breach of a fiduciary duty of the Board of
Directors. The Company will prepare a statement of any such determination by
the Board of Directors respecting the fair market value of any properties,
assets or securities and will file such statement with the Secretary of the
Company.
Preemptive Rights
Holders of the TCI Group Common Stock, the Liberty Media Group Common Stock
and the TCI Ventures Group Common Stock do not have any preemptive rights to
subscribe for any additional shares of capital stock or other obligations
convertible into or exercisable for shares of capital stock that may hereafter
be issued by the Company.
PREFERRED STOCK
General
As of March 31, 1998, 1,620,026 shares of Class B Preferred Stock, 53,120
shares of Series C-TCI Group Preferred Stock, 70,575 shares of Series C-
Liberty Media Group Preferred Stock, 6,021 shares of Series D Preferred Stock,
278,307 shares of Series F Preferred Stock, 6,547,294 shares of Series G
Preferred Stock and 6,567,794 shares of Series H Preferred Stock were
outstanding. On April 1, 1998, all of the outstanding shares of Series D
Preferred Stock were redeemed to the extent not previously converted by the
holders thereof pursuant to the terms thereof. All of the outstanding shares
of Series F Preferred Stock and 67,536 shares of Class B Preferred Stock are
held by subsidiaries of the Company.
The following description of certain terms of the outstanding Preferred
Stock does not purport to be complete and is qualified in its entirety by
reference to the Charter (including the Certificate of Designations with
respect to each outstanding series of Series Preferred Stock).
Class B Preferred Stock
The holders of Class B Preferred Stock are entitled to receive cumulative
dividends, when and as declared by the Company's Board of Directors out of
unrestricted funds legally available therefor, in preference to dividends on
Common Stock. 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 payment of dividends. Accrued dividends are
payable annually and, in the sole discretion of the Company's Board of
Directors, may be declared and paid in cash, in shares of Series A TCI Group
Common Stock or in any combination of the foregoing. Accrued dividends not
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paid as provided above on any dividend payment date accumulate and such
accumulated unpaid dividends may be declared and paid in cash, shares of
Series A TCI Group 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 Company's 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 thereof, plus all accumulated and accrued but unpaid
dividends thereon to the date of payment.
The Class B Preferred Stock is redeemable at the option of the Company, in
whole at any time or in part from time to time, for a redemption price per
share payable in cash equal to the Stated Liquidation Value thereof, plus all
accumulated and accrued but unpaid dividends thereon to and including the
redemption date.
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
15th 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 Common Stock and ranks
junior to the Series C-TCI Group Preferred Stock, the Series C-Liberty Media
Group Preferred Stock, the Series F Preferred Stock, the Series G Preferred
Stock and the Series H Preferred Stock as to dividend rights, rights to
redemption and rights on liquidation.
The holders of Class B Preferred Stock have the right to vote, on the basis
of one vote per share, together with the Common Stock and any class or series
of Preferred Stock of the Company entitled to vote thereon, in any general
election of directors of the Company. Except as provided above or required by
the DGCL, the Class B Preferred Stock has no voting rights.
Series Preferred Stock
The Series Preferred Stock is issuable, from time to time, in one or more
series, with such powers, designations, preferences and relative
participating, optional or other rights, and qualifications, limitations or
restrictions thereof, as is stated and expressed in a resolution or
resolutions providing for the issue of each such series adopted by the TCI
Board of Directors.
All shares of any one series of the Series Preferred Stock are required to
be alike in every particular. Except to the extent otherwise provided in the
resolution or resolutions providing for the issue of any series of Series
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Preferred Stock, the holders of shares of such series will have no voting
rights except as may be required by Delaware law.
Series C-TCI Group Preferred Stock and Series C-Liberty Media Group Preferred
Stock
Series C-TCI Group Preferred Stock. The liquidation value of the Series C-
TCI Group Preferred Stock is $2,208.35 per share. The liquidation and
redemption features of the Series C-TCI Group Preferred Stock, each of which
is discussed in greater detail below, are determined by reference to such
liquidation value. No dividends are required to be paid on the Series C-TCI
Group Preferred Stock.
Upon the liquidation, dissolution or winding up of the Company, holders of
the Series C-TCI Group 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-TCI Group
Preferred Stock. The Series C-TCI Group Preferred Stock shall not rank junior
to any other classes or series of stock of the Company in respect of the right
to participate in any distribution upon liquidation, dissolution or winding up
of the Company.
The Series C-TCI Group Preferred Stock is subject to optional redemption by
the Company at any time after August 8, 2001, in whole or in part, at a
redemption price, per share, equal to the liquidation value per share of the
Series C-TCI Group Preferred Stock. The Series C-TCI Group 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 liquidation value. In
the case of a redemption of shares of Series C-TCI Group Preferred Stock at
the option of the holder, the Company may elect to pay the redemption price in
cash or through the issuance of shares of Series A TCI Group Common Stock. In
the event that the Company elects to issue shares of Series A TCI Group Common
Stock in payment of the redemption price and, as of the redemption date, Bill
Daniels, the original holder of all outstanding shares of Series C-TCI Group
Preferred Stock, is deceased and the shares required to be redeemed are held
by or for the benefit of a trust, regardless of whether such trust became
effective during Mr. Daniel's lifetime or is a testamentary trust, or a public
or private foundation established by Mr. Daniels, the, net proceeds from any
open-market sale (within a period of time set forth in the certificate of
designations for the Series C-TCI Group Preferred Stock) of the shares of
Series A TCI Group Common Stock acquired by such holder in the redemption (and
in certain circumstances, other shares of Series A TCI Group Common Stock)
shall be adjusted, such that any net proceeds in excess of the redemption
price shall be paid by the holder to the Company and any deficit between the
net proceeds and the redemption price shall be paid by the Company to the
holder.
The Series C-TCI Group Preferred Stock ranks senior to the Common Stock and
the Class B Preferred Stock and on a parity with all other currently
outstanding classes and series of Preferred Stock as to rights to receive
assets upon liquidation, dissolution or winding up of the affairs of the
Company.
As of March 31, 1998, subject to anti-dilution adjustments, each share of
Series C-TCI Group Preferred Stock is currently convertible, at the option of
the holder, into 132.86 shares of Series A TCI Group Common Stock. Subject to
the provisions described in the immediately following paragraph, if the
holders of Series C-TCI Group Preferred Stock would be entitled to receive
upon conversion thereof any of the Company's capital stock that is redeemable
or exchangeable at the election of the Company ("Series C-TCI Group Redeemable
Capital Stock"), and all of the outstanding shares or other units of such
Series C-TCI Group Redeemable Capital Stock are redeemed, exchanged or
otherwise acquired in full, then, from and after such event (a "Series C-TCI
Group Redemption Event"), the holders of Series C-TCI Group Preferred Stock
then outstanding shall be entitled to receive upon conversion of such shares,
in lieu of shares of such Series C-TCI Group Redeemable Capital Stock, the
kind and amount of shares of stock and other securities and property
receivable upon such Series C-TCI Group Redemption Event by a holder of the
number of shares or units of Series C-TCI Group Redeemable Capital Stock into
which such shares of Series C-TCI Group Preferred Stock could have been
converted immediately prior to the effectiveness of such Series C-TCI Group
Redemption Event (assuming that such holder
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failed to exercise any applicable right of election with respect thereto and
received per share or unit of such Series C-TCI Group Redeemable Capital Stock
the kind and amount of stock and other securities and property received per
share or unit by the holders of a plurality of the non-electing shares or
units thereof) and, thereafter, the holders of the Series C-TCI Group
Preferred Stock shall have no other conversion rights with respect to such
Series C-TCI Group Redeemable Capital Stock.
Notwithstanding the foregoing, the provisions described in the immediately
preceding paragraph shall not apply, and the holders of Series C-TCI Group
Preferred Stock that are not exchanged as described in the third sentence of
this paragraph shall not have conversion rights with respect to Series C-TCI
Group Redeemable Capital Stock so redeemed, exchanged or otherwise acquired
after the Series C-TCI Group Redemption Event relating thereto, if (i) the
redemption price for the shares of such Series C-TCI Group Redeemable Capital
Stock is paid in whole or in part in stock ("Series C-TCI Group Redemption
Securities") of a subsidiary of the Company and (ii) in connection with such
Series C-TCI Group Redemption Event, the "Mirror Preferred Stock Condition" is
met, as such term is defined in the certificate of designations for the Series
C-TCI Group Preferred Stock. The Company is obligated to use all commercially
reasonable efforts to ensure that the Mirror Preferred Stock Condition is
satisfied. Generally, the Mirror Preferred Stock Condition will be satisfied
if the Company makes appropriate provisions so that holders of Series C-TCI
Group Preferred Stock shall have the right, exercisable on the effective date
of the Series C-TCI Group Redemption Event, to exchange their shares of Series
C-TCI Group Preferred Stock for convertible preferred stock of the Company and
convertible preferred stock of the issuer of the Series C-TCI Group Redemption
Securities that together have an aggregate liquidation preference equal to the
aggregate liquidation preference of the Series C-TCI Group Preferred Stock to
be so exchanged (as in effect on the effective date of the Series C-TCI Group
Redemption Event) and that otherwise each have terms, conditions,
designations, voting powers, rights on liquidation and other preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions applicable to such convertible preferred stock
that are identical, or as nearly so as is practicable in the judgment of the
Company's Board of Directors, to those of the Series C-TCI Group Preferred
Stock for which such convertible preferred stock is to be exchanged, except
that applicable time periods under the Series C-TCI Group Preferred Stock will
be tacked to corresponding time periods under such convertible preferred
stock, and except that (x) the convertible preferred stock of the issuer of
the Series C-TCI Group Redemption Securities will be convertible into the kind
and amount of Series C-TCI Group Redemption Securities, cash and other assets
that the holder of a share of Series C-TCI Group Preferred Stock in respect of
which such convertible preferred stock is issued would have received in the
Series C-TCI Group Redemption Event, had such shares of Series C-TCI Group
Preferred Stock been converted prior to the Series C-TCI Group Redemption
Event, and (y) the convertible preferred stock of the Company will not be
convertible into, and the holders thereof will have no conversion rights
thereunder with respect to, the Series C-TCI Group Redeemable Capital Stock
redeemed, or the Series C-TCI Group Redemption Securities issued, in the
Series C-TCI Group Redemption Event.
If the Company distributes the stock of a subsidiary of the Company as a
dividend to all holders of Series A TCI Group Common Stock (a "TCI Group Spin
Off"), the Company shall make appropriate provision so the holders of the
Series C-TCI Group Preferred Stock have the right to exchange their shares of
Series C-TCI Group Preferred Stock on the effective date of the TCI Group Spin
Off for convertible preferred stock of the Company and convertible preferred
stock of such subsidiary that together have an aggregate liquidation
preference equal to the liquidation preference of a share of Series C-TCI
Group Preferred Stock on the effective date of the TCI Group Spin Off and that
otherwise each have terms, conditions, designations, voting powers, rights on
liquidation and other preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
applicable to such convertible preferred stock that are identical, or as
nearly so as is practicable in the judgment of the Company's Board of
Directors, to those of the Series C-TCI Group Preferred Stock for which such
convertible preferred stock is to be exchanged, except that applicable time
periods under the Series C-TCI Group Preferred Stock will be tacked to
corresponding time periods under such convertible preferred stock, and except
that (x) the convertible preferred stock of the subsidiary whose stock is
distributed in such TCI Group Spin Off will be convertible into the kind and
amount of stock of such subsidiary, and other securities and property that the
holder of a share of Series C-TCI Group Preferred Stock in respect of which
such convertible
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preferred stock is issued would have received in the TCI Group Spin Off, had
such shares of Series C-TCI Group Preferred Stock been converted prior to the
record date for such TCI Group Spin Off, and (y) the convertible preferred
stock of the Company will not be convertible into, and the holders thereof
will have no conversion rights thereunder with respect to, the stock of such
subsidiary. From and after the effective date of the TCI Group Spin Off,
holders of any shares of Series C-TCI Group Preferred Stock that have not been
exchanged for convertible preferred stock of the Company and convertible
preferred stock of such subsidiary shall have no conversion rights with
respect to the stock of the subsidiary distributed in the TCI Group Spin Off.
In the event an Exchange Offer is made by the Company or a subsidiary of the
Company (the applicable of the foregoing being the "Series C-TCI Group
Offeror"), the Series C-TCI Group Offeror shall concurrently therewith make an
equivalent offer to the holders of Series C-TCI Group Preferred Stock pursuant
to which such holders may tender shares of Series C-TCI Group Preferred Stock,
based upon the number of shares of Series A TCI Group Common Stock into which
such tendered shares are then convertible (and in lieu of tendering
outstanding shares of Series A TCI Group Common Stock), together with such
other consideration as may be required to be tendered pursuant to such
Exchange Offer, and receive in exchange therefor, in lieu of securities of the
Series C-TCI Group Offeror offered in such Exchange Offer ("Exchange
Securities") (and other property, if applicable), convertible preferred stock
of the issuer of the Exchange Securities with an aggregate liquidation
preference equal to the aggregate liquidation preference of the shares of
Series C-TCI Group Preferred Stock exchanged therefor and that otherwise has
terms, conditions, designations, voting powers, rights on liquidation and
other preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions applicable to such
convertible preferred stock that are identical, or as nearly so as is
practicable in the judgment of the Company's Board of Directors, to those of
the Series C-TCI Group Preferred Stock for which such convertible preferred
stock is to be exchanged, except that applicable time periods under the Series
C-TCI Group Preferred Stock will be tacked to corresponding time periods under
such convertible preferred stock, and except that such convertible preferred
stock will be convertible into the kind and amount of Exchange Securities aand
other property that the holder of a share of Series C-TCI Group Preferred
Stock in respect of which such convertible preferred stock is issued would
have received upon the consummation of the Exchange Offer, had such shares of
Series C-TCI Group Preferred Stock that such holder elects to tender been
converted and the shares of Series A TCI Group Common Stock received upon such
conversion been tendered in full pursuant to such Exchange Offer and the same
percentage of such tendered shares had been accepted for exchange as the
percentage of validly tendered shares of Series A TCI Group Common Stock were
accepted for exchange pursuant to such Exchange Offer. Whether or not a holder
of shares of Series C-TCI Group Preferred Stock elects to accept such offer
and tender such shares, no adjustment to the conversion rate will be made in
connection with the Exchange Offer. For the purposes of the foregoing,
"Exchange Offer" means an issuer tender offer (within the meaning of Rule 13e-
4(a)(2) under the Exchange Act), including, without limitation, one that is
effected through the distribution of rights or warrants, made to holders of
Series A TCI Group Common Stock (or to holders of other stock of the Company
receivable by a holder of Series C-TCI Group Preferred Stock upon conversion
thereof), to issue stock of the Company or of a subsidiary of the Company
and/or other property to a tendering stockholder in exchange for shares of
Series A TCI Group Common Stock (or such other stock).
The holders of Series C-TCI Group Preferred Stock are entitled to vote on an
as converted basis on all matters submitted to a vote of holders of the
capital stock of the Company entitled to vote generally on the election of
directors. Holders of Series C-TCI Group Preferred Stock are not entitled to
vote as a separate class except as otherwise may be required by the DGCL.
Series C-Liberty Media Group Preferred Stock
The liquidation value of the Series C-Liberty Media Group Preferred Stock is
$579.31 per share. The liquidation and redemption features of the Series C-
Liberty Media Group Preferred Stock, each of which is discussed in greater
detail below, are determined by reference to such liquidation value. No
dividends are required to be paid on the Series C-Liberty Media Group
Preferred Stock.
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Upon the liquidation, dissolution or winding up of the Company, holders of
the Series C-Liberty Media Group 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-
Liberty Media Group Preferred Stock. The Series C-Liberty Media Group
Preferred Stock shall not rank junior to any other classes or series of stock
of the Company in respect of the right to participate in any distribution upon
liquidation, dissolution or winding up of the Company.
The Series C-Liberty Media Group Preferred Stock is subject to optional
redemption by the Company at any time after August 8, 2001, in whole or in
part, at a redemption price, per share, equal to the liquidation value per
share of the Series C-Liberty Media Group Preferred Stock. The Series C-
Liberty Media Group 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 liquidation value. In the case of a redemption of shares
of Series C-Liberty Media Group Preferred Stock at the option of the holder,
the Company may elect to pay the redemption price in cash or through the
issuance of shares of Series A Liberty Media Group Common Stock. In the event
that the Company elects to issue shares of Series A Liberty Media Group Common
Stock in payment of the redemption price and, as of the redemption date, Bill
Daniels, the original holder of all outstanding shares of Series C-Liberty
Media Group Preferred Stock, is deceased and the shares required to be
redeemed are held by or for the benefit of a trust, regardless of whether such
trust became effective during Mr. Daniel's lifetime or is a testamentary
trust, or a public or private foundation established by Mr. Daniels, the net
proceeds from any open-market sale (within a period of time set forth in the
certificate of designations for the Series C-Liberty Media Group Preferred
Stock) of the shares of Series A Liberty Media Group Common Stock acquired by
such holder in the redemption (and in certain circumstances, other shares of
Series A Liberty Media Group Common Stock) shall be adjusted, such that any
net proceeds in excess of the redemption price shall be paid by the holder to
the Company and any deficit between the net proceeds and the redemption price
shall be paid by the Company to the holder.
The Series C-Liberty Media Group Preferred Stock ranks senior to the Common
Stock and the Class B Preferred Stock and on a parity with all other currently
outstanding classes and series of Preferred Stock as to rights to receive
assets upon liquidation, dissolution or winding up of the affairs of the
Company.
As of March 31, 1998, subject to anti-dilution adjustments, each share of
Series C-Liberty Media Group Preferred Stock is currently convertible, at the
option of the holder, into (i) 37.5 shares of Series A Liberty Media Group
Common Stock and (ii) upon conversion of shares of Series C-Liberty Media
Group Preferred Stock each holder of Series C-Liberty Media Group Preferred
Stock is entitled to receive one additional share of Series A Liberty Media
Group Common Stock for every two such shares issued upon such conversion.
Subject to the provisions described in the immediately following paragraph, if
(i) the Company redeems all the outstanding shares of Series A Liberty Media
Group Common Stock in accordance with the terms thereof, or (ii) the holders
of Series C-Liberty Media Group Preferred Stock would be entitled to receive
upon conversion thereof any the Company capital stock that is redeemable or
exchangeable at the election of the Company ("Series C-Liberty Media Group
Redeemable Capital Stock"), and all of the outstanding shares or other units
of such Series C-Liberty Media Group Redeemable Capital Stock are redeemed,
exchanged or otherwise acquired in full, then, from and after either such
event (each event referred to in clause (i) and (ii) being a "Series C-Liberty
Media Group Redemption Event"), the holders of Series C-Liberty Media Group
Preferred Stock then outstanding shall be entitled to receive upon conversion
of such shares of Series C-Liberty Media Group Preferred Stock, in lieu of
shares of Series A Liberty Media Group Common Stock or such Series C-Liberty
Media Group Redeemable Capital Stock, as the case may be, the kind and amount
of shares of stock and other securities and property receivable upon such
Series C-Liberty Media Group Redemption Event by a holder of the number of
shares of Series A Liberty Media Group Common Stock or shares or units of such
Series C-Liberty Media Group Redeemable Capital Stock, as the case may be,
into which such shares of Series C-Liberty Media Group Preferred Stock could
have been converted immediately prior to the effectiveness of such Series C-
Liberty
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Media Group Redemption Event (assuming that such holder failed to exercise any
applicable right of election with respect thereto and received per share of
Series A Liberty Media Group Common Stock or per share or unit of such Series
C-Liberty Media Group Redeemable Capital Stock, as the case may be, the kind
and amount of stock and other securities and property received per share or
unit by the holders of a plurality of the non-electing shares or units
thereof) and, thereafter, the holders of the Series C-Liberty Media Group
Preferred Stock shall have no other conversion rights with respect to the
Series A Liberty Media Group Common Stock or such Series C-Liberty Media Group
Redeemable Capital Stock, as the case may be.
Notwithstanding the foregoing, the provisions described in the immediately
preceding paragraph shall not apply, and the holders of Series C-Liberty Media
Group Preferred Stock that are not exchanged as described in the third
sentence of this paragraph shall not have conversion rights with respect to
Series A Liberty Media Group Common Stock or Series C-Liberty Media Group
Redeemable Capital Stock so redeemed, exchanged or otherwise acquired, after
the Series C-Liberty Media Group Redemption Event relating thereto, if (i) the
redemption price for the shares of Series A Liberty Media Group Common Stock
or such Series C-Liberty Media Group Redeemable Capital Stock, as the case may
be, is paid in whole or in part in securities ("Series C-Liberty Media Group
Redemption Securities") of a subsidiary of the Company and (ii) in connection
with such Series C-Liberty Media Group Redemption Event, the "Mirror Preferred
Stock Condition" is met, as such term is defined in the certificate of
designations for the Series C-Liberty Media Group Preferred Stock. The Company
is obligated to use all commercially reasonable efforts to ensure that the
Mirror Preferred Stock Condition is satisfied. Generally, the Mirror Preferred
Stock Condition will be satisfied in connection with a redemption of the
Series A Liberty Media Group Common Stock or the Series C-Liberty Media Group
Redeemable Capital Stock into which the Series C-Liberty Media Group Preferred
Stock is then convertible, assuming that the Series C-Liberty Media Group
Preferred Stock is not then convertible into any other shares of stock or
other securities or property, if appropriate provision is made so that the
holders of the Series C-Liberty Media Group Preferred Stock have the right to
exchange their shares of Series C-Liberty Media Group Preferred Stock on the
effective date of the Series C-Liberty Media Group Redemption Event for shares
of convertible preferred stock of the issuer of the Series C-Liberty Media
Group Redemption Securities, which convertible preferred stock shall have an
aggregate liquidation preference equal to the aggregate liquidation preference
of the shares of Series C-Liberty Media Group Preferred Stock to be exchanged
therefor and that otherwise has terms, conditions, designations, voting
powers, rights on liquidation and other preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions applicable to such convertible preferred stock
that are identical, or as nearly so as is practicable in the judgment of the
Company's Board of Directors, to those of the Series C-Liberty Media Group
Preferred Stock for which such convertible preferred stock is to be exchanged,
except that applicable time periods under the Series C-Liberty Media Group
Preferred Stock will be tacked to corresponding time periods under such
convertible preferred stock, and except that the convertible preferred stock
of the issuer of the Series C-Liberty Media Group Redemption Securities will
be convertible into the kind and amount of Series C-Liberty Media Group
Redemption Securities, cash and other assets that the holder of a share of
Series C-Liberty Media Group Preferred Stock in respect of which such
convertible preferred stock is issued would have received in the Series C-
Liberty Media Group Redemption Event, had such shares of Series C-Liberty
Media Group Preferred Stock been converted prior to the Series C-Liberty Media
Group Redemption Event.
If, before giving effect to a Series C-Liberty Media Group Redemption Event,
a holder of Series C-Liberty Media Group Preferred Stock would be entitled to
receive upon conversion of such Series C-Liberty Media Group Preferred Stock
any shares of stock or other securities or property (other than cash in lieu
of fractional securities) in addition to the Series A Liberty Media Group
Common Stock or Series C-Liberty Media Group Redeemable Capital Stock being
redeemed, and the redemption price payable upon such Series C-Liberty Media
Group Redemption Event will include Series C-Liberty Media Group Redemption
Securities, then the Mirror Preferred Stock Condition will be satisfied if
appropriate provision is made so that the holders of the Series C-Liberty
Media Group Preferred Stock have the right to exchange their shares of Series
C-Liberty Media Group Preferred Stock on the effective date of the Series C-
Liberty Media Group Redemption Event for convertible preferred stock of the
Company and convertible preferred stock of the issuer of the Series C-Liberty
Media
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Group Redemption Securities. The sum of the initial liquidation preferences of
the shares of convertible preferred stock of the Company and convertible
preferred stock of the issuer of the Series C-Liberty Media Group Redemption
Securities delivered in exchange for a share of Series C-Liberty Media Group
Preferred Stock will equal the liquidation preference of a share of Series C-
Liberty Media Group Preferred Stock on the effective date of the Series C-
Liberty Media Group Redemption Event and that otherwise each have terms,
conditions, designations, voting powers, rights on liquidation and other
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions applicable to such convertible
preferred stock that are identical, or as nearly so as is practicable in the
judgment of the Company's Board of Directors, to those of the Series C-Liberty
Media Group Preferred Stock for which such convertible preferred stock is to
be exchanged, except that applicable time periods under the Series C-Liberty
Media Group Preferred Stock will be tacked to corresponding time periods under
such convertible preferred stock, and except that (x) the convertible
preferred stock of the issuer of the Series C-Liberty Media Group Redemption
Securities will be convertible into the kind and amount of Series C-Liberty
Media Group Redemption Securities, cash and other assets that the holder of a
share of Series C-Liberty Media Group Preferred Stock in respect of which such
convertible preferred stock is issued would have received in the Series C-
Liberty Media Group Redemption Event, had such shares of Series C-Liberty
Media Group Preferred Stock been converted prior to the Series C-Liberty Media
Group Redemption Event, and (y) the convertible preferred stock of the Company
will not be convertible into, and the holders thereof will have no conversion
rights thereunder with respect to the Series C-Liberty Media Group Redeemable
Capital Stock redeemed, or the Series C-Liberty Media Group Redemption
Securities issued, in the Series C-Liberty Media Group Redemption Event.
If the Company distributes the stock of a subsidiary of the Company as a
dividend to all holders of Series A Liberty Media Group Common Stock (a
"Liberty Media Group Spin Off"), the Company shall make appropriate provision
so the holders of the Series C-Liberty Media Group Preferred Stock have the
right to exchange their shares of Series C-Liberty Media Group Preferred Stock
on the effective date of the Liberty Media Group Spin Off for convertible
preferred stock of the Company and convertible preferred stock of such
subsidiary that together have an aggregate liquidation preference equal to the
liquidation preference of a share of Series C-Liberty Media Group Preferred
Stock on the effective date of the Liberty Media Group Spin Off and that
otherwise each have terms, conditions, designations, voting powers, rights on
liquidation and other preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
applicable to such convertible preferred stock that are identical, or as
nearly so as is practicable in the judgment of the Company's Board of
Directors, to those of the Series C-Liberty Media Group Preferred Stock for
which such convertible preferred stock is to be exchanged, except that
applicable time periods under the Series C-Liberty Media Group Preferred Stock
will be tacked to corresponding time periods under such convertible preferred
stock, and except that (x) the convertible preferred stock of the subsidiary
whose stock is distributed in such Liberty Media Group Spin Off will be
convertible into the kind and amount of stock of such subsidiary, and other
securities and property that the holder of a share of Series C-Liberty Media
Group Preferred Stock in respect of which such convertible preferred stock is
issued would have received in the Liberty Media Group Spin Off, had such
shares of Series C-Liberty Media Group Preferred Stock been converted prior to
the record date for such Liberty Media Group Spin Off, and (y) the convertible
preferred stock of the Company will not be convertible into, and the holders
thereof will have no conversion rights thereunder with respect to the stock of
such subsidiary. From and after the effective date of the Liberty Media Group
Spin Off, holders of any shares of Series C-Liberty Media Group Preferred
Stock that have not been exchanged for convertible preferred stock of the
Company and convertible preferred stock of such subsidiary shall have no
conversion rights with respect to the stock of the subsidiary distributed in
the Liberty Media Group Spin Off.
In the event an "Exchange Offer" is made by the Company or a subsidiary of
the Company (the applicable of the foregoing being the "Series C-Liberty Media
Group Offeror"), the Series C-Liberty Media Group Offeror shall concurrently
therewith make an equivalent offer to the holders of Series C-Liberty Media
Group Preferred Stock pursuant to which such holders may tender shares of
Series C-Liberty Media Group Preferred Stock, based upon the number of shares
of Series A Liberty Media Group Common Stock into which such tendered shares
are then convertible (and in lieu of tendering outstanding shares of Series A
Liberty Media Group Common
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Stock), together with such other consideration as may be required to be
tendered pursuant to such Exchange Offer, and receive in exchange therefor, in
lieu of securities of the Series C-Liberty Media Group Offeror offered in such
Exchange Offer ("Liberty Media Group Exchange Securities") (and other
property, if applicable), convertible preferred stock of the issuer of such
Liberty Media Group Exchange Securities with an aggregate liquidation
preference equal to the aggregate liquidation preference of the shares of
Series C-Liberty Media Group Preferred Stock exchanged therefor and that
otherwise has terms, conditions, designations, voting powers, rights on
liquidation and other preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
applicable to such convertible preferred stock that are identical, or as
nearly so as is practicable in the judgment of the Company's Board of
Directors, to those of the Series C-Liberty Media Group Preferred Stock for
which such convertible preferred stock is to be exchanged, except that
applicable time periods under the Series C-Liberty Media Group Preferred Stock
will be tacked to corresponding time periods under such convertible preferred
stock, and except that such convertible preferred stock will be convertible
into the kind and amount of Exchange Securities and other property that the
holder of a share of Series C-Liberty Media Group Preferred Stock in respect
of which such convertible preferred stock is issued would have received upon
the consummation of the Exchange Offer, had such shares of Series C-Liberty
Media Group Preferred Stock that such holder elects to tender been converted
and the shares of Series A Liberty Media Group Common Stock received upon such
conversion been tendered in full pursuant to such Exchange Offer and the same
percentage of such tendered shares had been accepted for exchange as the
percentage of validly tendered shares of Series A Liberty Media Group Common
Stock were accepted for exchange pursuant to such Exchange Offer. Whether or
not a holder of shares of Series C-Liberty Media Group Preferred Stock elects
to accept such offer and tender such shares, no adjustment to the conversion
rate will be made in connection with the Exchange Offer. For the purposes of
the foregoing, "Exchange Offer" means an issuer tender offer (within the
meaning of Rule 13e-4(a)(2) under the Exchange Act), including, without
limitation, one that is effected through the distribution of rights or
warrants, made to holders of Series A Liberty Media Group Common Stock (or to
holders of other stock of the Company receivable by a holder of Series C-
Liberty Media Group Preferred Stock upon conversion thereof), to issue stock
of the Company or of a subsidiary of the Company and/or other property to a
tendering stockholder in exchange for shares of Series A Liberty Media Group
Common Stock (or such other stock).
The holders of Series C-Liberty Media Group Preferred Stock are entitled to
vote on an as converted basis on all matters submitted to a vote of holders of
the capital stock of the Company entitled to vote generally on the election of
directors. Holders of Series C-Liberty Media Group Preferred Stock are not
entitled to vote as a separate class except as otherwise may be required by
the DGCL.
Series D Preferred Stock
The Company will not issue any additional shares of Series D Preferred Stock
and will remove any remaining shares of Series Preferred Stock designated as
Series D Preferred Stock from such designation as soon as practicable.
Series F Preferred Stock
The holders of the Series F Preferred Stock are entitled to participate, on
an as-converted basis, with the holders of the Series A TCI Group Common
Stock, with respect to any cash dividends or distributions declared and paid
on the Series A TCI Group Common Stock. Dividends or distributions on the
Series A TCI Group Common Stock which are not paid in cash would result in
adjustment of the rate at which the Series F Preferred Stock is convertible
into Series A TCI Group Common Stock.
Upon the liquidation, dissolution or winding up of the Company, holders of
Series F 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 $.01. After receipt of
their liquidation preference and subject to the preferential rights of any
other class or series of Preferred Stock, the holders of Series F
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Preferred Stock are entitled to receive from the assets of the Company
available for distribution to common stockholders an amount equal to the
amount to be distributed per share of Series A TCI Group Common Stock in such
liquidation, dissolution or winding up multiplied by the number of shares of
Series A TCI Group Common Stock into which a share of Series F Preferred Stock
is then convertible.
The Series F Preferred Stock is subject to optional redemption by the
Company at any time after the 30th business day following issuance, in whole
or in part, at a redemption price, per share, equal to $24,875 (as adjusted in
respect of stock splits, reverse splits and other events affecting the shares
of Series F Preferred Stock), plus any dividends which have been declared but
are unpaid as of the date fixed for such redemption. The Company will pay the
redemption price (or designated portion thereof) of the shares of Series F
Preferred Stock called for redemption by issuing to the holder thereof, in
respect of its shares to be redeemed a number of shares of Series A TCI Group
Common Stock equal to the aggregate redemption price (or designated portion
thereof) of the shares to be redeemed divided by the average market price of
the Series A TCI Group Common Stock for a period specified, and subject to the
adjustments described, in the certificate of designations establishing the
Series F Preferred Stock.
The Series F Preferred Stock ranks senior to the Common Stock and the Class
B Preferred Stock, and ranks on a parity basis with all other currently
outstanding classes and series of Preferred Stock as to dividend rights,
rights to redemption and rights on liquidation.
Shares of Series F Preferred Stock are currently convertible, at the option
of the holder, into Series A TCI Group Common Stock at a rate of 1,496.65
shares of Series A TCI Group Common Stock for each share of Series F Preferred
Stock, subject to anti-dilution adjustments. In addition, any shares of Series
F Preferred Stock which cease to be held by the Company or a subsidiary of the
Company will automatically be converted into shares of Series A TCI Group
Common Stock.
The holders of Series F Preferred Stock have the right to vote, on the basis
of one vote per share, together with the Common Stock and any class or series
of Preferred Stock entitled to vote thereon, in any general election of
directors of the Company. Except as provided above or required by the DGCL,
the Series F Preferred Stock has no voting rights.
Series G Preferred Stock
The dividend, liquidation and redemption features of the Series G Preferred
Stock, each of which is discussed below, are determined by reference to the
liquidation preference of the Series G Preferred Stock, which as of any date
of determination is equal, on a per share basis, to the sum of (i) $21.60,
plus (ii) an amount equal to all dividends accrued on such share which have
been added to and remain a part of the liquidation preference as of such date,
plus (iii) for purposes of determining liquidation and redemption payments, an
amount equal to all unpaid dividends accrued on the sum of the amounts
specified in clauses (i) and (ii) above during the period from the immediately
preceding dividend payment date through and including the date in question.
The holders of Series G Preferred Stock are entitled to receive cumulative
dividends, when and as declared by the Company's Board of Directors out of
unrestricted funds legally available therefor, in preference to dividends on
the Common Stock and the Class B Preferred Stock. Dividends accrue on the
Series G Preferred Stock from and after January 25, 1997, on a daily basis at
the rate of 4% per annum of the liquidation preference per share, whether or
not such dividends are declared or funds are available for payment of
dividends. Dividends not paid on any dividend payment date are added to the
liquidation preference on such date and remain a part thereof until such
dividends are paid. The rate per annum at which dividends will accrue on that
portion of the liquidation preference that consists of unpaid dividends that
were added to the liquidation preference on a dividend payment date and that
remain unpaid on the next succeeding dividend payment date will increase to
8.625% per annum from and after such next succeeding dividend payment date.
Accrued dividends are payable semiannually and, in the sole discretion of the
Company's Board of Directors, may be declared and paid in cash, in shares of
Series A TCI Group Common Stock or in any combination of the foregoing.
Accrued dividends not
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paid as provided above on any dividend payment date accumulate and such
accumulated unpaid dividends may be declared and paid in cash, shares of
Series A TCI Group Common Stock or any combination thereof at any time without
reference to any regular dividend payment, to holders of record of Series G
Preferred Stock as of a special record date fixed by the Company's Board of
Directors.
Upon the liquidation, dissolution or winding up of the Company, the holders
of Series G Preferred Stock will be entitled, after payment of preferential
amounts on any class or series of Preferred Stock ranking prior to the Series
G 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
liquidation preference thereof as of the date of payment or distribution.
The Series G Preferred Stock is redeemable at the option of the Company, in
whole at any time or in part from time to time on or after February 1, 2001
for a redemption price per share payable in cash equal to the liquidation
preference thereof on such redemption date. The Company is required to redeem
the Series G Preferred Stock out of funds legally available therefor on
February 1, 2016, for a redemption price per share payable in cash equal to
the liquidation preference thereof on such redemption date.
The Series G Preferred Stock ranks senior to the Common Stock and the Class
B Preferred Stock and on a parity with all other currently outstanding classes
and series of Preferred Stock as to dividend rights, rights to redemption and
rights on liquidation.
As of March 31, 1998, subject to anti-dilution adjustments, each share of
Series G Preferred Stock is convertible, at the option of the holder, into
1.190 shares of Series A TCI Group Common Stock. Subject to the provisions
described in the immediately following paragraph, if the holders of Series G
Preferred Stock would be entitled to receive upon conversion thereof any
shares of a class or series of the Company's capital stock, which is
redeemable or exchangeable at the election of the Company ("Series G
Redeemable Capital Stock"), and such Series G Redeemable Capital Stock is
redeemed, exchanged or otherwise acquired in full, then, from and after such
event (a "Series G Redemption Event"), the holders of Series G Preferred Stock
then outstanding shall be entitled to receive upon conversion of such shares,
in lieu of shares of such Series G Redeemable Capital Stock, the kind and
amount of securities, cash or other assets receivable upon such Series G
Redemption Event by a holder of the number of shares of Series G Redeemable
Capital Stock into which such shares of Series G Preferred Stock could have
been converted immediately prior to the effectiveness of such Series G
Redemption Event (assuming that such holder failed to exercise any applicable
right of election with respect thereto and received per share of such Series G
Redeemable Capital Stock the kind and amount of securities, cash or other
assets received per share by the holders of a plurality of the non-electing
shares thereof) and, thereafter, the holders of the Series G Preferred Stock
shall have no other conversion rights with respect to such Series G Redeemable
Capital Stock.
Notwithstanding the foregoing, the provisions described in the immediately
preceding paragraph shall not apply, and the holders of any shares of Series G
Preferred Stock that are not exchanged as described in the second sentence of
this paragraph shall not have any conversion rights with respect to Series G
Redeemable Capital Stock so redeemed, exchanged or otherwise acquired, after
the Series G Redemption Event relating thereto, if (i) the redemption price
for the shares of such Series G Redeemable Capital Stock is paid in whole or
in part in securities ("Series G Redemption Securities") of an issuer other
than the Company (the "Series G Other Issuer") and (ii) in connection with
such Series G Redemption Event, the "Mirror Preferred Stock Condition" is met,
as such term is defined in the certificate of designations for the Series G
Preferred Stock. Generally, the Mirror Preferred Stock Condition shall be
satisfied if the Company makes appropriate provisions so that holders of
Series G Preferred Stock shall have the right, exercisable on the effective
date of the Series G Redemption Event, to exchange their shares of Series G
Preferred Stock for convertible preferred stock of the Company and convertible
preferred stock of the Series G Other Issuer that together have an aggregate
liquidation preference equal to the liquidation preference of the Series G
Preferred Stock to be so exchanged (as in effect on the effective date of the
Series G Redemption Event) and that otherwise each have terms, conditions,
designations, dividend rights, voting powers, rights on liquidation and other
preferences and relative, participating, optional or
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other special rights, and qualifications, limitations or restrictions
applicable to such convertible preferred stock that are identical, or as
nearly so as is practicable in the good faith judgment of the Company's Board
of Directors, to those of the Series G Preferred Stock for which such
convertible preferred stock is to be exchanged, except that applicable time
periods under the Series G Preferred Stock will be tacked to corresponding
time periods under such convertible preferred stock, and except that (x) the
convertible preferred stock of the Series G Other Issuer will be convertible
into the kind and amount of Series G Redemption Securities, cash and other
assets that the holder of a share of Series G Preferred Stock in respect of
which such convertible preferred stock is issued would have received in the
Series G Redemption Event, had such shares of Series G Preferred Stock been
converted prior to the Series G Redemption Event, and (y) the convertible
preferred stock of the Company will not be convertible into, and the holders
thereof will have no conversion rights thereunder with respect to, the Series
G Redeemable Capital Stock subject to the Series G Redemption Event. The
Mirror Preferred Stock Condition shall be deemed to have been satisfied in
connection with any Series G Redemption Event only if the Company's Board of
Directors determines (i) that receipt of such convertible preferred stock of
the Company and/or the Series G Other Issuer in exchange for the Series G
Preferred Stock in connection with such Series G Redemption Event would not
result in the recognition of gain or loss by the holders of such Series G
Preferred Stock for United States federal income tax purposes; (ii) that an
adjustment made in the conversion rate of the Series G Preferred Stock with
respect to such Series G Redemption Event, as described in the immediately
preceding paragraph, would result in the recognition of gain or loss by the
holders of Series G Preferred Stock for United States federal income tax
purposes; or (iii) that receipt of Series G Redemption Securities in
redemption of the Series G Redeemable Capital Stock to be redeemed in such
Series G Redemption Event would result in the recognition of gain or loss by
the holders of such Series G Redeemable Capital Stock.
The holders of Series G Preferred Stock have the right to vote, on the basis
of one vote per share, together with the Common Stock, the Class B Preferred
Stock and any other class or series of Preferred Stock entitled to vote
thereon, in any general election of directors of the Company. The number of
authorized shares of Series G Preferred Stock may be increased or decreased
(but not below the number of shares of Series G Preferred Stock then
outstanding) by the affirmative vote of the holders of at least 66 2/3% of the
then outstanding Voting Securities (as defined in the Charter) voting together
as a single class. Except as provided above or required by the DGCL, the
Series G Preferred Stock has no voting rights.
Series H Preferred Stock
The dividend, liquidation and redemption features of the Series H Preferred
Stock, each of which is discussed below, are determined by reference to the
liquidation preference of the Series H Preferred Stock, which as of any date
of determination is equal, on a per share basis, to the sum of (i) $5.40, plus
(ii) an amount equal to all dividends accrued on such share which have been
added to and remain a part of the liquidation preference as of such date, plus
(iii) for purposes of determining liquidation and redemption payments, an
amount equal to all unpaid dividends accrued on the sum of the amounts
specified in clauses (i) and (ii) above during the period from the immediately
preceding dividend payment date through and including the date in question.
The holders of Series H Preferred Stock are entitled to receive cumulative
dividends, when and as declared by the Company's Board of Directors out of
unrestricted funds legally available therefor, in preference to dividends on
the Common Stock and the Class B Preferred Stock. Dividends accrue on the
Series H Preferred Stock from and after January 25, 1997, on a daily basis at
the rate of 4% per annum of the liquidation preference per share, whether or
not such dividends are declared or funds are available for payment of
dividends. Dividends not paid on any dividend payment date are added to the
liquidation preference on such date and remain a part thereof until such
dividends are paid. The rate per annum at which dividends will accrue on that
portion of the liquidation preference that consists of unpaid dividends that
were added to the liquidation preference on a dividend payment date and that
remain unpaid on the next succeeding dividend payment date will increase to
8.625% per annum from and after such next succeeding dividend payment date.
Accrued dividends are payable semiannually and, in the sole discretion of the
Company's Board of Directors, may be declared and paid in cash, in shares of
Series A TCI Group Common Stock or in any combination of the foregoing.
Accrued dividends not
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paid as provided above on any dividend payment date accumulate and such
accumulated unpaid dividends may be declared and paid in cash, shares of
Series A TCI Group Common Stock or any combination thereof at any time without
reference to any regular dividend payment, to holders of record of Series H
Preferred Stock as of a special record date fixed by the Company's Board of
Directors.
Upon the liquidation, dissolution or winding up of the Company, the holders
of Series H Preferred Stock will be entitled, after payment of preferential
amounts on any class or series of Preferred Stock ranking prior to the Series
H 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
liquidation preference thereof as of the date of payment or distribution.
The Series H Preferred Stock is redeemable at the option of the Company, in
whole at any time or in part from time to time on or after February 1, 2001,
for a redemption price per share payable in cash equal to the liquidation
preference thereof on such redemption date. The Company is required to redeem
the Series H Preferred Stock out of funds legally available therefor on
February 1, 2016, for a redemption price per share payable in cash equal to
the liquidation preference thereof on such redemption date.
The Series H Preferred Stock ranks senior to the Common Stock and the Class
B Preferred Stock and on a parity with all other currently outstanding classes
and series of Preferred Stock as to dividend rights, rights to redemption and
rights on liquidation.
As of March 31, 1998, subject to antidilution adjustments, each share of
Series H Preferred Stock is convertible, at the option of the holder, into (i)
.2625 of one share of Series A Liberty Media Group Common Stock, and (ii) upon
conversion of shares of the Series H Preferred Stock each holder of Series H
Preferred Stock is entitled to receive one additional share of Series A
Liberty Media Group Common Stock for every two such shares received upon such
conversion, and (iii) upon such conversion each such holder is entitled to
receive one additional share of Series A Liberty Media Group Common Stock for
every two shares of such stock held after calculating the number of such
shares issuable upon conversion of the Series H Preferred Stock as described
in clauses (i) and (ii) above. Subject to the provisions described in the
immediately following paragraph, if (i) the Company redeems all the
outstanding shares of Series A Liberty Media Group Common Stock in accordance
with the terms thereof, or (ii) the holders of Series H Preferred Stock would
be entitled to receive upon conversion thereof any shares of a class or series
of the Company's capital stock, which is redeemable or exchangeable at the
election of the Company ("Series H Redeemable Capital Stock"), and such Series
H Redeemable Capital Stock is redeemed, exchanged or otherwise acquired in
full, then, from and after either such event (a "Series H Redemption Event"),
the holders of Series H Preferred Stock then outstanding shall be entitled to
receive upon conversion of such shares of Series H Preferred Stock, in lieu of
shares of Series A Liberty Media Group Common Stock or such Series H
Redeemable Capital Stock, as the case may be, the kind and amount of
securities, cash or other assets receivable upon such Series H Redemption
Event by a holder of the number of shares of Series A Liberty Media Group
Common Stock or such Series H Redeemable Capital Stock, as the case may be,
into which such shares of Series H Preferred Stock could have been converted
immediately prior to the effectiveness of such Series H Redemption Event
(assuming that such holder failed to exercise any applicable right of election
with respect thereto and received per share of Series A Liberty Media Group
Common Stock or per share of such Series H Redeemable Capital Stock, as the
case may be, the kind and amount of securities, cash or other assets received
per share by the holders of a plurality of the non-electing shares thereof)
and, thereafter, the holders of the Series H Preferred Stock shall have no
other conversion rights with respect to the Series A Liberty Media Group
Common Stock or such Series H Redeemable Capital Stock, as the case may be.
Notwithstanding the foregoing, the provisions described in the immediately
preceding paragraph shall not apply, and the holders of any shares of Series H
Preferred Stock that are not exchanged as described in the second sentence of
this paragraph shall not have any conversion rights with respect to the Series
A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock,
as the case may be, after the Series H Redemption
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Event relating thereto, if (i) the redemption price for the shares of Series A
Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as
the case may be, is paid in whole or in part in securities ("Series H
Redemption Securities") of an issuer other than the Company (the "Series H
Other Issuer") and (ii) in connection with such Series H Redemption Event, the
"Mirror Preferred Stock Condition" is met, as such term is defined in the
certificate of designations for the Series H Preferred Stock. Generally, the
Mirror Preferred Stock Condition shall be satisfied if the Company makes
appropriate provisions so that holders of Series H Preferred Stock shall have
the right, exercisable on the effective date of the Series H Redemption Event,
to exchange their shares of Series H Preferred Stock for (A) if the Series H
Preferred Stock is not then convertible into any security, cash or assets
other than the stock that is the subject of the Series H Redemption Event
(i.e., Series A Liberty Media Group Common Stock or such Series H Redeemable
Capital Stock, as the case may be), convertible preferred stock of the Series
H Other Issuer having a liquidation preference equal to the liquidation
preference of the Series H Preferred Stock to be so exchanged, as in effect on
the effective date of the Series H Redemption Event, or (B) if the Series H
Preferred Stock is then convertible into any security, cash or assets in
addition to the stock that is the subject of the Series H Redemption Event
(any such additional securities, cash or assets, collectively, the "Additional
Conversion Property"), convertible preferred stock of the Company and
convertible preferred stock of the Series H Other Issuer having an aggregate
liquidation preference equal to the liquidation preference of the Series H
Preferred Stock to be so exchanged, as in effect on the effective date of the
Series H Redemption Event; provided, however, that in either case, the
convertible preferred stock into which shares of Series H Preferred Stock may
be exchanged shall otherwise have terms, conditions, designations, dividend
rights, voting powers, rights on liquidation and other preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions applicable to such convertible preferred stock
that are identical, or as nearly so as is practicable in the good faith
judgment of the Company's Board of Directors, to those of the Series H
Preferred Stock for which such convertible preferred stock is to be exchanged,
except that applicable time periods under the Series H Preferred Stock will be
tacked to corresponding time periods under such convertible preferred stock,
and except that (x) the convertible preferred stock of the Series H Other
Issuer will be convertible into the kind and amount of Series H Redemption
Securities, cash and other assets that the holders of shares of Series H
Preferred Stock in respect of which such convertible preferred stock is issued
would have received in the Series H Redemption Event had such shares of Series
H Preferred Stock been converted in full prior to the Series H Redemption
Event, and (y) any convertible preferred stock of the Company will be
convertible into the Additional Conversion Property, and will not be
convertible into, and the holders thereof will have no conversion rights
thereunder with respect to the Series A Liberty Media Group Common Stock or
Series H Redeemable Capital Stock, as the case may be, subject to the Series H
Redemption Event. The Mirror Preferred Stock Condition shall be deemed to have
been satisfied in connection with any Series H Redemption Event only if the
Company's Board of Directors determines (i) that receipt of such convertible
preferred stock of the Company and/or the Series H Other Issuer in exchange
for Series H Preferred Stock in connection with such Series H Redemption Event
would not result in the recognition of gain or loss by the holders of such
Series H Preferred Stock for United States federal income tax purposes; (ii)
that an adjustment made in the conversion rate of the Series H Preferred Stock
with respect to such Series H Redemption Event, as described in the
immediately preceding paragraph, would result in the recognition of gain or
loss by the holders of Series H Preferred Stock for United States federal
income tax purposes, or (iii) that receipt of Series H Redemption Securities
in redemption of the Series A Liberty Media Group Common Stock or Series H
Redeemable Capital Stock to be redeemed in such Series H Redemption Event
would result in the recognition of gain or loss by the holders of such Series
A Liberty Media Group Common Stock or Series H Redeemable Capital Stock, as
the case may be.
The holders of Series H Preferred Stock have the right to vote, on the basis
of one vote per share, together with the Common Stock, the Class B Preferred
Stock and any other class or series of Preferred Stock entitled to vote
thereon, in any general election of directors of the Company. The number of
authorized shares of Series H Preferred Stock may be increased or decreased
(but not below the number of shares of Series H Preferred Stock then
outstanding) by the affirmative vote of the holders of at least 66 2/3% of the
then outstanding Voting Securities (as defined in the Charter) voting together
as a single class. Except as provided above or required by the DGCL, the
Series H Preferred Stock has no voting rights.
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Limitations on Rights of Holders of Parity Stock and Junior Stock
For so long as any dividends are in arrears on any outstanding class or
series of Preferred Stock, and until all dividends accrued up to the
immediately preceding dividend payment date on such Preferred Stock and on any
class or series of Preferred Stock ranking on a parity with such Preferred
Stock ("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 purchase or otherwise acquire any
shares of such Preferred Stock, Parity Stock or any class or series of capital
stock ranking junior to such Preferred Stock ("Junior Stock"), or set aside
any money or assets for any such purpose, unless all of the outstanding shares
of such Preferred Stock and Parity Stock are redeemed. For so long as any
dividends are in arrears on any outstanding class or series of Preferred Stock
and until all dividends accrued up to the immediately preceding dividend
payment date on such 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 the Parity Stock or Junior Stock or set aside any
money or assets for any such purpose.
If the Company fails to redeem shares of Class B Preferred Stock or Series F
Preferred Stock required to be redeemed on a redemption date, the Company may
not redeem or exchange any Parity Stock or Junior Stock or 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 thereof may purchase or otherwise acquire any shares of such
Preferred Stock, Parity Stock or Junior Stock or set aside any money or assets
for any such purpose, until all shares of such class or series of Preferred
Stock are redeemed in full. If the Company fails to redeem shares of Series C-
TCI Group Preferred Stock or Series C-Liberty Media Group Preferred Stock
required to be redeemed on a redemption date, neither the Company nor any
subsidiary thereof may purchase or otherwise acquire any shares of such series
of Preferred Stock or Junior Stock or redeem, or discharge any sinking fund
obligation with respect to any Junior Stock, until all shares of such series
of Preferred Stock are redeemed in full. If the Company fails to redeem shares
of Series G Preferred Stock or Series H Preferred Stock required to be
redeemed on a redemption date, the Company may not redeem any Junior Stock or
Parity Stock or 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, and neither the Company nor any subsidiary thereof may
purchase or otherwise acquire any shares of such series of Preferred Stock,
Parity Stock or Junior Stock, or set aside any money or assets for any such
purpose, until all such shares are redeemed in full. Neither the Company nor
any subsidiary thereof may redeem, exchange, purchase or otherwise acquire any
shares of Parity Stock or Junior Stock, or set aside any money or assets for
such purpose, if after giving effect to such purchase or acquisition the
amount that would be available for distribution to the holders of Class B
Preferred Stock and Series F Preferred Stock upon liquidation, dissolution or
winding up of the Company, if such liquidation, dissolution or winding up were
to occur on the date fixed for such purchase or acquisition of shares of
Parity Stock or Junior Stock, would be less than the aggregate liquidation
preference of all then outstanding shares of such class or series of Preferred
Stock. The failure of the Company (i) to redeem on any date fixed for
redemption any outstanding shares of Class B Preferred Stock or Series F
Preferred Stock or (ii) to pay dividends on, in the case of Class B Preferred
Stock, any Parity Stock, and, in the case of Series F Preferred Stock, such
series of Preferred Stock, shall not prevent the Company from paying any
dividends on Parity Stock solely in shares of Parity Stock or Junior Stock or
on Junior Stock solely in exchange for shares of Junior Stock or the purchase
or other acquisition of such Preferred Stock or Parity Stock solely in shares
of Parity Stock or Junior Stock or of Junior Stock solely in exchange for
shares of Junior Stock. The failure of the Company (i) to redeem on any date
fixed for redemption any outstanding shares of Series G Preferred Stock or
Series H Preferred Stock or (ii) to pay dividends on any Parity Stock, shall
not prevent the Company from paying dividends on any Junior Stock solely in
shares of Junior Stock, paying dividends on any Parity Stock solely in shares
of Parity Stock and/or Junior Stock or the redemption, exchange, purchase or
acquisition of such series of Preferred Stock or Parity Stock solely in
exchange for shares of Parity Stock and/or Junior Stock.
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CERTAIN ANTI-TAKEOVER CONSIDERATIONS
The DGCL, the Charter and the Company's Bylaws contain provisions which may
serve to discourage or make more difficult a change in control of the Company
without the support of the Board of Directors or without meeting various other
conditions. The principal provisions of the DGCL, the Charter and the
Company's Bylaws are outlined below.
DGCL Section 203, in general, prohibits a "business combination" between a
corporation and an "interested stockholder" within three years of the date
such stockholder became an "interested stockholder," unless (i) prior to such
date the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, exclusive of shares owned
by directors who are also officers and by certain employee stock plans or
(iii) on or after such date, the business combination is approved by the board
of directors and authorized by the affirmative vote at a stockholders' meeting
of at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. The term "business combination" is defined to include,
among other transactions between the interested stockholder and the
corporation or any direct or indirect majority-owned subsidiary thereof, a
merger or consolidation; a sale, pledge, transfer or other disposition
(including as part of a dissolution) of assets having an aggregate market
value equal to 10% or more of either the aggregate market value of all assets
of the corporation on a consolidated basis or the aggregate market value of
all the outstanding stock of the corporation; certain transactions that would
increase the interested stockholder's proportionate share ownership of the
stock of any class or series of the corporation or such subsidiary; and any
receipt by the interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or through the
corporation or any such subsidiary. In general, and subject to certain
exceptions, an "interested stockholder" is any person who is the owner of 15%
or more of the outstanding voting stock (or, in the case of a corporation with
classes of voting stock with disparate voting power, 15% or more of the voting
power of the outstanding voting stock) of the corporation, and the affiliates
and associates of such person. The term "owner" is broadly defined to include
any person that individually or with or through its affiliates or associates,
among other things, beneficially owns such stock, or has the right to acquire
such stock (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement or understanding or upon the
exercise of warrants or options or otherwise or has the right to vote such
stock pursuant to any agreement or understanding, or has an agreement or
understanding with the beneficial owner of such stock for the purpose of
acquiring, holding, voting or disposing of such stock. The restrictions of
DGCL Section 203 do not apply to corporations that have elected, in the manner
provided therein, not to be subject to such section or, with certain
exceptions, which do not have a class of voting stock that is listed on a
national securities exchange or The NASDAQ Stock Market or held of record by
more than 2,000 stockholders.
The Charter does not contain any provision "opting out" of the application
of DGCL Section 203 and the Company has not taken any of the actions necessary
for it to "opt out" of such provision. As a result, the provisions of Section
203 will remain applicable to transactions between the Company and any of its
"interested stockholders."
The Charter also contains certain provisions which could make a change in
control of the Company more difficult. For example, the Charter requires,
subject to the rights, if any, of any class or series of the Preferred Stock,
the affirmative vote of 66 2/3% of the total voting power of the outstanding
shares of Voting Stock (as defined herein), voting together as a single class,
to approve (i) a merger or consolidation of the Company with, or into, another
corporation, other than a merger or consolidation which does not require the
consent of stockholders under the DGCL or a merger or consolidation which has
been approved by 75% of the members of the Board of Directors (in which case,
in accordance with the DGCL, the affirmative vote of a majority of the total
voting power of the outstanding Voting Stock would, with certain exceptions,
be required for approval), (ii) the sale, lease or exchange of all or
substantially all of the property and assets of the Company or (iii) the
dissolution of the Company. "Voting Stock" is defined in the Charter as the
TCI Group Common Stock, the
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Liberty Media Group Common Stock, the TCI Ventures Group Common Stock and any
class or series of Preferred Stock entitled to vote generally with the holders
of the Common Stock on matters submitted to stockholders for a vote which
currently would include the Series C-TCI Group Preferred Stock. and the Series
C-Liberty Media Group common Stock. The Charter also provides for a Board of
Directors of not less than three members, divided into three classes of
approximately equal size, with each class to be elected for a three-year term
at the annual meeting of stockholders at which such class of directors' term
expires. The exact number of directors, currently ten, is fixed by the Board
of Directors. The holders of Voting Stock and of Class B Preferred Stock,
Series G Preferred Stock and Series H Preferred Stock, voting together as a
single class, vote in elections for directors. (The holders of the Company's
Series F Preferred Stock are entitled to vote in the election of directors;
however, the DGCL prohibits the voting of such shares because such shares are
held by subsidiaries of the Company.) Stockholders of the Company do not have
cumulative voting rights.
The Charter authorizes the issuance of 50,000,000 shares of Series Preferred
Stock, of which 34,061,783 remain available for issuance as of March 31, 1998.
On April 1, 1998, all of the outstanding shares of Series D Preferred Stock
were redeemed to the extent not previously converted by the holders thereof
pursuant to the terms thereof, with the effect that such retired or converted
shares have been restored to the status of authorized and unissued shares of
Series Preferred Stock, and may be reissued as shares of another series of
Series Preferred Stock but may not be reissued as Series D Preferred Stock.
Under the Charter, the Board of Directors is authorized, without further
action by the stockholders of the Company, to establish the preferences,
limitations and relative rights of the Series Preferred Stock. In addition,
1,900,000,000 shares of TCI Group Common Stock, 825,000,000 shares of Liberty
Media Group Common Stock and 825,000,000 shares of TCI Ventures Group Common
Stock are currently authorized by the Charter, of which 1,189,273,685 shares
of TCI Group Common Stock, 431,960,040 shares of Liberty Media Group Common
Stock and 388,826,224 shares of TCI Ventures Group Common Stock remain
available for issuance as of March 31, 1998 (in each case without taking into
consideration shares reserved for issuance upon conversion, exchange or
exercise of outstanding convertible or exchangeable securities and options).
The issue and sale of shares of TCI Group Common Stock, Liberty Media Group
Common Stock, TCI Ventures Group Common Stock and/or Series Preferred Stock
could occur in connection with an attempt to acquire control of the Company,
and the terms of such shares of Series Preferred Stock could be designed in
part to impede the acquisition of such control.
The Charter requires the affirmative vote of 66 2/3% of the total voting
power of the outstanding shares of Voting Stock, voting together as a single
class, to approve any amendment, alteration or repeal of any provision of the
Charter or the addition or insertion of other provisions therein.
The Charter and the Company's Bylaws provide that a special meeting of
stockholders will be held at any time, subject to the rights of the holders of
any class or series of Preferred Stock, upon the call of the Secretary of the
Company upon (i) the written request of the holders of not less than 66 2/3%
of the total voting power of the outstanding shares of Voting Stock or (ii) at
the request of not less than 75% of the members of the Board of Directors.
Subject to the rights of any class or series of the Preferred Stock, the
Company's Bylaws require that written notice of the intent to make a
nomination at a meeting of stockholders must be received by the Secretary of
the Company, at the Company's principal executive offices, not later than (a)
with respect to an election of directors to be held at an annual meeting of
stockholders, 90 days in advance of such meeting, and (b) with respect to an
election of directors to be held at a special meeting of stockholders, the
close of business on the seventh day following the day on which notice of such
meeting is first given to stockholders. The notice must contain: (1) the name
and address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (2) a representation that the stockholder
is a holder of record of Voting Stock entitled to vote at the meeting and
intends to appear in person or by proxy at the meeting to nominate the person
or persons specified in the notice; (3) a description of all arrangements or
understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (4) such other information
regarding each nominee
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proposed by such stockholder as would have been required to be included in a
proxy statement filed pursuant to the proxy rules of the Commission had each
proposed nominee been nominated, or intended to be nominated, by the Board of
Directors; and (5) the consent of each nominee to serve as a director of the
Company if so elected. Any action to remove directors is required to be for
"cause" (as defined in the Charter) and be approved by the holders of 66 2/3%
of the total voting power of the outstanding shares entitled to vote in the
election of directors.
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PLAN OF DISTRIBUTION
The Company may sell the Offered Securities 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 or 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.
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.
Each underwriter, dealer and agent participating in the distribution of any
Offered Securities which are issuable in bearer form will agree that it will
not, directly or indirectly, offer any Offered Securities in bearer form for
sale or resale in the United States or its possessions or to United States
persons (subject to certain exceptions) or deliver any Offered Securities in
bearer form within the United States or its possessions. See "Description of
Debt Securities--Limitations on Issuance of Bearer Debt Securities."
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 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. The obligations of any purchaser under
any such contract will not be subject to any conditions except that (i) the
purchase by such purchaser of the Offered Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject, and (ii) if the Offered Securities being sold to such
purchaser are also being sold to underwriters, the Company shall have sold to
such underwriters the Offered Securities, not sold for delayed delivery,
pursuant to the underwriting agreement referred to in the related Prospectus
Supplement. The agents and underwriters will not have any responsibility in
respect of the validity of performance of such contracts. The Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts.
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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
The legality of the Offered Securities will be passed upon for the Company
by Stephen M. Brett, Esq., Executive Vice President and General Counsel of the
Company. If agents or underwriters are utilized, the legality of the Offered
Securities will be passed upon for such agents or underwriters by such
counsel, which will be named in the Prospectus Supplement, as such agents or
underwriters may select.
EXPERTS
The consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1997 and 1996, 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, 1997, and all related
financial statement schedules, which appear in the Annual Report on Form 10-K
of Tele-Communications, Inc. for the year ended December 31, 1997, have been
incorporated by reference herein in reliance upon the reports, dated March 20,
1998, 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 combined balance sheets of TCI Group as of December 31, 1997 and 1996,
and the related combined statements of operations, equity (deficit), and cash
flows for each of the years in the three-year period ended December 31, 1997,
which appear in the Annual Report on Form 10-K of Tele-Communications, Inc.
for the year ended December 31, 1997, have been incorporated by reference
herein in reliance upon the report, dated March 20, 1998, 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 covering the combined financial
statements above refers to the effects of not consolidating TCI Group's
interest in Liberty Media Group and TCI Ventures Group for all periods that
TCI Group has an interest in Liberty Media Group and TCI Ventures Group.
The combined balance sheets of Liberty Media Group as of December 31, 1997
and 1996, and the related combined statements of operations, equity, and cash
flows for each of the years in the three-year period ended December 31, 1997,
which appear in the Annual Report on Form 10-K of Tele-Communications, Inc.
for the year ended December 31, 1997, have been incorporated by reference
herein in reliance upon the report, dated March 20, 1998, 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 combined balance sheets of TCI Ventures Group as of December 31, 1997
and 1996, and the related combined statements of operations, equity, and cash
flows for each of the years in the three-year period ended December 31, 1997,
which appear in the Annual Report on Form 10-K of Tele-Communications, Inc.
for the year ended December 31, 1997, have been incorporated by reference
herein in reliance upon the report, dated March 20, 1998, 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 consolidated balance sheet of Telewest Communications plc and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations and cash flows for each of the years in the
three-year period ended December 31, 1997, which appear in the Annual Report
on Form 10-K of
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Tele-Communications, Inc. for the year ended December 31, 1997, have been
incorporated by reference herein in reliance upon the report, dated March 19,
1998, of KPMG Audit Plc, chartered accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated balance sheets of Sprint Spectrum Holding Company, L.P. and
subsidiaries as of December 31, 1997 and 1996 and the related consolidated
statements of operations, changes in partners' capital and cash flows for each
of the three years in the period ended December 31, 1997, incorporated herein
by reference, which appear in the Annual Report on Form 10-K of Tele-
Communications, Inc. for the year ended December 31, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report (which
expresses an unqualified opinion and includes an explanatory paragraph
referring to the emergence from the development stage), which is incorporated
by reference herein, and has been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
The consolidated balance sheets of Cablevision Systems Corporation and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, stockholders' deficiency and cash flows for each of
the years in the three-year period ended December 31, 1996, and the related
financial statement schedule, which are incorporated by reference in the
Current Report on Form 8-K of Tele-Communications, Inc., dated March 6, 1998,
have been incorporated by reference herein in reliance upon the report, dated
April 1, 1997, 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.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND ANY
PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
---------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 2
Incorporation of Documents by Reference.................................... 3
The Company................................................................ 4
Use of Proceeds............................................................ 4
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends..................................... 4
Holding Company Structure.................................................. 5
Description of Debt Securities............................................. 6
Description of Series Preferred Stock...................................... 18
Description of Depositary Shares........................................... 21
Description of Capital Stock............................................... 24
Common Stock.............................................................. 24
Preferred Stock........................................................... 58
Plan of Distribution....................................................... 76
Legal Matters.............................................................. 77
Experts.................................................................... 77
</TABLE>
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TELE-COMMUNICATIONS, INC.
DEBT SECURITIES
SERIES PREFERRED STOCK
DEPOSITARY SHARES
SERIES A TCI GROUP COMMON STOCK
SERIES A LIBERTY MEDIA GROUP COMMON STOCK
SERIES A TCI VENTURES GROUP COMMON STOCK
-------------------
PROSPECTUS
-------------------
June , 1998
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The aggregate estimated expenses, other than underwriting discounts and
commissions, in connection with the offering pursuant to this Registration
Statement are currently anticipated to be as follows:
<TABLE>
<S> <C>
Registration Fee.................................................. $442,500
Blue Sky Fees and Expenses (including counsel fees)............... 20,000
Printing and Engraving Expenses................................... 100,000
Legal Fees and Expenses........................................... 100,000
Accounting Fees and Expenses...................................... 75,000
Rating Agency Fees................................................ 75,000
Miscellaneous..................................................... 15,000
--------
Total........................................................... $827,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") 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 threatened,
pending or completed 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, officer, employee or agent of the corporation against all expenses,
judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person 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 or her conduct was unlawful. A corporation may similarly
indemnify such person for expenses actually and reasonably incurred by such
person 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 or she 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 DGCL 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 of the DGCL, 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 Tele-Communications, Inc.'s (the "Company") 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 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.
II-1
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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.
3. Amendment or Repeal.
Any repeal or modification of the foregoing provisions of this Section E
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification."
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 Company, to the fullest extent provided by the laws
of the State of Delaware and the Company's Restated Certificate of
Incorporation, as then or thereafter in effect.
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 or
II-2
<PAGE>
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 an indemnitee be provided with the
maximum coverage available for any director or officer of the Company if there
is such a policy.
The Company may purchase liability insurance policies covering its directors
and officers.
In addition, pursuant to Section 6 of the form of Equity Underwriting
Agreement and Section 6 of the form of Debt Underwriting Agreement, the
Underwriters will agree to indemnify and hold harmless the Company and its
directors and officers and each person, if any, who controls the Company
within the meaning of either the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended
("Exchange Act"), against certain liabilities including civil liabilities
under the Securities Act or the Exchange Act.
II-3
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement for Equity Securities.
1.2 Form of Underwriting Agreement for Debt Securities.
4.1 Form of Senior Indenture.
4.2 Form of Senior Subordinated Indenture.*
4.3 Form of Subordinated Indenture.*
4.4 Form of Deposit Agreement.*
4.5 Restated Certificate of Incorporation of the Company, dated August 4,
1994, as amended on August 4, 1994, August 16, 1994, October 11, 1994,
October 21, 1994, January 26, 1995, August 3, 1995, August 3, 1995,
January 25, 1996, January 25, 1996, April 7, 1997, August 28, 1997,
December 31, 1997 and December 31, 1997 (incorporated herein by
reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1997 (Commission File No. 0-20421)).
4.6 Bylaws of the Company as adopted June 16, 1994 (incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as amended by Form 10-K/A
(Amendment No. 1) (Commission File No. 0-20421)).
4.7 Form of Depositary Receipt for Depositary Shares (included in Exhibit
4.4).*
4.8 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI
Group Common Stock, par value $1.00 per share (incorporated herein by
reference to Exhibit 4.3 of Amendment No. 1 to the Company's
registration statement on Form 8-A which was subsequently amended by
Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)).
4.9 Specimen Stock Certificate for Tele-Communications, Inc. Series A
Liberty Media Group Common Stock, par value $1.00 per share
(incorporated herein by reference to Exhibit 4.5 of Amendment No. 1 to
the Company's registration statement on Form 8-A, which was
subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3)
(Commission File No. 0-20421)).
4.10 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI
Ventures Group Common Stock, par value $1.00 per share, of the Company
(incorporated herein by reference to Exhibit 4.3 of the Company's
registration statement on Form S-8, filed with the Commission on
November 13, 1997 (No. 333-40141)).
5 Opinion of Stephen M. Brett, Esq.*
12 Calculation of Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends of the Company.
23.1 Consent of KPMG Peat Marwick LLP.
</TABLE>
II-4
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of KPMG Audit Plc.
23.6 Consent of Deloitte & Touche LLP.
23.7 Consent of KPMG Peat Marwick LLP.
23.8 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).*
24.1 Power of Attorney (included on Page II-8)
25.1 Statement of Eligibility of the Trustee under the Senior Indenture, on
Form T-1.+
25.2 Statement of Eligibility of the Trustee under the Senior Subordinated
Indenture, on Form T-1.+
25.3 Statement of Eligibility of the Trustee under the Subordinated
Indenture, on Form T-1.+
</TABLE>
- --------
* To be filed by amendment.
+ To be filed separately pursuant to Section 305(b)(2) of the Trust Indenture
Act of 1939, as amended, and the rules and regulations prescribed by the
Commission thereunder.
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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(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 Registrants
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.
II-5
<PAGE>
(3) To remove from registration by means of 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 Registrants' 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) To file an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act ("TIA") in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the TIA.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions described under Item 15 above, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants 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 Registrants 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-6
<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
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Greenwood Village, State of
Colorado, on June 11, 1998.
Tele-Communications, Inc.
/s/ Stephen M. Brett
By:__________________________________
NAME: STEPHEN M. BRETT
TITLE: EXECUTIVE VICE-PRESIDENT
II-7
<PAGE>
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints Stephen M. Brett, Esq. and Elizabeth M.
Markowski, Esq., and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration
Statement and to file the same with all exhibits thereto, and other documents
in connection therewith, with the Commission, granting unto said attorneys-in-
fact and agents and each of them full power and authority, to do and perform
each and every act and thing requisite or necessary to be done in and about
the premises, to all intents and purposes and as fully as they might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or their substitutes may lawfully do or cause to be done in virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons (which persons
constitute a majority of the Board of Directors) in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John C. Malone Chairman of the Board, Chief June 11, 1998
_____________________________ Executive Officer and
JOHN C. MALONE Director of TCI (Principal
Executive Officer)
/s/ Leo J. Hindery, Jr. President, Chief Operating June 11, 1998
_____________________________ Officer and Director
LEO J. HINDERY, JR.
/s/ John W. Gallivan Director June 11, 1998
_____________________________
JOHN W. GALLIVAN
Director
_____________________________
PAUL A. GOULD
/s/ Jerome H. Kern Director June 11, 1998
_____________________________
JEROME H. KERN
Director
_____________________________
ROBERT A. NAIFY
/s/ Donne F. Fisher Director June 11, 1998
_____________________________
DONNE F. FISHER
Director
_____________________________
KIM MAGNESS
/s/ J.C. Sparkman Director June 11, 1998
_____________________________
J.C. SPARKMAN
/s/ Bernard W. Schotters Senior Vice President and June 11, 1998
_____________________________ Treasurer (Principal
BERNARD W. SCHOTTERS Financial Officer)
/s/ Gary K. Bracken Executive Vice President and June 11, 1998
_____________________________ Controller of TCI
GARY K. BRACKEN Communications, Inc.
(Principal Accounting
Officer)
</TABLE>
II-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<C> <S> <C>
1.1 Form of Underwriting Agreement for Equity Securities.
1.2 Form of Underwriting Agreement for Debt Securities.
4.1 Form of Senior Indenture.
4.2 Form of Senior Subordinated Indenture.*
4.3 Form of Subordinated Indenture.*
4.4 Form of Deposit Agreement.*
4.5 Restated Certificate of Incorporation of the Company, dated
August 4, 1994, as amended on August 4, 1994, August 16, 1994,
October 11, 1994, October 21, 1994, January 26, 1995, August 3,
1995, August 3, 1995, January 25, 1996, January 25, 1996, April
7, 1997, August 28, 1997, December 31, 1997 and December 31,
1997 (Incorporated herein by reference to Exhibit 3.1 of the
Company's Annual Report on Form 10-K for the year ended December
31, 1997 (Commission File No. 0-20421)).
4.6 Bylaws of the Company as adopted June 16, 1994 (incorporated
herein by reference to Exhibit 3.2 of the Company's Annual
Report on Form 10-K for the year ended December 31, 1994, as
amended by Form 10-K/A (Amendment No. 1) (Commission File No.
0-20421)).
4.7 Form of Depositary Receipt for Depositary Shares (included in
Exhibit 4.4).*
4.8 Specimen Stock Certificate for Tele-Communications, Inc. Series
A TCI Group Common Stock, par value $1.00 per share
(incorporated herein by reference to Exhibit 4.3 of Amendment
No. 1 to the Company's registration statement on Form 8-A which
was subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and
3) (Commission File No. 0-20421)).
4.9 Specimen Stock Certificate for Tele-Communications, Inc. Series
A Liberty Media Group Common Stock, par value $1.00 per share
(incorporated herein by reference to Exhibit 4.5 of Amendment
No. 1 to the Company's registration statement on Form 8-A, which
was subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and
3) (Commission File No.
0-20421)).
4.10 Specimen Stock Certificate for Tele-Communications, Inc. Series
A TCI Ventures Group Common Stock, par value $1.00 per share, of
the Company (incorporated herein by reference to Exhibit 4.3 of
the Company's registration statement on Form S-8, filed with the
Commission on November 13, 1997 (No. 333-40141)).
5 Opinion of Stephen M. Brett, Esq.*
</TABLE>
<PAGE>
EXHIBIT 1.1
TELE-COMMUNICATIONS, INC.
UNDERWRITING AGREEMENT
FOR EQUITY SECURITIES
__________ __, 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) shares
of its Series A TCI Group Common Stock, $1.00 par value per share (the "Common
Stock"), and/or shares of its Series Preferred Stock, par value $.01 per share
(the "Preferred Stock"), (which may be represented by depositary shares
representing shares of Preferred Stock (the "Depositary Shares")). (The Common
Stock, the Preferred Stock and the Depositary Shares 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 one or more of the 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 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
<PAGE>
called the "Act"), a shelf registration statement on Form S-3 (File No. ),
including a prospectus, relating to, among other securities, Common Stock,
Preferred Stock (which may be represented by Depositary Shares) and shares of
Common Stock which may be issuable from time to time upon conversion of
convertible Preferred Stock , 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 shelf 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 any 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 , as
filed with the Commission pursuant to Rule 424 under the Act and forming part of
the Registration Statement. 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 and
any information deemed to be a part thereof pursuant to Rule 434 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 to the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such preliminary prospectus or the Prospectus, as the case may be, and any
reference herein to any amendment or supplement to any preliminary prospectus or
the Prospectus, 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
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 Preferred Stock,
-2-
<PAGE>
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").
Common Stock, Preferred Stock and Depositary Shares 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 or 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 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.
-3-
<PAGE>
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 Regulation M 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 Rule 100 of said Regulation) 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 Regulation (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 offices of Baker & Botts, L.L.P., 599 Lexington Avenue, 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 48 hours 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 or by wire transfer to an account specified by the
Company of same day federal 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 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:
-4-
<PAGE>
(a) The Company will notify you promptly, and (if requested by you in
writing) will confirm such advice in writing, during the period of the
distribution of the Offered Securities (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 post-effective
amendment thereto filed in connection with the offering of the Offered
Securities, 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).
(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.
(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 such Underwriter may reasonably request.
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, both in connection with the offering or
sale of the 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
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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 during such period, and will deliver to each Underwriter,
without charge, such number of copies thereof as such Underwriter may
reasonably request. If during such period of time any event shall occur
which in your judgment 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 Common Stock issuable upon
conversion 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 Common Stock issuable upon
conversion 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 consolidated earnings statements (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 all expenses in connection with: (1) 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 fees charged
by securities rating agencies for rating any of the Offered Securities; (3)
the preparation, issuance and delivery of the Offered Securities (including
Depositary Receipts evidencing Depositary Shares) (other than transfer
taxes); (4) the preparation, execution and delivery of any deposit
agreement and, to the extent set forth
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therein, the fees and expenses of the Depositary; (5) the printing of any
dealer agreement; and (6) 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 any 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 during the period of the distribution of the Offered
Securities will, when they are filed with the Commission, 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 or Rule 434
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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 or Rule 434 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 or Rule 434 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 if first
filed with the Commission pursuant to Rule 424 or Rule 434 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 any Underwriter
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;
(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
conversion 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;
(f) 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
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<PAGE>
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;
(g) 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;
(h) KPMG Peat Marwick LLP, the Company's auditors, are independent
accountants as required by the Act;
(i) 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
(j) 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
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
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<PAGE>
made, not misleading, except insofar as such omission or allegation thereof is
based upon information furnished in writing to the Company by an Underwriter
through the Representatives expressly for use 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 the 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.
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 to so 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 or
such controlling person and the Company, and you shall have been advised by your
counsel that there may be a conflict of interest between such Underwriter or
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 of attorneys
to act as local counsel in such jurisdiction, provided the services of such
counsel are substantially limited to that of
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<PAGE>
appearing as attorneys of record) at any time for all indemnified parties, which
firm shall be designated 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
judgment 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 judgment.
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 hand from the offering of the Offered Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the 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
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forth in the second paragraph of this Section 6, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each Underwriter agrees 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 the Offered 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 any Underwriter or by or 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 Registration 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 a Senior Vice President 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 (f) 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,
Raywid & 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, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has the
corporate power and authority to carry
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on its business as described in the Prospectus (as amended or
supplemented, if applicable) and the Company has the corporate power
and 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 the Offered Securities 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
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(vii) to the best knowledge of such counsel, neither the
Registration Statement nor the Prospectus, as amended or supplemented,
if applicable (except as to the financial statements and schedules and
any other financial and statistical 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 reasonably 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;
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(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 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 conversion 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) 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
(vi) 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
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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 by reference
therein and (y) the documents incorporated therein or deemed to be incorporated
by reference therein, as to which no belief 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 statement 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 the opinions required under this Section 7(b), subparagraphs (A),
(B), (C) and (D), each 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 and others, and (y) as to matters of law if other than the law of 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
-16-
<PAGE>
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) 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;
(e) 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;
(f) 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
(g) 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 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
-17-
<PAGE>
shall have been suspended on either such Exchange or trading in the Common Stock
or 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; provided, however, that if 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.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
-18-
<PAGE>
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 principal executive office located
at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000,
attention: Chief Financial Officer, or (b) to you at the address 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.
-19-
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriters.
Very truly yours,
TELE-COMMUNICATIONS, INC.
By:__________________________
Name:
Title:
Confirmed as of the date
first above mentioned
By: __________________________________
Name:
Title:
-20-
<PAGE>
Annex I
TELE-COMMUNICATIONS, INC.
PRICING AGREEMENT
___________ ___, 19___
Dear Sirs:
Tele-Communications, Inc., a Delaware corporation (the "Company"),
proposes, subject to terms and conditions stated herein and in the Underwriting
Agreement dated ___________, 19__ (the "Underwriting Agreement"), to issue and
sell to each Underwriter named in Exhibit A hereto (each an "Underwriter")
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 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. Terms not otherwise defined herein shall have the meanings ascribed to them
in the Underwriting Agreement.
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.
Subject to the terms and conditions set forth herein and the Underwriting
Agreement incorporated herein by reference, the Company agrees to sell to each
Underwriter, and each Underwriter agrees to purchase from the Company, at a
purchase price to each Underwriter 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 Representatives exercise the election to
purchase Optional Securities as provided below, the Company agrees to sell to
each Underwriter, and each Underwriter agrees to purchase from the Company at
the purchase price to each Underwriter set forth in Exhibit A hereto, that
portion of the number of Optional Securities as to which such election has been
exercised.
-1-
<PAGE>
The Company hereby grants to each Underwriter, subject to the terms set
forth herein and in the Underwriting Agreement, the right to purchase at its
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.
[Each Underwriter (i) has not offered or sold, and will not offer or sell,
in the United Kingdom, by means of any document, any Offered Securities other
than to persons whose ordinary business is to buy or sell shares or debentures,
whether as principal or agent (except under circumstances which do not
constitute an offer to the public within the meaning of the Companies Act 1985);
(ii) has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the Offered Securities in, from or otherwise involving the United Kingdom; and
(iii) has only issued or passed on, and will only issue and pass on to any
person in the United Kingdom, any document received by it in conjunction with
the issue of the Offered Securities if that person is of a kind described in
Article 9(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1988 or is a person to whom the document may otherwise
lawfully be issued or passed on.]
Delivery and payment for the Firm Securities shall be made at 10:00 a.m.
New York time on , (the "Closing Date") at the
offices of Baker & Botts, L.L.P., 599 Lexington Avenue, 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 Representatives 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 an aggregate number of Optional
Securities to be purchased, the number of Optional Securities to be purchased by
each Underwriter, 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, this
Pricing Agreement, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
the Underwriter and the Company.
Very truly yours,
Tele-Communications, Inc.
By: ________________________________
Name:
Title:
-2-
<PAGE>
Confirmed as of the date
first above mentioned
By:____________________________
Name:
Title:
-3-
<PAGE>
Exhibit A
[Names of Underwriters, Number of Offered Securities and Purchase Price]
<PAGE>
Exhibit B
[Terms of Offered Securities]
<PAGE>
EXHIBIT 1.2
TELE-COMMUNICATIONS, INC.
UNDERWRITING AGREEMENT
FOR DEBT SECURITIES
__________ ___, 19__
[To the Underwriter(s) or Representative(s) of Underwriters]
Dear Sirs:
Tele-Communications, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell principal amount of its [ ] (the "Offered
Securities") pursuant to an indenture dated as of , ([as amended and]
as the same may be [further] amended or supplemented, the "Indenture"), with
, as trustee (the "Trustee"). Each Offered Security will be
issuable in the denominations and shall have the terms set forth in Exhibit A.
[The term "Underwriters" as used herein will mean and refer collectively to one
or more several Underwriters named in Exhibit B (and any substitute underwriter
pursuant to Section 9 hereof), the term "Underwriter" will refer to any of the
several Underwriters named in Exhibit B (and any substitute underwriter pursuant
to Section 9 hereof), and the term "Representatives" will refer to you in your
capacity as the Representatives of the several Underwriters or, in the event no
Representatives shall have been appointed, in your capacity as Underwriters. Any
reference to you in this Agreement shall be solely in your capacity as
Representatives.] The Company confirms as follows its agreement with you and the
Underwriter[s].
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 Form S-3 (File No. ), including a
prospectus, relating to, among other securities, debt securities of the Company
("Debt Securities") issuable from time to time in one or more series, [including
the Offered Securities] and shares of Series A TCI Group Common Stock, $1.00 par
value per share, of the Company ("Common Stock") issuable from time to time upon
conversion of convertible Debt Securities, [including the shares (the "Common
Shares") issuable upon conversion of the Offered Securities,] 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 shelf 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 references to the
Registration Statement as of a
<PAGE>
date subsequent to the date hereof, as amended or supplemented as of such date.
The term "Basic Prospectus" means the prospectus, dated ____________, _____, as
filed with the Commission pursuant to Rule 424 under the Act and forming part of
the Registration Statement. 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 and
any information deemed to be a part thereof pursuant to Rule 434 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
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such
preliminary prospectus or the Prospectus, as the case may be, and any reference
herein to any amendment or supplement to any preliminary prospectus or the
Prospectus, 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 each of the Underwriters agrees to purchase from
the Company, severally and not jointly, the principal amount of Offered
Securities set forth opposite each Underwriter's respective name in Exhibit B,
at a purchase price per Offered Security of $ , plus accrued
[interest][original issued discount] from .
With respect to any of the Offered Securities purchased by you hereunder
that you continue to own or hold at any time on or after the 90th day following
the Closing Date (as defined in Section 3), you agree that upon receipt of
written notice from the Company of its 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 Regulation M promulgated by the Commission under
the Exchange Act (or any successor or equivalent rule or regulation) during the
distribution of the Offered Securities, you will, and will cause your
"affiliated purchasers" (as defined in Rule 100 of said Regulation) to, cease
distributing the Offered Securities for such period of time as the Company may
deem necessary so that the action or actions proposed to be taken, directly or
indirectly, by it may be taken in full compliance with such Regulation (or any
successor or equivalent rule or regulation).
3. Delivery and Payment: Delivery of and payment for the Offered
Securities shall be made at 10:00 a.m., New York time, on ______________, 19__
(such time and date are referred to herein as the "Closing Date"), at the
offices of Baker & Botts, L.L.P., 599 Lexington Avenue, New York, New York. The
Closing Date and the place of delivery of and payment for the Offered Securities
may be varied by agreement between you and the Company.
Delivery of the Offered Securities (in definitive form and registered in
such names and in such authorized denominations as you shall request at least 48
hours prior to the Closing Date by written notice to the Company) shall be made
to you against payment by you of the purchase price
2
<PAGE>
therefor by cashier or official bank check or checks payable to the order of the
Company or by wire transfer to an account specified by the Company of same day
federal funds. For the purpose of expediting the checking and packaging of the
Offered Securities, the Company agrees to make the Offered 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.
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, during the period of the
distribution of the Offered Securities (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 [or the Common
Shares] 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 [or the Common Shares] 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 moment.
(b) The Company will furnish to each of you, without charge, one
conformed copy of the Registration Statement and any post-effective
amendment thereto filed in connection with the offering of the Offered
Securities, 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).
(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.
3
<PAGE>
(d) During the period of time that the Prospectus is required by law
to be delivered, the Company will deliver to each Underwriter, without
charge, as many copies of the Prospectus or any amendment or supplement
thereto as such Underwriter may reasonably request. 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,
both in connection with the offering or sale of the 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 during such
period, and will deliver to each Underwriter, without charge, such number
of copies thereof as such Underwriter may reasonably request. If during
such period of time any event shall occur which in your judgment 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 the Offered Securities by the
Underwriters, the Company will cooperate with you and your counsel in
connection with the registration or qualification of the Offered Securities
[and the Common Shares] for offer and sale under the securities or Blue Sky
laws of, and the determination of the eligibility of the 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 qualification
of the Offered Securities [and the Common Shares] under such securities or
Blue Sky laws and in connection with the determination of the eligibility
of the 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 consolidated earnings statements (which need not be audited)
that satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder.
4
<PAGE>
(g) The Company will pay all expenses in connection with (1) 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) the preparation,
issuance and delivery of the Offered Securities (other than transfer taxes)
and the execution and delivery of the Indenture, (3) the printing of any
dealer agreement, (4) furnishing such copies of the Registration Statement,
the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, including any term sheets delivered by the Company
pursuant to Rule 434 under the Act, as may be requested for use in
connection with the offering and sale of the Offered Securities by dealers
to whom Offered Securities may be sold, and (5) any fees paid to rating
agencies, if any, selected by the Company in connection with the rating of
the Offered Securities.
(h) If this Agreement is terminated by you because any condition to
the obligations of 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 hereof or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will reimburse the
Underwriter[s] for all out-of-pocket expenses (including the fees and
expenses of your counsel) reasonably incurred by the Underwriter[s] 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 Closing Date, the
Company will not offer or sell, or contract to sell, any Debt Securities of
the Company with a maturity of more than one year, including additional
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 during the period of the distribution of the Offered
Securities will, when they are filed with the Commission, 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
5
<PAGE>
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 or Rule 434 under the Act, will
comply when so filed in all material respects with the Act; and when the
Prospectus or any term sheet is first filed with the Commission pursuant to
Rule 424 or Rule 434 and as of the 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 and the Indenture
will comply in all material respects with the requirements of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture 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 or Rule 434 and as of the 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 or Rule 434 and as of the 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 any Underwriter [through you]
expressly for use therein or to that part of the Registration Statement
which consists of the Statements of Eligibility on Form T-1 under the Trust
Indenture Act of the trustees for the Debt Securities;
(c) the Offered Securities [,the Common Stock] and the Indenture have
been duly authorized by the Company and each will conform to the
descriptions thereof in the Prospectus;
(d) the issuance and sale of the Offered Securities [, the delivery
of the Common Stock] and the fulfillment of the terms of this 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(w) 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;
(e) KPMG Peat Marwick LLP, the Company's auditors, are independent
accountants as required by the Act;
6
<PAGE>
(f) so long as may be required for the distribution of the Offered
Securities by the Underwriters 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]
(g) 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[; and]
[(h) the Company has reserved a sufficient number of Common Shares to
cover the conversion of all the Offered Securities at the initial
conversion [price][rate] (prior to any adjustment of such [price][rate]
pursuant to the Offered Securities and the Indenture); the Common Shares
when issued or delivered upon conversion of the Offered Securities will be
duly and validly authorized, issued, fully paid and non-assessable; and the
Common Shares are free of preemptive rights].
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 amendment or supplement
thereto 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
losses, claims, damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or allegation thereof based upon
information furnished in writing to the Company by any Underwriter [through you]
expressly for use therein; provided, however, the Company shall not indemnify
any Underwriter or any person who controls such Underwriter from 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 if the Company shall have furnished any
amendments or supplements thereto) 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
you that the filing of a post-effective amendment or supplement thereto was
required, except the Prospectus as so amended or
7
<PAGE>
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.
If any action or proceeding (including any governmental investigation)
shall be brought or asserted against any 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. Any such Underwriter or any such 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 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 or
such controlling person and the Company, and you shall have been advised by your
counsel that there may be a conflict of interest between such Underwriter or
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 of attorneys
to act as local counsel in such jurisdiction, provided the services of such
counsel are substantially limited to that of appearing as attorneys of record)
at any time for all indemnified parties, which firm shall be designated 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 judgment 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 judgment.
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 expressly for use in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
preliminary prospectus. In case any action or
8
<PAGE>
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 hand from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the 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 respect 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 relates to
information supplied by the Company or by the Underwriters through you 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 investigating or defending
any action or claim.
The Company and each Underwriter 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 the Offered 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 or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
9
<PAGE>
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 the Underwriters, by or on behalf of any
person controlling 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.
7. Conditions of the Underwriters' Obligations: The Underwriters'
obligations hereunder are subject to the following conditions:
(a) at the Closing Date, [(i)] no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or threatened by the
Commission; and you shall have received a certificate, dated the Closing
Date and signed by the Chairman of the Board, the President, an Executive
Vice President or a Senior Vice President 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 (e) of this Section 7
[(with respect to Senior Debt Securities only), and (ii) the rating
assigned by a nationally recognized securities rating agency in the United
States to the senior debt securities of the Company as of the date of this
Agreement shall not have been lowered since that date];
(b) you shall have received opinions, dated the Closing Date and
reasonably satisfactory to counsel retained for the Underwriters, (A) from
Messrs. Cole, Raywid & Braverman, L.L.P. or such other special
communications counsel for the Company as may be reasonably satisfactory to
you, (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, validly 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 authority to execute and deliver
and perform its obligations under this Agreement and to issue and sell
the Offered Securities as contemplated by this 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;
10
<PAGE>
(iii) all corporate proceedings legally required in connection
with the authorization and issuance of the Offered Securities and the
sale of the Offered Securities by the Company in accordance with the
terms of this 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;
(vii) the execution and delivery of this Agreement and the
Indenture, 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 LLC or (ii) the federal securities laws or 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 (except as to the financial statements and schedules and
any other financial and statistical data contained and incorporated by
reference in the Registration Statement or Prospectus, as to which no
opinion need be expressed), contained, as of the date the Prospectus
was first filed with the Commission pursuant to Rule 424, or contains,
as of the 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[; and
11
<PAGE>
(viii) The Company has reserved a sufficient number of the Common
Shares to cover the conversion of all the Offered Securities at the
initial conversion [price] [rate] (prior to any adjustment of such
[price] [rate] pursuant to the Offered Securities and the Indenture),
and such Common Shares, when so delivered upon such conversion in
accordance with the terms and provisions of the Offered Securities and
the Indenture, assuming no change in the applicable law or pertinent
facts, will be duly and validly authorized, issued, fully paid and
non-assessable].
(C) from Messrs. Sherman & Howard LLC, special counsel to the Company,
to the following effect and covering such additional matters as you may
reasonably request:
(i) the execution and delivery of this Agreement and the
Indenture, 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 you,
to the following effect and covering such additional matters as you may
reasonably request:
(i) this Agreement and the Indenture have been duly
authorized, executed and delivered by the Company; and the Indenture
is a legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except (A) as such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws affecting creditors' rights
generally, and (B) that the remedy of specific performance and
injunctive and other forms of equitable relief are subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(ii) the Indenture has been duly qualified under, and complies
in all material respects with the requirements of, the Trust Indenture
Act;
(iii) the Offered Securities, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters in accordance with this Agreement, will be
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their
terms, except (A) as such enforceability may be limited by bankruptcy,
12
<PAGE>
insolvency, reorganization, fraudulent conveyance, moratorium and
other laws affecting creditors' rights generally, and (B) that the
remedy of specific performance and injunctive and other forms of
equitable relief are subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iv) 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
(v) the Offered Securities[, the Common Stock] and the
Indenture conform in all material respects as to legal matters to the
descriptions thereof in the Prospectus.
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 [, the Common Stock] and the Indenture 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 by reference in the
Registration Statement or the Prospectus and (y) the documents
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
case of the Prospectus, as amended
13
<PAGE>
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 and others, and (y) as to matters of
law if other than the United States or Colorado (in the case of
Messrs. Sherman & Howard LLC 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 you and counsel for the Underwriters;
(c) you shall have received on the Closing Date from counsel retained
by you on behalf of the Underwriters an opinion to the effect set forth in
clauses (b)(D)(i) and (iii) and 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. In addition, you shall have
received on the Closing Date from such counsel an opinion with respect to
the Registration Statement and the Prospectus in the form customarily given
by such firm;
(d) on the Closing Date you shall have received a letter addressed to
the Representatives from KPMG Peat Marwick LLP, independent auditors for
the Company, reasonably satisfactory to you; and
(e) the representations and warranties of the Company in this
Agreement shall be true and correct on and as of the 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
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 Closing Date, any material
adverse changes in the condition (financial or otherwise), business,
prospects or results of operations of the Company and its subsidiaries,
considered as a whole; and
(f) subsequent to the date of this 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 your
reasonable judgment, 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.
14
<PAGE>
8. Termination of Agreement: The obligation of the Underwriters to
purchase the Offered Securities may be terminated at any time prior to the
Closing Date by notice to the Company from you, 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 this
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 the
common stock or debt securities of the Company 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 Closing Date to purchase the Offered Securities
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 underwriter, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be approved by you and
upon the terms herein set forth; if however, you have not completed such
arrangements within such 24-hour period, then:
(a) if the principal amount of Defaulted Securities does not exceed
10% of the aggregate principal amount of Offered Securities, 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 principal amount of Defaulted Securities exceeds 10% of
the aggregate principal amount of Offered Securities, the Company shall be
entitled for 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 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 principal amount of Defaulted Securities exceeds 10% of the
aggregate principal amount of Offered 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, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter to the Company except as provided in Section 6.
15
<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.]
[9.][10.]Miscellaneous: Notice given pursuant to any of the provisions of
this Agreement shall be in writing and shall be mailed or delivered (a) to the
Company at its principal executive offices, located at Terrace Tower II, 5619
DTC Parkway, Englewood, Colorado 80111-3000, Attention: Chief Financial Officer,
or (b) to you at ____________, attention of: . Any notice under Section
8 hereof may be made by facsimile transmission or telephone, but if so made
shall be subsequently confirmed in writing.
This Agreement has been and is 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. 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 shall be governed by and construed in accordance with the
internal laws of the State of New York.
16
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriters.
Very truly yours,
TELE-COMMUNICATIONS, INC.
By:___________________________
Name:
Title:
Confirmed and Accepted,
as of the date first above written:
By:___________________________________
Name:
Title:
17
<PAGE>
EXHIBIT A
DEBT SECURITIES
Designation:
Issue Date:
Maturity [and provisions for extension, if any]:
Authorized Denominations:
[Interest rate (or method of computation), Interest Payment Dates and Record
Dates or, if Original Discount Securities, issue price and yield to maturity:]
[Sinking Fund:]
[Optional Redemption:]
[Provisions for purchase or exchange at option of the Holder or the Company:]
[Conversion price or conversion rate, conversion period and
other terms of conversion:]
[Exchange price or exchange rate, exchange period and
other terms of exchange:]
[Other specific terms:]
<PAGE>
EXHIBIT B
Principal Amount
Underwriters of Offered Securities
- ------------ ---------------------
<PAGE>
EXHIBIT 4.1
================================================================================
TELE-COMMUNICATIONS, INC.
and
Trustee
______________
Indenture
Dated as of
______________
Debt Securities
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION(S)
<S> <C>
310 (a)(1)............................................. 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.10
(b)................................................ 7.08; 7.10; 10.02
(c)................................................ N.A.
311 (a)................................................ 7.11
(b)................................................ 7.11
(c)................................................ N.A.
312 (a)................................................ 2.07
(b)................................................ 10.03
(c)................................................ 10.03
313 (a)................................................ 7.06
(b)(1)............................................. N.A.
(b)(2)............................................. 7.06
(c)................................................ 10.02
(d)................................................ 7.06
314 (a)................................................ 4.05; 4.06; 10.02
(b)................................................ N.A.
(c)(1)............................................. 10.04
(c)(2)............................................. 10.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 10.05
(f)................................................ N.A.
315 (a)................................................ 7.01(b)
(b)................................................ 7.05; 10.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
316 (a)(last sentence)................................. 10.06
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
317 (a)(1)............................................ 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.06
318 (a)............................................... 10.01
</TABLE>
___________
N.A. means not applicable.
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.......................................................... 1
Section 1.02. Other Definitions.................................................... 6
Section 1.03. Incorporation by Reference of Trust Indenture Act.................... 6
Section 1.04. Rules of Construction................................................ 7
ARTICLE II
THE SECURITIES
Section 2.01. Forms Generally...................................................... 7
Section 2.02. Amount Unlimited; Issuable in Series................................. 8
Section 2.03. Denominations........................................................ 12
Section 2.04. Execution, Authentication, Delivery and Dating....................... 13
Section 2.05. Registrar, Paying Agent, Conversion Agent and Authenticating Agent... 16
Section 2.06. Paying Agent to Hold Money and Securities in Trust................... 18
Section 2.07. Securityholder Lists................................................. 18
Section 2.08. Transfer and Exchange................................................ 18
Section 2.09. Replacement Securities............................................... 23
Section 2.10. Securities in Global Form............................................ 24
Section 2.11. Temporary Securities................................................. 25
Section 2.12. Cancellation......................................................... 25
Section 2.13. Payment of Interest; Defaulted Interest.............................. 26
Section 2.14. Persons Deemed Owners................................................ 27
Section 2.15. CUSIP Numbers........................................................ 28
ARTICLE III
REDEMPTION
Section 3.01. Applicability of Article............................................. 28
Section 3.02. Notices to Trustee................................................... 28
Section 3.03. Selection of Securities to be Redeemed............................... 29
Section 3.04. Notice of Redemption................................................. 30
Section 3.05. Effect of Notice of Redemption....................................... 31
Section 3.06. Deposit of Redemption Price.......................................... 32
Section 3.07. Securities Redeemed in Part.......................................... 32
Section 3.08. Conversion or Exchange Arrangement on Call for Redemption............ 32
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IV
COVENANTS
Section 4.01. Payment of Securities; Maintenance of Office or Agency................. 33
Section 4.02. SEC Reports............................................................ 35
Section 4.03. Compliance Certificate................................................. 35
Section 4.04. Corporate Existence.................................................... 36
Section 4.05. Waiver of Certain Covenants............................................ 36
Section 4.06. No Lien Created........................................................ 36
Section 4.07. Calculation of Original Issue Discount................................. 36
ARTICLE V
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc............................................ 37
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.02. Acceleration........................................................... 38
Section 6.03. Other Remedies......................................................... 39
Section 6.04. Waiver of Existing Defaults............................................ 39
Section 6.05. Control by Majority.................................................... 40
Section 6.06. Limitation on Suits.................................................... 40
Section 6.07. Rights of Holders to Receive Payment and to Convert or Exchange........ 40
Section 6.08. Collection Suit by Trustee............................................. 41
Section 6.09. Trustee May File Proofs of Claim....................................... 41
Section 6.10. Priorities............................................................. 41
Section 6.11. Undertaking for Costs.................................................. 41
ARTICLE VII
TRUSTEE
Section 7.01. Duties of Trustee...................................................... 42
Section 7.02. Rights of Trustee...................................................... 43
Section 7.03. Individual Rights of Trustee........................................... 43
Section 7.04. Trustee's and Authenticating Agent's Disclaimer........................ 44
Section 7.05. Notice of Defaults..................................................... 44
Section 7.06. Reports by Trustee to Holders.......................................... 44
Section 7.07. Compensation and Indemnity............................................. 44
</TABLE>
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<TABLE>
<S> <C>
Section 7.08. Replacement of Trustee.............................. 45
Section 7.09. Successor Trustee by Merger, etc.................... 46
Section 7.10. Eligibility; Disqualification....................... 46
Section 7.11. Preferential Collection of Claims Against Company... 46
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.02. Application of Trust Fund........................... 48
Section 8.03. Repayment to Company................................ 48
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.......................... 48
Section 9.02. With Consent of Holders............................. 49
Section 9.03. Compliance with Trust Indenture Act................. 51
Section 9.04. Effect of Amendments and Supplements................ 51
Section 9.05. Notation on or Exchange of Securities............... 51
Section 9.06. Trustee to Sign Amendments, etc..................... 51
ARTICLE X
MISCELLANEOUS
Section 10.02. Notices............................................. 52
Section 10.03. Communication by Holders with Other Holders......... 53
Section 10.04. Certificate and Opinion as to Conditions Precedent.. 54
Section 10.05. Statements Required in Certificate or Opinion....... 54
Section 10.06. When Treasury Securities Disregarded................ 55
Section 10.07. Rules by Trustee and Agents......................... 55
Section 10.08. Legal Holidays...................................... 55
Section 10.09. Governing Law....................................... 55
Section 10.10. No Adverse Interpretation of Other Agreements....... 55
Section 10.11. No Recourse Against Others.......................... 55
Section 10.12. Successors.......................................... 56
Section 10.13. Duplicate Originals................................. 56
Section 10.14. Table of Contents, Headings, etc.................... 56
Section 10.15. Acts of Holders..................................... 56
</TABLE>
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<TABLE>
<S> <C>
ARTICLE XI
MEETINGS OF HOLDERS OF SECURITIES
Section 11.02. Call, Notice and Place of Meetings..................................... 58
Section 11.03. Persons Entitled to Vote at Meetings................................... 59
Section 11.04. Quorum; Action......................................................... 59
Section 11.05. Determination of Voting Rights; Conduct and Adjournment of Meetings.... 60
Section 11.06. Counting Votes and Recording Action of Meetings........................ 61
</TABLE>
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INDENTURE dated as of between TELE-COMMUNICATIONS,
INC., a Delaware corporation ("Company"), and , a ("Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes, bonds or other evidences of indebtedness ("Securities"), to
be issued in one or more series as provided in this Indenture.
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the respective Holders from time to time of
the Securities or of series thereof:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
Additional Amounts means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
Affiliate of any person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person.
Agent means any Registrar, co-Registrar, Paying Agent, Conversion
Agent or Exchange Agent. See Section 2.05.
Authenticating Agent means any person authorized by the Trustee
pursuant hereto to act on behalf of the Trustee to authenticate Securities of
one or more series.
Authorized Newspaper means a newspaper, in the English language or in
an official language of the place of publication, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements in and each case on any day that is a Business Day in the
place of publication.
Bearer Security means any Security which is established pursuant to
this Indenture which is payable to bearer.
Board of Directors means the Board of Directors of the Company or any
authorized committee thereof.
<PAGE>
Business Day, except as may otherwise be provided in the form of
Securities of any particular series, means, with respect to any place of payment
or other location, each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a Legal Holiday in such place of payment or other location.
Company means Tele-Communications, Inc., a Delaware corporation, until
a successor replaces it pursuant to the applicable provisions of this Indenture
and thereafter means the successor.
Company Stock means the Tele-Communications, Inc. Common Stock, $1.00
par value, in such series as the same exists on the date of this Indenture or
hereafter and any other capital stock into which such Common Stock may
thereafter have been changed.
coupon means any interest coupon appertaining to a Bearer Security.
Debt means, with respect to any person: (1) any indebtedness of such
person (i) for borrowed money or (ii) evidenced by a note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any property or assets, including securities; (2) any guarantee
by such person of any indebtedness of others described in the preceding clause
(1); and (3) any amendment, renewal, extension or refunding of any such
indebtedness or guarantee.
Default means any event which is, or after notice or passage of time
would be, an Event of Default.
Dollar or $ or U.S. Dollar means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts.
Foreign Person shall have the meaning given to such term in Section
1.1441-1(c)(2) of the Treasury Regulations.
Government Obligations, with respect to any Security, means (i) direct
obligations of the government or governments which issued the currency in which
the principal of or any interest on such Security or any Additional Amounts in
respect thereof shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of such government or
governments or (ii) obligations of a person controlled or supervised by and
acting as an agency or instrumentality of such government or governments, in
each case where the payment or payments thereunder are unconditionally
guaranteed as a full faith and credit obligation by such government or
governments, and which, in the case of (i) or (ii), are not callable or
redeemable at the option of the issuer or issuers thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of or other amount with respect to any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the
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<PAGE>
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.
Holder or Securityholder means, when used with respect to any
Security, in the case of a Registered Security the person in whose name the
Security is registered in the security register and in the case of a Bearer
Security the bearer thereof and, when used with respect to any coupon, means the
bearer thereof.
Indenture means this Indenture as amended or supplemented from time to
time and, unless the context indicates otherwise, shall include the form and
terms of a particular series of Securities established as contemplated
hereunder.
interest, when used with respect to an Original Issue Discount
Security which by its terms bears interest only after maturity or upon default
in any other payment due on such Security, means interest payable after maturity
or upon such a default, as the case may be.
Interest Payment Date means the date, if any, specified in the
Securities of any series or a coupon representing an installment of interest as
the fixed date on which an installment of interest on the Securities of that
series or such coupon is due and payable.
Lien means any mortgage, pledge, lien, security interest, or other
similar encumbrance.
Officer means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
Officers' Certificate means a certificate signed by two Officers or by
an Officer and an Assistant Treasurer or an Assistant Secretary of the Company
and delivered to the Trustee. See Sections 10.04 and 10.05.
Opinion of Counsel means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 10.04 and 10.05.
original issue discount of any debt security, including any Original
Issue Discount Security, means the difference between the principal amount of
such debt security and the initial issue price of such debt security (as set
forth, in the case of an Original Issue Discount Security, on the face of such
Security).
Original Issue Discount Security means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon
acceleration of the maturity thereof pursuant to Section 6.02.
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<PAGE>
outstanding, when used with respect to Securities of any series, means
as of the date of determination, all such Securities theretofore authenticated
and delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment, redemption or purchase the Trustee
or any Paying Agent (other than the Company) holds in trust or the Company
(acting as its own Paying Agent) has set aside and segregated in trust on a
maturity date, redemption date, Purchase Date or, if so specified with
respect to the Securities of any series pursuant to Section 2.02 on a date
(or, if so specified, on the Business Day following a date) on which
Securities of such series are to be purchased by the Company pursuant to
any provision thereof providing for such purchase at the option of the
Holder or the Company, money (or securities if permitted by the terms of
such Securities) sufficient to pay Securities and any coupons appertaining
thereto payable on that date;
(iii) Securities with respect to which the Company has terminated its
obligations pursuant to Section 8.01 hereof; provided, however, that such
Securities shall continue to be outstanding for all purposes related to
those obligations that survive such termination as provided in Section 8.01
unless and until they cease to be outstanding in accordance with clauses
(i) or (ii) above or clause (iv) below; and
(iv) Securities which have been paid pursuant to Section 2.09 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
requisite principal amount of outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver or taken any other
action hereunder or whether a quorum is present at a meeting of Holders, and for
the purpose of making the calculations required by TIA (S) 313, (x) the
principal amount of an Original Issue Discount Security that shall be deemed to
be outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.02,
and (y) the principal amount of a Security denominated in a foreign currency or
currencies or composite currency shall be the U.S. Dollar equivalent, determined
as of the date of original issuance of such Security, of the principal amount of
such Security (or, in the case of an Original Issue Discount Security, the U.S.
Dollar equivalent as of such date of original issuance of such Security of the
amount determined as provided in clause (x) above). Subject to the provisions of
Section 10.06, a Security does not cease to be outstanding because the Company
or one of its Affiliates holds the Security.
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<PAGE>
place of payment means, when used with respect to any Security, the
place or places where, subject to the provisions of Section 4.01, the principal
of, or interest on, or any Additional Amounts with respect to such Security are
payable as specified as contemplated by Section 2.02.
Predecessor Securities means, with respect to any Security, every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security, and, for the purpose of this definition, any
Security authenticated and delivered under Section 2.09 in exchange for or in
lieu of a mutilated, lost, destroyed or wrongfully-taken Security or a Security
to which a mutilated, lost, destroyed or wrongfully-taken coupon appertains
shall be deemed to evidence the same debt as the mutilated, lost, destroyed or
wrongfully-taken Security or the Security to which the mutilated, lost,
destroyed or wrongfully-taken coupon appertains, as the case may be.
principal of a debt security, including any Security, means the amount
(including, without limitation, if and to the extent applicable, any premium
and, in the case of an Original Issue Discount Security, any accrued original
issue discount, but excluding interest) that is payable with respect to such
debt security as of any date and for any purpose (including, without limitation,
in connection with any sinking fund, upon any redemption at the option of the
Company, upon any purchase or exchange at the option of the Company or the
holder of such debt security and upon any acceleration of the maturity of such
debt security).
principal amount of a debt security, including any Security, means the
principal amount as set forth on the face of such debt security.
Registered Security means any Security issued pursuant to this
Indenture which is registered in the security register.
Regular Record Date means the date, if any, specified in the
Registered Securities of any series as the record date for the determination of
Securityholders to whom interest is payable on the next succeeding Interest
Payment Date.
SEC means the Securities and Exchange Commission.
Securities means the Securities that are issued from time to time in
one or more series under this Indenture as such Securities are amended or
supplemented from time to time.
Subsidiary means any corporation, association, partnership or other
business entity of which a majority of the total voting power of the capital
stock or other interests (including partnership interests) entitled (without
regard to the occurrence of a contingency) to vote in the election of directors,
managers, or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) the Company, (ii) the Company and one or more of its
Subsidiaries or (iii) one or more Subsidiaries of the Company.
TIA means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa-
77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
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<PAGE>
Trustee means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor and if at any time
there is more than one such party, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
Trust Officer means any officer or assistant officer in the corporate
trust department of the Trustee assigned by the Trustee to administer its
corporate trust matters.
United States, except as otherwise provided in or pursuant to this
Indenture, means the United States of America (including the States and the
District of Columbia), its territories, its possessions and other areas subject
to its jurisdiction.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
TERM DEFINED IN SECTION
<S> <C>
Act 10.15
Bankruptcy Law 6.01
Code 9.01
Conversion Agent 2.05
Custodian 6.01
Event of Default 6.01
Exchange Agent 2.05
Legal Holiday 10.08
Paying Agent 2.05
Registrar 2.05
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
Commission means the SEC.
indenture securities means the Securities.
indenture security holder means a Securityholder.
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<PAGE>
indenture to be qualified means this Indenture.
indenture trustee or institutional trustee means the Trustee.
obligor on the indenture securities means the Company and any other
obligor thereon.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect
on the date of this Indenture;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and in the plural
include the singular.
ARTICLE II
THE SECURITIES
Section 2.01. Forms Generally.
The Securities of each series may be issued as Registered Securities
without coupons attached, or Bearer Securities with or without coupons attached,
or both, and may be issued in whole or in part in the form of one or more global
Securities as shall be specified as contemplated by Section 2.02. In the absence
of any contrary provisions with respect to the Securities of any series, the
Securities shall be issued as Registered Securities and shall not be issuable
upon the exercise of warrants. Bearer Securities shall be issued with coupons
attached unless otherwise provided with respect to the Securities of any series
as contemplated by Section 2.02.
The Securities of each series (including any temporary global
Securities) and related coupons, if any, shall be in one of the forms
established from time to time by or pursuant to a resolution of the Board of
Directors or in or pursuant to one or more indentures supplemental hereto, which
shall set forth the information required by Section 2.02. The Securities and
coupons, if any, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or by a resolution of the Board of Directors and may have such
notations, legends or endorsements as the Company may deem appropriate and as
are not
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<PAGE>
inconsistent with the provisions of this Indenture, or as may be required by
law, stock exchange rule or usage. The Company shall approve the form or forms
of Securities and any coupons appertaining thereto and any notation, legend or
endorsement on them. If the form or forms of Securities of any series or coupons
are established by action taken pursuant to a resolution of the Board of
Directors or indenture supplemental hereto, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the written
order of the Company contemplated by Section 2.04 for the authentication and
delivery of such Securities or coupons.
Subject to Section 2.05, the form of the Trustee's certificate of
authentication to be borne by the Securities shall be substantially as follows:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
, as Trustee
By________________________________
Authorized Signatory
Section 2.02. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution of the Board of Directors or
established in or pursuant to one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of Securities of the series (which shall distinguish
Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 2.08, 2.09, 2.11, 3.07 or 9.05 and except for
any Securities which pursuant to Section 2.04 are deemed not to have been
authenticated and delivered hereunder);
(3) (A) whether Securities of the series are issuable as Registered
Securities, as Bearer Securities or alternatively as Bearer Securities and
Registered Securities, and whether the Bearer Securities are to be issuable
with coupons, without coupons or both; (B) any restrictions applicable to
the offer, sale or delivery of Bearer Securities and the terms upon which
Bearer Securities of the series may be exchanged for Registered Securities
of the
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series and vice versa (if permitted by applicable laws and regulations);
(C) whether any of the Securities of the series are to be issuable in
global form and, if so, (i) the identity of the depositary with respect to
any such global Security and (ii) whether beneficial owners of interests in
any such global Security may exchange such interests for Securities of the
same series and of like tenor and of any authorized form and denomination,
and, if so, the circumstances under which and the manner in which any such
exchanges may occur, if other than as specified in Section 2.08; (D) if any
of the Securities of the series are to be issuable as Bearer Securities or
in global form, the date as of which any such Bearer Security or global
Security shall be dated (if other than the date of original issuance of the
first of such Securities to be issued); and (E) if Securities of the series
are to be issuable in definitive form (whether upon original issue, upon
exchange of a temporary Security of such series, or in exchange for a
beneficial ownership interest in a permanent global Security) only upon
receipt of certain certificates or other documents or satisfaction of other
conditions, or if Securities of the series are initially issuable in
temporary global form and if owners of beneficial interests therein may
exchange such interest for an interest in a permanent global Security only
upon receipt of certain certificates or other documents or satisfaction of
other conditions, then the form and/or terms of such certificates,
documents or conditions;
(4) (A) the person to whom any interest on any Registered Security of
the series shall be payable, if other than the person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest; (B) the manner in
which, or the person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature; and (C) if
any Securities of the series are to be issuable as Bearer Securities, the
extent to which, or the manner in which, and the terms and conditions
(including certification requirements) upon which, any interest in respect
of any portion of a temporary Bearer Security in global form payable in
respect of an Interest Payment Date prior to the exchange of such temporary
global Security for a permanent global Security or for definitive
Securities of the series will be paid to any clearing organization with
respect to the portion of such temporary global Security held for its
account and, in such event, the terms and conditions (including
certification requirements) upon which any such interest payment received
by a clearing organization will be credited to the persons entitled to
interest payable on such Interest Payment Date, and any other requirements
in addition to or in lieu of those provided herein relating to the payment
of interest on or any Additional Amounts in respect of Bearer Securities;
(5) the date or dates (and whether fixed or extendible) on which the
principal of Securities of the series is payable;
(6) the rate or rates at which Securities of the series shall bear
interest, or the method of determining the same, if any, the date or dates
from which such interest shall accrue, or the method of determining the
same, if any, the Interest Payment Dates on which any such interest shall
be payable and the Regular Record Date for any interest payable on
9
<PAGE>
any Registered Securities on any Interest Payment Date, whether and under
what circumstances Additional Amounts on Securities of the series or any of
them shall be payable, and the basis upon which interest will be calculated
if other than that of a 360-day year of twelve 30-day months;
(7) the place or places where, subject to Section 4.01, the principal
of, any interest on or any Additional Amounts payable in respect of
Securities of the series shall be payable, any Registered Securities of the
series may be surrendered for registration of transfer, any Securities of
the series may be surrendered for exchange and notices and demands to or
upon the Company in respect of the Securities of the series and this
Indenture may be served;
(8) any provisions relating to the issuance of Securities of such
series at an original issue discount (including, without limitation, the
issue price thereof, the rate or rates at which such original issue
discount shall accrue, if any, and the date or dates from or to which or
period or periods during which such original issue discount shall accrue at
such rate or rates);
(9) the price or prices at which, the period or periods within which
and the terms and conditions upon which Securities of the series may be
redeemed or otherwise purchased, in whole or in part, at the option of the
Company, pursuant to any sinking fund or otherwise (including, without
limitation, the form or method of payment thereof if other than in cash);
(10) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Securityholder thereof and the price or
prices at which and the period or periods within which and the terms and
conditions upon which Securities of the series shall be redeemed, purchased
or repaid, in whole or in part, pursuant to such obligation (including,
without limitation, the form or method of payment thereof if other than in
cash);
(11) the currency or currencies, including composite currencies, in
which payment of the principal of, any interest on and any Additional
Amounts payable in respect of the Securities of the series shall be
payable, or in which the Securities of the series shall be denominated, if
other than Dollars;
(12) if the principal of, any interest on or any Additional Amounts
payable in respect of the Securities of the series is to be payable, at the
election of the Company or a Securityholder, in a currency or currencies,
including composite currencies, other than that in which the Securities of
such series are denominated or stated to be payable, the terms and
conditions upon which such election may be made and the method for
determining amounts payable;
10
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(13) if the amount of payments of principal of or interest on the
Securities of the series may be determined with reference to an index,
formula or other method or methods (which index, formula, method or methods
may be based, without limitation, on one or more currencies, commodities,
equity indices or other indices), the terms and conditions upon which and
the manner in which such amounts shall be determined and paid or payable;
(14) the denominations in which any Registered Securities of the
series shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which Bearer Securities
of the series shall be issuable if other than denominations of $5,000;
(15) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
acceleration of the maturity thereof pursuant to Section 6.02 or provable
in bankruptcy pursuant to Section 6.09, or, if applicable, which is
convertible or exchangeable;
(16) any Events of Default with respect to the Securities of a
particular series in lieu of or in addition to those set forth herein and
the remedies therefor;
(17) the obligation, if any, of the Company to permit the conversion
of Securities of such series into Company Stock and the terms and
conditions upon which such conversion shall be effected (including, without
limitation, the initial conversion price or rate, adjustments to the
conversion price or rate, the conversion period and any other provision
relative to such obligation);
(18) the obligation, if any, of the Company to permit the exchange of
Securities of such series into other securities (whether or not issued by,
or the obligation of, the Company) or a combination of cash, other
securities and/or property, and the terms and conditions upon which such
exchanges shall be effected (including, without limitation, the initial
exchange price or rate, adjustments to the exchange price or rate, the
exchange period and any other provision relative to such obligation);
(19) if any Securities of the series are to be issuable upon the
exercise of warrants, this shall be so established and (if established by
resolution of the Board of Directors) so set forth, as well as the time,
manner and place for such Securities to be authenticated and delivered;
(20) if there is more than one Trustee, the identity of the Trustee
and, if not the Trustee, the identity of each Registrar, Paying Agent,
Conversion Agent or Exchange Agent with respect to the Securities of the
series; and
(21) whether, and the terms and conditions relating to when, the
Company may satisfy certain of its obligations with respect to such
Securities with regard to payment upon
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maturity, or any redemption or required repurchase, or in connection with
any exchange provisions by delivery to the Holders thereof securities
(whether or not issued by, or the obligation of, the Company) or a
combination of cash, other securities and/or property.
(22) any other terms of a particular series including any terms which
may be required by or advisable under United States or applicable foreign
laws or regulations or advisable in connection with the marketing or
remarketing of Securities of that series, and any other provisions
expressing or referring to the terms and conditions upon which the
Securities of that series are to be issued under this Indenture, which
terms and provisions are not in conflict with the provisions of this
Indenture; provided, however, that the addition to or subtraction from or
variation of Articles IV, V, VI and VIII (and Sections 1.01 and 1.02,
insofar as they relate to the definition of certain terms as used in such
Articles) with regard to the Securities of a particular series shall not be
deemed to constitute a conflict with the provisions of those Articles.
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such resolution of the Board of Directors or in any
such indenture supplemental hereto. Not all Securities of any one series need be
issued at the same time, and, unless otherwise so provided, a series may be
reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of a series are established by action
taken pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee with an Officers' Certificate setting forth the terms
or the manner of determining the terms of the Securities of such series. With
respect to Securities of a series which are not to be issued at one time, such
resolution of the Board of Directors or action may provide general terms or
parameters for Securities of such series and provide either that the specific
terms of particular Securities of such series shall be specified in a written
order of the Company or that such terms shall be determined by the Company or
its agents in accordance with a written order of the Company as contemplated by
the last sentence of the fourth paragraph of Section 2.04.
Section 2.03. Denominations.
Unless otherwise provided as contemplated by Section 2.02 with respect to
any series of Securities and except as provided in Section 2.10, any Registered
Securities of a series denominated in Dollars shall be issuable in denominations
of $1,000 and any integral multiple thereof and any Bearer Securities of a
series denominated in Dollars shall be issuable in the denomination of $5,000.
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Section 2.04. Execution, Authentication, Delivery and Dating.
Two Officers shall sign the Securities for the Company. The Company's seal
shall be reproduced on the Securities. An Officer shall sign the coupons
attached to any Bearer Security for the Company. The signature of any Officer on
the Securities or any coupons appertaining thereto may be manual or facsimile.
If an Officer whose signature is on a Security or a coupon no longer holds
that office at the time the Trustee authenticates such Security, the Security
and coupon shall be valid nevertheless.
A Security or coupon shall not be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose until the certificate of
authentication on the Security is manually signed by the Trustee or on its
behalf by an Authenticating Agent. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture. Notwithstanding
the foregoing, if any Security shall have been duly authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
2.12 together with a written statement (which need not comply with Sections
10.04 and 10.05 and need not be accompanied by an Opinion of Counsel) stating
that such Security has not been issued and sold by the Company, for all purposes
of this Indenture such Security shall be deemed not to have been authenticated
and delivered hereunder and shall not be entitled to the benefits of this
Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series together with any
coupon appertaining thereto executed by the Company to the Trustee for
authentication, and the Trustee shall, subject to the provisions hereof and of
such Securities, authenticate said Securities and deliver said Securities and
any coupons appertaining thereto to or upon the written order of the Company,
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company, without any further action by the Company. Unless otherwise specified
as contemplated by Section 2.02, no Bearer Security shall be mailed or otherwise
delivered to any location in the United States. Further, a Bearer Security
(including a permanent global Bearer Security) may be delivered only if all
applicable certifications and other requirements specified as contemplated by
Section 2.02 with respect to the Securities of or within such series have been
satisfied with respect to such Bearer Security (or, if applicable, a Predecessor
Security). Except as permitted by Section 2.09, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and cancelled. If not all the
Securities of a series are to be issued at one time and if the resolution of the
Board of Directors or indenture supplemental hereto establishing such series as
contemplated by Sections 2.01 and 2.02 shall so permit, the written order of the
Company may set forth procedures acceptable to the Trustee for the issuance of
such Securities and for determining the form of terms of particular Securities
of such series including, but not limited to, interest rate, maturity date, date
of issuance and date from which interest shall accrue.
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If the form or forms or terms of Securities of the series and any related
coupons have been established in or pursuant to one or more resolutions of the
Board of Directors or indentures supplemental hereto as permitted by Sections
2.01 and 2.02, in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form or forms of such Securities and any coupons have been
established by or pursuant to a resolution of the Board of Directors or
indenture supplemental hereto, that such form or forms have been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities and any coupons have been
established by or pursuant to a resolution of the Board of Directors or
indenture supplemental hereto, that such terms have been established in
conformity with the provisions of this Indenture; and
(3) that such Securities together with any coupons appertaining
thereto, when authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights, to general equitable principles and to such other
qualifications as such counsel shall conclude do not materially affect the
rights of Holders of such Securities and any coupons;
provided, however, that, with respect to Securities of a series which are not to
be issued at one time, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the opinions described in clauses (2) and (3)
above may state, respectively,
(a) that, when the terms of such Securities and any coupons shall
have been established pursuant to a written order of the Company or
pursuant to such procedures as may be specified from time to time by a
written order of the Company, all as contemplated by and in accordance with
a resolution of the Board of Directors or an Officers' Certificate pursuant
to a resolution of the Board of Directors or indenture supplemental hereto,
as the case may be, such terms will have been established in conformity
with the provisions of this Indenture; and
(b) that such Securities and any coupons appertaining thereto, when
(i) executed by the Company, (ii) completed, authenticated and delivered by
the Trustee in accordance with this Indenture, (iii) issued and delivered
by the Company and (iv) paid for, all as contemplated by and in accordance
with the aforesaid written order of the Company or specified procedures, as
the case may be, and in the manner and subject to any conditions
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specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization and other laws of general applicability relating to or
affecting the enforcement of creditors' rights, to general equitable
principles and to such other qualifications as such counsel shall conclude
do not materially affect the rights of Holders of such Securities and any
coupons.
Notwithstanding the provisions of Sections 2.01, 2.02, 10.04 and this
Section, if all the Securities of a series are not to be originally issued at
one time, the resolution of the Board of Directors or indenture supplemental
hereto, the certified copy of the record of action taken pursuant to such
resolution or supplemental indenture, the Officers' Certificate, the written
order of the Company and any other documents otherwise required pursuant to such
Sections need not be delivered at or prior to the time of authentication of each
Security of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to be
issued, provided, however, that any subsequent request by the Company to the
Trustee to authenticate Securities of such series shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate delivered pursuant to Section
10.04 at or prior to authentication of the first such Security shall be true and
correct on the date thereof as if made on and as of the date thereof.
The Trustee shall have the right to decline to authenticate and make
available for delivery any Securities together with any coupons appertaining
thereto under this Section if the issuance of such Securities pursuant to this
Indenture will alter the Trustee's own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.
With respect to Securities of a series which are not all issued at one
time, the Trustee may conclusively rely, as to the authorization by the Company
of any of such Securities and any coupons, the form and terms thereof and the
legality, validity, binding effect and enforceability thereof, upon the Opinion
of Counsel, Officers' Certificate and other documents delivered pursuant to
Sections 2.01, 2.02, 10.04 and this Section, as applicable, at or prior to the
time of the first authentication of Securities of such series unless and until
such opinion, certificate or other documents have been superseded or revoked. In
connection with the authentication and delivery of Securities of a series and
any coupons which are not all issued at one time, the Trustee shall be entitled
to assume that the Company's instructions to authenticate and deliver such
Securities do not violate any rules, regulations or orders of any governmental
agency or commission having jurisdiction over the Company.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security (including any temporary Bearer Security in global form)
shall be dated as of the date specified as contemplated by Section 2.02.
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Section 2.05. Registrar, Paying Agent, Conversion Agent and Authenticating
Agent.
The Company shall maintain an office or agency where Registered Securities
of each series may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities of each series may be
presented for payment ("Paying Agent"), an office or agency where Securities of
each series that is convertible may be presented for conversion ("Conversion
Agent") and an office or agency where Securities of each series that is
exchangeable may be presented for exchange ("Exchange Agent") and (but without
duplication) such offices or agencies in such locations and for such purposes as
may be required as contemplated by Section 4.01. The Registrar shall keep a
register of the Registered Securities of each series issued hereunder and of
their transfer and exchange. The Company may have one or more co-Registrars
(provided that there shall be only one register, which shall be maintained by
the principal Registrar), one or more additional paying agents one or more
additional conversion agents and one or more additional exchange agents with
respect to any series. The term "Paying Agent" includes any additional paying
agent, the term "Conversion Agent" includes any additional conversion agent and
the term "Exchange Agent" includes any additional exchange agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall promptly notify the
Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent or Exchange Agent, the
Trustee shall act as such.
The Company initially appoints the Trustee Registrar and Paying Agent for
each series and Conversion Agent for any series that is convertible and Exchange
Agent for any series that is exchangeable.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
or upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 2.09 and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and
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surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in the case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give written notice of
such appointment to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve in the manner and to the extent
provided in Section 10.02. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment of an Authenticating Agent with respect to one or more
series is made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
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CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein and referred to in
the within-mentioned Indenture.
, as Trustee
By:_____________________________
As Authenticating Agent
By:_____________________________
Authorized Signatory
Section 2.06. Paying Agent to Hold Money and Securities in Trust.
Prior to each due date of a principal payment in respect of any Security,
the Company shall deposit with the Paying Agent a sum of money or securities
sufficient to make such payment when so becoming due. Each Paying Agent shall
hold in trust for the benefit of Securityholders of the relevant series or the
Trustee all money and securities held by the Paying Agent for the payment of any
amount in respect of the Securities of such series, and shall notify the Trustee
of any default by the Company in making any such payment. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate such money and securities
and hold them as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money and securities held by it to the Trustee and
account for any funds or securities disbursed. Upon doing so, the Paying Agent
shall have no further liability for the money or securities.
Section 2.07. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall furnish
to the Trustee on or before either (1) April 1 and October 1 in each year in the
case of Original Issue Discount Securities of any series which by their terms do
not bear interest prior to maturity (other than upon a default in any payment
upon such a Security) or (2) the Interest Payment Date for Securities of any
other series, but in no event less frequently than semi-annually, and at such
other times as the Trustee may request in writing a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
Securityholders included in the security register.
Section 2.08. Transfer and Exchange.
Upon presentation for registration of transfer of a Registered Security of
any series at the office or agency of the Company maintained for such purposes
in a place of payment for such series,
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the Company shall execute and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding
and containing identical terms and provisions. Notwithstanding any other
provision of this Section, unless and until it is exchanged in whole or in part
for Securities in definitive form, a global Security representing all or a
portion of the Securities of or within a series may not be transferred except as
a whole by the depositary for such series to a nominee of such depositary or by
a nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor depositary
for such series or a nominee of such successor depositary.
At the option of the Holder, Registered Securities of any series (other
than a global Security, except as provided below or as otherwise specified as
contemplated by Section 2.02) may be exchanged for other Registered Securities
of the same series of any authorized denominations and of a like aggregate
principal amount and containing identical terms and provisions, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. Unless otherwise specified with respect to
any series of Securities as contemplated by Section 2.02, Bearer Securities may
not be delivered by the Trustee in exchange for Registered Securities.
If so provided pursuant to Section 2.02 with respect to the Securities of
any series, at the option of the Holder, Bearer Securities of such series (other
than a global Security, except as provided below or as otherwise specified as
contemplated by Section 2.02) may be exchanged for Registered Securities of such
series containing identical terms of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any office or agency maintained by the Company for such purpose in
a place of payment for such series, with all unmatured coupons and all matured
coupons in default thereto appertaining. If the Holder of a Bearer Security is
unable to produce any unmatured coupon or coupons or matured coupon or coupons
in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company in an amount equal to
the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment, provided, however, that, except as otherwise
provided in Section 4.01, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency for such
series in exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency (i) on any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) on any special record date and before the opening
of business at such
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office or agency on the related date for payment of defaulted interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be, and
interest or defaulted interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date of payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon in accordance with the
provisions of this Indenture.
Whenever any Securities are so surrendered for exchange pursuant to the
immediately preceding paragraph, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
Except as otherwise provided with respect to the Securities of any series
as contemplated by Section 2.02, a global Security may be exchanged only as
provided below in this Section.
If at any time the depositary with respect to a global Security
representing all or a portion of the Securities of or within a series notifies
the Company that it is unwilling, unable or ineligible to continue as such
depositary, the Company shall appoint a successor depositary with respect to
such Securities. Unless otherwise provided with respect to a series of
Securities as contemplated by Section 2.02, if a successor depositary is not so
appointed by the Company within 90 days after the Company receives such notice,
the Company will execute and the Trustee, upon receipt of a written order of the
Company as contemplated by Section 2.04 for the authentication and delivery of
definitive Securities of such series (or, if such written order has previously
been delivered, then upon receipt of written instructions from the person or
persons specified in such written order), will authenticate and deliver
Securities of such series in definitive form equal in aggregate principal amount
to the principal amount of the global Security or Securities representing such
series in exchange for such global Security or Securities.
The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more global Securities
shall no longer be represented by such global Security or Securities. In such
event the Company will execute and the Trustee, upon receipt of a written order
of the Company as contemplated by Section 2.04 for the authentication and
delivery of definitive Securities of such series (or, if such written order has
previously been delivered, then upon receipt of written instructions from the
person or persons specified in such written order), will authenticate and
deliver Securities of such series in definitive form equal in aggregate
principal amount to the principal amount of the global Security or Securities
representing such series in exchange for such global Security or Securities.
If a global Security is otherwise exchangeable as specified by the Company
pursuant to Section 2.02(3) with respect to a series of Securities, the
depositary with respect to a global Security representing all or a portion of
the Securities of or within such series may surrender such global Security to
the Trustee, as the Company's agent for such purpose, to be exchanged in whole
or in part for Securities of such series in definitive form in the manner and
under the circumstances so specified and on such terms as are acceptable to the
Company and such depositary. In such event,
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the Company shall execute and the Trustee shall authenticate and deliver or make
available for delivery:
(i) to each person specified by such depositary a new Security or
Securities of the same series and of like tenor, of any authorized form and
denomination as requested by such person in aggregate principal amount
equal to and in exchange for such person's beneficial interest in the
global Security; and
(ii) unless endorsement of the surrendered global Security as
contemplated by Section 2.10 or another procedure is specified for the
Securities of such series as contemplated by Section 2.02, to such
depositary a new global Security in a denomination equal to the difference,
if any, between the principal amount of the surrendered global Security and
the aggregate principal amount of Securities delivered pursuant to clause
(i) above in exchange for beneficial interests in such surrendered global
Security.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
(a) in definitive registered form in authorized denominations if the Securities
of such series are issuable as Registered Securities, (b) in definitive bearer
form in authorized denominations if the Securities of such series are issuable
as Bearer Securities or (c) as either Registered or Bearer Securities, if the
Securities of such series are issuable in either form; provided, however, that
no definitive Bearer Security shall be delivered in exchange for a portion of a
global Security except in compliance with the conditions set forth in Section
2.04 or specified with respect to the Securities of such series as contemplated
by Section 2.02 (including certification requirements and requirements with
respect to delivery outside the United States).
Upon the exchange of a global Security for Securities in definitive form,
such global Security shall be canceled by the Trustee, unless endorsement of the
surrendered global Security as contemplated by Section 2.10 or another
procedure is specified for the Securities of such series as contemplated by
Section 2.02. Registered Securities issued in exchange for a global Security
pursuant to this Section shall be registered in such names and in such
authorized denominations as the depositary for such global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Registered Securities to
the persons in whose names such Securities are so registered. Subject to the
proviso clause of the immediately preceding paragraph, the Trustee shall deliver
Bearer Securities issued in exchange for a global Security pursuant to this
Section to the persons, and in such authorized denominations, as the depositary
for such global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee.
If a Registered Security is issued in exchange for any portion of a global
Security after the close of business at the office or agency where such exchange
occurs (i) on any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) on any special
record date and before the opening of business at such office or agency on the
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related date for payment of defaulted interest, interest or defaulted interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the person to whom interest in respect of
such portion of such global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto.
The Company shall not be required to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (A) if Securities of the series
are issuable only as Registered Securities, the date of the mailing of the
relevant notice of redemption and (B) if Securities of the series are issuable
as Bearer Securities, the date of the first publication of the relevant notice
of redemption or, if Securities of such series are also issuable as Registered
Securities and there is no publication, the date of the mailing of the relevant
notice of redemption. Further, the Company shall not be required to register the
transfer of or exchange any Security selected for redemption or purchase
(except, in the case of Securities to be redeemed or purchased in part, the
portion thereof not to be redeemed or purchased), and the Company shall not be
required to issue, register the transfer of or exchange any Security in respect
of which a notice requiring the purchase or redemption thereof by the Company at
the option of the Holder has been given and not withdrawn by the Holder thereof
in accordance with the terms of such Securities (except, in the case of
Securities to be so purchased or redeemed in part, the portion thereof not to be
so purchased or redeemed); provided, however, that a Bearer Security so selected
for redemption or purchase or in respect of which a notice requiring the
purchase or redemption thereof by the Company at the option of the Holder has
been given and not so withdrawn may, if so provided with respect to the
Securities of such series as contemplated by Section 2.02, be exchanged for a
Registered Security of that series and like tenor, provided that such Registered
Security shall simultaneously be surrendered for redemption or purchase, as the
case may be, with written instructions for payment consistent with the
provisions of this Indenture.
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Section 2.09. Replacement Securities.
If (i) a mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or (ii) the Company and the
Trustee receive evidence to their satisfaction that a Security or coupon
appertaining thereto has been lost, destroyed or wrongfully taken, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them and any Agent harmless, then, in the
absence of notice to the Company or the Trustee that such Security or coupon has
been acquired by a bona fide purchaser, and if the Trustee's requirements are
met, the Company shall execute and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or
Security with a mutilated coupon appertaining to it or to which a lost,
destroyed or wrongfully-taken coupon appertains (with all appurtenant coupons
not lost, destroyed or wrongfully taken) or in lieu of any such lost, destroyed
or wrongfully taken Security, a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to the surrendered Security or to the lost, destroyed or
wrongfully-taken Security or to the Security to which such lost, destroyed or
wrongfully-taken coupon appertains, as applicable, provided, however, that
delivery of a Bearer Security shall occur only outside the United States.
In case any such mutilated, lost, destroyed or wrongfully-taken Security or
coupon has become or is about to become due and payable, or is about to be
purchased by the Company pursuant to any provision of the Securities of such
series providing for the purchase thereof at the option of the Holder or the
Company, the Company in its discretion may, instead of issuing a new Security,
pay or purchase such Security or pay such coupon, as applicable; provided,
however, that payment of principal of, any interest on or any Additional Amounts
with respect to any Bearer Securities shall, except as otherwise provided in
Section 4.01, be payable only at an office or agency for Securities of such
series located outside the United States and, unless otherwise provided in or
pursuant to this Indenture, any interest on Bearer Securities and any Additional
Amounts with respect to such interest shall be payable only upon presentation
and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security, with any coupons appertaining thereto, issued pursuant
to this Section in lieu of any lost, destroyed or wrongfully-taken Security, or
in exchange for a Security to which a lost, destroyed or wrongfully-taken coupon
appertains, shall constitute a separate obligation of the Company, whether or
not the lost, destroyed or wrongfully-taken Security and coupons appertaining
thereto or the lost, destroyed or wrongfully-taken coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of such
series and any coupons, if any, duly issued hereunder.
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The provisions of this Section, as amended or supplemented pursuant to this
Indenture with respect to particular Securities or generally, shall be exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, lost, destroyed or
wrongfully-taken Securities or coupons.
Section 2.10. Securities in Global Form.
If the Company shall establish pursuant to Section 2.02 that the Securities
of or within a series are to be issued in whole or in part in global form, then
the Company shall execute, and the Trustee shall, in accordance with Section
2.04 and the written order of the Company contemplated thereby, authenticate and
deliver one or more global Securities in temporary or permanent form that (i)
shall be registered, if in registered form, in the name of the depositary for
such global Security or Securities or the nominee of such depositary, (ii) shall
be delivered by the Trustee to such depositary or pursuant to such depositary's
instructions, and (iii) shall bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
depositary to a nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the depositary or any
such nominee to a successor depositary or a nominee of such successor
depositary." Each depositary designated pursuant to Section 2.02 for a global
Security in registered form must be, to the extent required by applicable law or
regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and any other applicable statute or regulation, at the time of
its designation and at all times that it serves as depositary. Notwithstanding
clause (14) of Section 2.02 and the provisions of Section 2.03, any such global
Security shall represent such of the outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of outstanding Securities of such series from time to time endorsed
thereon and that the aggregate amount of outstanding Securities represented
thereby may from time to time be increased or decreased to reflect exchanges.
Any endorsement of a Security in global form to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
outstanding Securities represented thereby shall be made in such manner and upon
instructions given by such person or persons as shall be specified therein or in
the written order of the Company to be delivered to the Trustee pursuant to
Section 2.04. Subject to the provisions of Section 2.04 and, if applicable,
Section 2.11, the Trustee shall deliver and redeliver any Security in permanent
global form in the manner and upon instructions given by the person or persons
specified therein or in the applicable written order of the Company. If a
written order of the Company pursuant to Section 2.04 has been, or
simultaneously is, delivered, any instructions with respect to a Security in
global form shall be in writing but need not comply with Sections 10.04 and
10.05 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of the third paragraph of Section 2.04
shall apply to any Security represented by a Security in global form if such
Security was never issued and sold by the Company and the Company delivers to
the Trustee the Security in global form together with written instructions
(which need not comply with Sections 10.04 and 10.05 and need not be accompanied
by an Opinion of Counsel) with regard to the reduction in the principal amount
of Securities
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represented thereby, together with the written statement contemplated by the
last sentence of the third paragraph of Section 2.04.
Section 2.11. Temporary Securities.
Pending the preparation of a permanent global Security or definitive
Securities of any series, the Company may execute and the Trustee, upon the
written order of the Company pursuant to Section 2.04, shall authenticate and
deliver temporary Securities. Temporary Securities of any series shall be in
authorized denominations and substantially of the tenor of the definitive
Securities of that series in lieu of which they are issued, in registered form
or, if authorized, in bearer form with one or more coupons or without coupons,
but may have variations that the Company considers appropriate for temporary
Securities. In the case of Securities of any series, such temporary Securities
may be in global form. If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. Except as otherwise specified as contemplated by Section
2.02 with respect to Securities of a series issuable as Bearer Securities, (a)
after the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained for such purpose in a place of
payment for such series, without charge to the Holder, and (b) upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any unmatured coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like aggregate principal amount of definitive Securities of authorized
denominations of the same series and containing identical terms and provisions;
provided, however, that, unless otherwise specified as contemplated by Section
2.02, no definitive Bearer Security shall be delivered in exchange for a
temporary Registered Security and provided, further, that neither a beneficial
interest in a permanent global Security in bearer form nor a definitive Bearer
Security shall be delivered in exchange for a temporary Security except in
compliance with all applicable conditions set forth in Section 2.04 or specified
as contemplated by Section 2.02 (including certification requirements and
requirements with respect to delivery outside the United States). Until so
exchanged, the temporary Securities of any series shall, except as otherwise
specified as contemplated by Section 2.02 (including with respect to the payment
of interest on temporary Securities), in all respects be entitled to the same
benefits under this Indenture as definitive Securities of the same series and of
like tenor authenticated and delivered hereunder.
Section 2.12. Cancellation.
The Company at any time may deliver Securities and all coupons, if any,
appertaining thereto to the Trustee (or to another person for delivery to the
Trustee) for cancellation, including Securities authenticated which the Company
has not issued and sold. The Company and each Agent shall forward to the Trustee
for cancellation any Securities and coupons surrendered to them for transfer,
exchange, payment, redemption, purchase by the Company pursuant to any provision
thereof providing for such purchase at the option of the Holder, or conversion.
The Trustee and no one else shall cancel all Securities and coupons surrendered
for transfer, exchange, payment, redemption,
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purchase, conversion or cancellation, and may dispose of canceled Securities and
coupons as the Company directs, provided, however, that the Trustee shall not be
required to destroy such canceled Securities. Except as otherwise provided in
the resolution of the Board of Directors or indenture supplemental hereto
establishing such series as contemplated by Section 2.02, the Company may not
issue new Securities of a series to replace Securities of the same series that
it has paid or that have been delivered to the Trustee for cancellation.
Section 2.13. Payment of Interest; Defaulted Interest.
Unless otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, interest (except defaulted interest) on any
Registered Security of any series which is payable on any Interest Payment Date
shall be paid to the Holder in whose name that Security (or one or more
Predecessor Securities) is registered on the security register at the close of
business on the Regular Record Date for such interest payment. At the option of
the Company, payment of interest on any Registered Security may be made (i) by
check mailed to the address of the person entitled thereto as such address
appears in the security register, or (ii) if so specified with respect to the
Securities of such series as contemplated by Section 2.02, by wire transfer to
an account designated by such person.
Unless otherwise provided with respect to the Securities of any series as
contemplated by Section 2.02, if the Company defaults in a payment of interest
on the Registered Securities of any series on any Interest Payment Date, it
shall pay the defaulted interest to the persons who are Securityholders of such
series at the close of business on a subsequent special record date. The
Company shall fix the record date and payment date. At least 15 days before the
record date, the Company shall mail to each Securityholder of such series a
notice that states the record date, the payment date and the amount of defaulted
interest to be paid. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment, and at the same time the
Company shall deposit with the Paying Agent an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted interest or
shall make arrangements satisfactory to the Paying Agent for such deposit prior
to the date of the proposed payment. The Company may pay defaulted interest in
any other lawful manner.
Unless otherwise provided with respect to the Registered Securities of any
series as contemplated by Section 2.02, in the case of any Registered Security
of any series which is converted after any Regular Record Date and on or prior
to the next succeeding Interest Payment Date (other than any Registered Security
which is due and payable prior to such Interest Payment Date), interest which is
due and payable on such Interest Payment Date shall be payable on such Interest
Payment Date notwithstanding such conversion, and such interest shall be paid to
the Holder in whose name that Registered Security is registered at the close of
business on such Regular Record Date.
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If any Bearer Security of a series is surrendered in exchange for a
Registered Security of such series at an office or agency maintained by the
Company for such purpose in a place of payment for such series after the close
of business at such office or agency (i) on any Regular Record Date and before
the opening of business at such office or agency on the relevant Interest
Payment Date or (ii) on any special record date and before the opening of
business at such office or agency on the related date for payment of defaulted
interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date of payment, as the case may be,
and interest or defaulted interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date of payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Unless otherwise specified with respect
to the Securities of any series pursuant to Section 2.02, any interest due on
any Bearer Security on or before the maturity thereof, and any Additional
Amounts payable with respect to such interest, shall be payable only upon
presentation of the coupons appertaining thereto for such interest as they
severally mature. Unless otherwise specified with respect to the Securities of
any series pursuant to Section 2.02, at the option of the Company, payment of
interest on any Bearer Security may be made by check (provided the same is not
mailed to an address inside the United States) or by wire transfer to an account
located outside the United States maintained by the payee.
Section 2.14. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of, and (subject to Sections 2.08 and 2.13) interest on and any
Additional Amounts with respect to, such Registered Security and for all other
purposes whatsoever, whether or not any payment with respect to such Registered
Security shall be overdue, and neither the Company, nor the Trustee or any agent
of the Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security or the bearer of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and all other purposes whatsoever, whether
or not any payment with respect to such Security or coupon shall be overdue, and
neither the Company, nor the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such global Security, and such depositary (or its nominee, if such global
Security is in registered form and is registered in the name of a nominee) may
be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the owner of such global Security for all purposes whatsoever;
provided, however, that, if so
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specified as contemplated by Section 2.02, the Company, the Trustee and any
agent of the Company or the Trustee shall, to the extent so specified, treat the
clearing organization or organizations for whose account a portion of a
permanent global Security in bearer form is held by the depositary thereof as
the owner of the applicable portion of such global Security. None of the
Company, the Trustee, any Paying Agent or the Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to such
global Security or impair, as between such depositary and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
Section 2.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if the Company does so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any changes in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
Section 3.01. Applicability of Article.
Securities of any series which are redeemable before their stated maturity
at the election of the Company or through the operation of any sinking fund for
the retirement of Securities of such series shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
2.02 for Securities of any series) in accordance with this Article.
Section 3.02. Notices to Trustee.
If the Company elects to redeem all or less than all the Securities of any
series, it shall notify the Trustee of the redemption date, the principal amount
of Securities to be redeemed, the specific provision of the Securities pursuant
to which the Securities being called for redemption are being redeemed and the
redemption price. In the case of any redemption of Securities prior to the
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expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction. If
the Company wants to make any permitted optional sinking fund payment, it shall
notify the Trustee of the principal amount of the Securities to be redeemed.
The Company (1) may deliver outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which (i) have been redeemed or
otherwise purchased either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities or (ii) have been converted
pursuant to the terms of such Securities, in each case in satisfaction of all or
any part of any sinking fund payment required to be made pursuant to the terms
of the Securities of such series as provided for by the terms of such series;
provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
redemption price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. The Company shall notify the Trustee of its intention to so reduce
the amount of such sinking fund payment, the amount of the reduction and the
basis for it. The Company shall deliver to the Trustee with such notice any
Securities to be credited for such purpose that it has not previously delivered
to the Trustee for cancellation.
The Company shall give each notice and Officers' Certificate provided for
in this Section at least 60 days before the redemption date (unless a shorter
notice shall be satisfactory to the Trustee or is otherwise specified as
contemplated by Section 2.02 for Securities of any series).
Section 3.03. Selection of Securities to be Redeemed.
Except as otherwise specified as contemplated by Section 2.02 for
Securities of any series, if less than all the Securities of any series are to
be redeemed, the particular Securities to be redeemed shall be selected from
Securities of the same series outstanding not previously called for redemption
by lot or by such method as the Trustee considers fair and appropriate (and in
such manner as complies with applicable requirements of any stock exchange on
which Securities of such series are listed) and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series that have denominations larger
than the minimum authorized denomination for Securities of that series.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. If any Security selected
for partial redemption is converted in part after such selection but before the
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be practicable) to be the portion selected for redemption.
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Section 3.04. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date (unless
a shorter notice is specified as contemplated by Section 2.02 for the Securities
of any series), the Company shall provide a notice of redemption in the manner
provided in Section 11.02 to the Holders of Securities.
The notice shall identify the Securities (including CUSIP number, if any
and, in the case of partial redemption, the principal amount of the Securities)
to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price and method of payment, if other than in cash;
(3) if applicable, the then current conversion price or rate;
(4) the name and address of the Paying Agent and, if applicable, the
Conversion Agent or Exchange Agent;
(5) if applicable, that the right of the Holder to convert or exchange
Securities called for redemption shall terminate at the close of business
on the fifteenth day prior to the redemption date (or such other day as may
be specified as contemplated by Section 2.02 for Securities of any series);
(6) if applicable, that Holders who want to convert or exchange
Securities called for redemption must satisfy the requirements for
conversion or exchange contained in such Securities;
(7) that Securities called for redemption must be surrendered
(together in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the redemption date) to the Paying Agent to
collect the redemption price;
(8) that interest, if any (or original issue discount, if Original
Issue Discount Securities) on Securities called for redemption ceases to
accrue on and after the redemption date, unless the Company defaults in
making such redemption payment; and
(9) that the redemption is for a sinking fund or at the election of
the Company, whichever is the case.
A notice of redemption published as contemplated by Section 10.02 need not
identify particularly Registered Securities to be redeemed.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense, provided that the Company
shall have furnished to the Trustee
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the Officers' Certificate and Opinion of Counsel required pursuant to Section
10.04 at least 15 days prior to the date that the Trustee is required to take
any action in connection with a redemption.
Section 3.05 Effect of Notice of Redemption.
Once notice of redemption is provided, Securities of the series called for
redemption become due and payable on the redemption date and at the redemption
price therein specified and on and after such date (unless the Company shall
default in the payment of the redemption price and accrued interest, if any)
such Securities shall cease to bear interest, if any (and original issue
discount, if such Securities are Original Issue Discount Securities, shall cease
to accrue) and the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with said
notice, together with all coupons, if any, appertaining thereto maturing after
the redemption date, such Security shall be paid by the Company at the
redemption price, together with the accrued interest to the redemption date,
provided, however, that installments of interest on Bearer Securities whose
stated maturity is on or prior to the redemption date shall be payable only at
an office or agency maintained by the Company in a place of payment located
outside the United States (except as otherwise provided in Section 4.01) and,
unless otherwise specified as contemplated by Section 2.02, only upon
presentation and surrender of the coupons for such interest, and, provided
further, that unless otherwise specified as contemplated by Section 2.02,
installments of interest on Registered Securities whose stated maturity is on or
prior to the redemption date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Regular Record Date or special record date, as the case
may be, according to their terms and the provisions of Section 2.13.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the redemption date, such Security may
be paid after deducting from the redemption price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the redemption price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 4.01) and,
unless otherwise specified as contemplated by Section 2.02, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
redemption date at the rate prescribed therefor in the Security.
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Section 3.06. Deposit of Redemption Price.
Unless otherwise provided as contemplated by Section 2.02 with respect to
any series of Securities, on or before 10 a.m., New York time, on the redemption
date, the Company shall deposit with the Paying Agent money in immediately
available funds (or securities if permitted by the terms of such Securities)
sufficient to pay the redemption price of, and (except if the redemption date is
an Interest Payment Date) accrued interest, if any, on all Securities to be
redeemed on that date other than Securities or portions thereof called for
redemption on that date which are delivered by the Company to the Trustee for
cancellation. The Paying Agent shall return to the Company any money (or
securities) not required for that purpose because of conversion of Securities.
Section 3.07. Securities Redeemed in Part.
Any Registered Security that is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company, the Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Registrar and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Registered Security or
Registered Securities of the same series, containing identical terms and
provisions, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal amount of the Security so surrendered, and, otherwise specified
as contemplated by Section 2.02, if a global Security is so surrendered, the
Company shall execute, and the Trustee shall authenticate and deliver to the
depositary for such global Security, without service charge, a new global
Security in a denomination equal to and in exchange for the unredeemed portion
of the principal amount of the global Security so surrendered.
Section 3.08. Conversion or Exchange Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may arrange
for the purchase and conversion of any Securities called for redemption by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Trustee in trust for the Securityholders, on or
before the close of business on the redemption date, an amount in cash not less
than the redemption price, together with interest, if any, accrued to the
redemption date, of such Securities. Notwithstanding anything to the contrary
contained in this Article III, the obligation of the Company to pay the
redemption price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers. If such an agreement is entered into, any Securities
not duly surrendered for conversion or exchange by the Holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and surrendered by such purchasers
for conversion or exchange, all as of immediately prior to the close of business
on the last day on which Securities of such series called for redemption may be
converted or exchanged in accordance with the terms of such Securities, subject
to payment of the above amount as aforesaid.
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The Trustee shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it in the same manner as it would moneys
deposited with it by the Company for the redemption of Securities. Without the
Trustee's prior written consent, no arrangement between the Company and such
purchasers for the purchase and conversion or exchange of any Securities shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion or exchange of any Securities between the
Company and such purchasers, including the costs and expenses incurred by the
Trustee in the defense of any claim or liability arising out of or in connection
with the exercise or performance of any of its powers, duties, responsibilities
or obligations under this Indenture.
ARTICLE IV
COVENANTS
Section 4.01. Payment of Securities; Maintenance of Office or Agency.
The Company shall pay the principal of and any interest on the Securities
of each series in accordance with the terms of the Securities of such series,
any coupons appertaining thereto, and this Indenture.
To the extent enforceable under applicable law, the Company shall pay
interest on overdue principal at the rate borne by the Securities of such series
(unless a different rate is specified as contemplated by Section 2.02 for
Securities of such series).
If Securities of a series are issuable only as Registered Securities, the
Company will maintain in each place of payment for such series an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain (A) in the Borough of Manhattan, The City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment, where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related coupons may be presented or
surrendered for payment in the circumstances described in the following
paragraph (and not otherwise), (B) subject to any laws or regulations applicable
thereto, in a place of payment for that series which is located outside the
United States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series); provided, however,
that if the Securities of that series are listed on The International Stock
Exchange of the United Kingdom and the
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Republic of Ireland, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of that series are listed on such
exchange, and (C) subject to any laws or regulations applicable thereto, in a
place of payment for that series located outside the United States an office or
agency where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee and the Holders of the location, and
any change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency in respect of
any series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the corporate trust office
of the Trustee, except that Bearer Securities of that series and the related
coupons shall be presented and surrendered for payment (including payment of any
Additional Amounts payable on Bearer Securities of that series) at , and the
Company hereby appoints the same as its agency to receive such respective
presentations, surrenders, notices and demands.
No payment of principal of or interest on Bearer Securities shall be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to an account maintained with
a bank located in the United States, provided, however, that, if the Securities
of a series are denominated and payable in Dollars, payment of principal of and
interest on any Bearer Security (including any Additional Amounts payable on
Securities of such series) shall be made at the office of the Company's Paying
Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in Dollars of the full amount of such principal of or interest on or
additional amounts, as the case may be, at all offices or agencies outside the
United States maintained for that purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in accordance with the requirements set forth above for Securities of any series
for such purposes. The Company will give prompt written notice to the Trustee
and the Holders of any such designation or rescission and of any change in the
location of any such other office or agency.
If any Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any such Security of such series
or any coupon appertaining thereto Additional Amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or interest on or in respect of, any Security of any series or
payment of any related coupon or the net proceeds received on the sale or
exchange of any Security
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of any series, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in the terms of such Securities and this Section
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms and this Section and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
Except as otherwise provided with respect to the Securities of any series
as contemplated by Section 2.02, if the Securities of a series provide for the
payment of Additional Amounts, at least 10 days prior to the first Interest
Payment Date with respect to that series of Securities (or if the Securities of
that series will not bear interest prior to the maturity thereof, the first day
on which a payment of principal is made), and at least 10 days prior to each
date of payment of principal or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company will furnish the Trustee and the principal Paying Agent or Paying
Agents, if other than the Trustee, with an Officers' Certificate instructing the
Trustee and such Paying Agent or Paying Agents whether such payment of principal
or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are Foreign Persons without
withholding for or on account of any tax, assessment or other governmental
charge described in the Securities of that series. If any such withholding shall
be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of
Securities or coupons and the Company will pay to the Trustee or such Paying
Agent the Additional Amounts required by the terms of such Securities and this
Section. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section.
Section 4.02. SEC Reports.
The Company shall file with the Trustee within 15 days after it files them
with the SEC copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
The Company also shall comply with the other provisions of (S)TIA (S) 314(a).
Section 4.03. Compliance Certificate.
The Company shall, within 120 days after the end of each fiscal year of the
Company, commencing with the first fiscal year following the issuance of
Securities of any series under this Indenture, file with the Trustee a
certificate of the principal executive officer, principal financial officer or
principal accounting officer of the Company covering the period from the date of
issuance of such Securities to the end of the fiscal year in which such
Securities were issued, in the case of the first such certificate, and covering
the preceding fiscal year in the case of each subsequent
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certificate, and stating whether or not, to the knowledge of the signer, the
Company has complied with all conditions and covenants on its part contained in
this Indenture, and, if the signer has obtained knowledge of any default by the
Company in the performance, observance or fulfillment of any such condition or
covenant, specifying each such default and the nature thereof. For the purpose
of this Section 4.03, compliance shall be determined without regard to any grace
period or requirement of notice provided pursuant to the terms of this
Indenture. The certificate need not comply with Section 10.05.
The Company shall deliver to the Trustee within 120 days after the end of
each fiscal year of the Company a written statement signed by the Company's
independent auditors stating (1) that their audit examination has included a
review of the terms of this Indenture and the Securities as they relate to
accounting matters, and (2) whether, in connection with their audit examination,
any Event of Default has come to their attention and if such an Event of Default
has come to their attention, specifying the nature and period of existence
thereof.
Section 4.04. Corporate Existence.
Subject to the provisions of Section 5.01 hereof, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
Section 4.05. Waiver of Certain Covenants.
If so provided in the applicable supplemental indenture, the Company may
omit in any particular instance to comply with any term, provision or condition
of any covenant set forth in such supplemental indenture with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the outstanding Securities of such
series shall either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
Section 4.06. No Lien Created.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
Section 4.07. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on outstanding Securities as
of the end of such year.
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ARTICLE V
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge into, or transfer its
properties and assets substantially as an entirety to, another entity unless (1)
the successor entity, which shall be an entity organized and existing under the
laws of the United States or a State thereof, assumes by supplemental indenture
all the obligations of the Company under the Securities and any coupons
appertaining thereto and this Indenture; and (2) immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred and be
continuing. Thereafter, unless otherwise specified as contemplated by Section
2.02 for the Securities of any series and any related coupons, all such
obligations of the predecessor corporation shall terminate.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" with respect to Securities of any series means each
one of the events specified below in this Section 6.01, unless it is either
inapplicable to a particular series or is specifically deleted or modified as
contemplated by Section 2.02 for the Securities of such series, and any other
events as may be specified as contemplated by Section 2.02 for the Securities of
such series:
(1) the Company defaults in the payment of any interest on any
Security of that series when the same becomes due and payable and the
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of any
Security of that series when the same becomes due and payable at maturity,
upon redemption (including default in the making of any mandatory sinking
fund payment), upon purchase by the Company at the option of the Holder
pursuant to the terms of such Security or otherwise;
(3) the Company fails to comply with any of its other agreements in
Securities of that series or this Indenture (other than an agreement which
has expressly been included in this Indenture solely for the benefit of
Securities of any series other than that series or is expressly made
inapplicable to the Securities of such series as contemplated by Section
2.02) and the default continues for the period and after the notice
specified below;
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(4) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or consents to the commencement of
a case against it,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
adjudicates the Company insolvent or bankrupt,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the winding up or liquidation of the Company, and the
order or decree remains unstayed and in effect for 90 days; or
(6) any other Event of Default provided with respect to Securities of
that series occurs.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the Trustee
notifies the Company or the Holders of at least 25% in aggregate principal
amount of the outstanding Securities of that series notify the Company and the
Trustee of the Default and the Company does not cure the Default within 60 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in Section
6.01(4) or (5)) occurs and is continuing with respect to Securities of any
series at the time outstanding, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the
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outstanding Securities of that series by notice to the Company and the Trustee,
may declare to be due and payable immediately (1) the principal amount (or, if
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of Securities of that
series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of acceleration. Upon such declaration,
such principal amount (or specified amount) and interest, if any, shall be due
and payable immediately. If an Event of Default specified in Section 6.01(4) or
(5) occurs and is continuing, (1) the principal amount (or, if the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of the Securities of that
series) of all of the Securities of that series then outstanding and (2)
interest, if any, accrued to the date of such acceleration, shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or Securityholders. The Holders of a majority in aggregate principal
amount of the outstanding Securities of the series with respect to which an
acceleration applies by notice to the Trustee may rescind an acceleration and
its consequences with respect to such series if all existing Events of Default
(other than the non-payment of the principal of and accrued interest, if any, on
Securities that have become due solely by such acceleration) with respect to
Securities of that series have been cured or waived and if the rescission would
not conflict with any judgment or decree.
Section 6.03. Other Remedies.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may pursue any available remedy by proceeding at law
or in equity to collect the payment of the whole amount which then shall have
become due and remain unpaid for principal or interest, if any, on the
Securities of that series and any related coupons or to enforce the performance
of any provision of the Securities of that series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities of that series or any related coupons or does not produce any of
them in the proceeding. A delay or omission by the Trustee or any Holder of
Securities or related coupons, if any, in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Existing Defaults.
Subject to Section 9.02, the Holders of a majority in aggregate principal
amount of the outstanding Securities of any series by notice to the Trustee may
waive on behalf of the Holders of all the Securities of such series and any
related coupons an existing Default or Event of Default and its consequences.
When a Default or Event of Default is waived, it is cured and stops continuing.
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Section 6.05. Control by Majority.
The Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, with respect to the Securities of such series. The
Trustee, however, may refuse to follow any direction that conflicts with law or
this Indenture, that is unduly prejudicial to the rights of another
Securityholder or that would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall have
the right to pursue any remedy with respect to this Indenture or the Securities
unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to the Securities of that series;
(2) the Holders of at least 25% in aggregate principal amount of the
outstanding Securities of that series make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer and provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the outstanding Securities of such series.
A Securityholder of any series may not use this Indenture to prejudice the
rights of another Securityholder of such series or to obtain a preference or
priority over another Securityholder of such series, except in the manner herein
provided and for the equal and ratable benefit of all Securityholders of such
series.
Section 6.07. Rights of Holders to Receive Payment and to Convert or
Exchange.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security or a coupon to receive payment of principal of and (subject
to Sections 2.08 and 2.13) interest, if any, on the Security or payment on such
coupon, on or after the respective due dates with respect to such payments
expressed in such Security or coupon, and, if applicable, to convert or exchange
such Security on the terms and subject to the conditions applicable to
Securities of such series, or to bring suit for the enforcement of any such
payment on or after such respective dates or of such
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right to convert or exchange, if any, shall not be impaired or affected without
the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(l) or (2) occurs and is
continuing with respect to the Securities of any series, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount which then shall have become due and remain unpaid for
principal and interest, if any, on the Securities of such series and any related
coupons.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Securityholders (including the Holders of any coupons) allowed in any judicial
proceedings relative to the Company, its creditors or its property and to
collect and receive money, property or securities payable or deliverable on any
such claims and to distribute the same.
Section 6.10. Priorities.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal or
interest, upon presentation of the Securities or coupons, or both, as the case
may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 7.07;
Second: to the payment of amounts due and unpaid for principal and
interest, if any, on the Securities and coupons in respect of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts which then shall have become due and payable
on such Securities and coupons for principal and interest, respectively;
and
Third: to the Company.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
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expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount
of the outstanding Securities of any series.
ARTICLE VII
TRUSTEE
All the provisions of this Article VII apply to the Trustee acting in all
its appointed capacities pursuant to this Indenture unless any provision
specifically applies to the Trustee only in its capacity as Trustee.
Section 7.01. Duties of Trustee.
(a) If an Event of Default with respect to Securities of any series has
occurred and is continuing, the Trustee shall with respect to such series
exercise such of the rights and powers vested in it by this Indenture with
respect to such series and use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) With respect to Securities of any series, except during the
continuance of an Event of Default with respect to Securities of such series:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture or the TIA and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. The
Trustee, however, in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
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(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee may refuse to perform any
duty or exercise any right or power unless it receives indemnity satisfactory to
it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel or require an Officers' Certificate, an Opinion of Counsel and/or an
accountant's certificate. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on the Certificate, Opinion, or
accountant's certificate.
(c) The Trustee may act through agents and counsel and shall not be
responsible for the misconduct or negligence of any agent or counsel appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and coupons and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
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Section 7.04. Trustee's and Authenticating Agent's Disclaimer.
Neither the Trustee nor any Authenticating Agent makes any representation
as to the validity or adequacy of this Indenture or the Securities or the
coupons, if any, appertaining thereto; neither shall be accountable for the
Company's use of the proceeds from the Securities; and neither shall be
responsible for any statement in the Indenture or the Securities or any coupons
other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing with respect to Securities of any
series and if it is known to a Trust Officer of the Trustee, the Trustee shall
transmit by mail to the Holders of Securities of such series in the manner and
to the extent provided in (S)TIA (S) 313(c) notice of the Default within 90 days
after it occurs or as soon as reasonably practicable thereafter. Except in the
case of a default in payment of principal of or interest on any Security of such
series or any related coupons (including default in the making of any mandatory
sinking fund or mandatory repurchase payment), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders of
such series.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date on which Securities are originally issued under this Indenture, the Trustee
shall transmit by mail to the Holders of Securities, in the manner and to the
extent provided in (S)TIA (S) 313(c), a brief report dated as of such May 15
that complies with (S)TIA (S) 313(a). The Trustee also shall comply with (S)TIA
(S) 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed by the Company with the SEC and each stock exchange on which the
Securities are listed.
The Company will promptly notify the Trustee if and when the Securities are
listed on or delisted from any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee such compensation as shall have been
agreed upon in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it arising out of or in connection with the acceptance or
administration of this trust and its duties hereunder. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which
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it may seek indemnity. Failure of the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall have the
right to elect to defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture and the resignation or the removal of the Trustee.
Section 7.08. Replacement of Trustee.
The Trustee may resign at any time with respect to the Securities of one or
more series by so notifying the Company. The Holders of a majority in aggregate
principal amount of the outstanding Securities of any series may remove the
Trustee with respect to the Securities of such series by so notifying the
removed Trustee and may appoint a successor Trustee with the Company's consent.
The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
The Company may remove the Trustee at any time with respect to the
Securities of any series upon delivery to the Trustee of a resolution of the
Board of Directors to such effect, provided that contemporaneously therewith no
Default with respect to the Securities of such series shall have occurred and be
continuing.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, with respect to the Securities of one or more series,
the Company shall promptly appoint a
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successor Trustee or Trustees (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series).
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee (subject to the lien, if any, provided for in Section 7.07), the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall give notice in the manner
provided in Section 10.02 of its succession to each Securityholder.
If a successor Trustee with respect to the Securities of any series does
not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
principal amount of the outstanding Securities of such series may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation or
national banking association, the successor corporation or national banking
association without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of (S)TIA (S) 310(a). The Trustee shall always have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. With respect to the Securities of each series, the Trustee
shall comply with (S)TIA (S) 310(b). In determining whether the Trustee has a
conflicting interest as defined in TIA (S) 310(b) with respect to the Securities
of any series, there shall be excluded from such determination this Indenture
with respect to Securities of any particular series of Securities other than
that series. Nothing herein shall prevent the Trustee from filing with the SEC
the application referred to in the second to last paragraph of TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
Trustee shall comply with (S)TIA (S) 311(a), excluding any creditor
relationship listed in (S) TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
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ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's Obligations.
The Company may terminate all of its obligations under the Securities of
any series and all coupons, if any, appertaining thereto, and this Indenture
with respect to the Securities of such series if either (1) all Securities of
such series and all coupons, if any, appertaining thereto, previously
authenticated and delivered (other than (i) destroyed, lost or wrongfully-taken
Securities or coupons which have been replaced or paid as provided in Section
2.09, (ii) Securities or coupons for whose payment money (or, if permitted by
the terms of such Securities, securities) has theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.03, (iii) coupons
appertaining to Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange whose surrender is not required or
has been waived as provided in Section 2.08, and (iv) coupons appertaining to
Bearer Securities called for redemption and maturing after the relevant
redemption date, whose surrender has been waived as provided in Section 3.09),
have been delivered to the Trustee for cancellation; or (2) the Company
irrevocably deposits in trust with the Trustee money or Government Obligations
sufficient to pay the principal of and interest, if any, on all Securities of
such series and all coupons, if any, appertaining thereto previously
authenticated and delivered, and not theretofore canceled or delivered to the
Trustee for cancellation (other than any such Security or coupon referenced in
subclauses (i), (ii), (iii), (iv) or (v) of clause (1) above), to maturity or
redemption, as the case may be.
The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01,
7.07, 7.08, 8.01 and 8.03 of this Indenture, however, shall survive until the
Securities of such series are no longer outstanding. Thereafter the Company's
obligations in Sections 7.07 and 8.03 shall survive. Notwithstanding the
satisfaction and discharge of this Indenture with respect to the Securities of
any series, if money or Government Obligations shall have been deposited with
the Trustee pursuant to clause (2) of this Section, the obligations of the
Trustee under Section 8.02 and the second sentence of Section 8.03 shall
survive.
After a deposit and if all other conditions thereto are met, the Trustee
for the Securities of such series and the coupons, if any, appertaining thereto,
shall be required to execute an instrument acknowledging satisfaction and
discharge of this Indenture with respect to such Securities, except for those
surviving obligations specified above; provided, however, that the Trustee shall
not be required to execute such instrument until the expiration of ninety days
after the date of a deposit.
In order to have money available on a payment date to pay the principal of
or interest, if any, on the Securities, the Government Obligations shall be
payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
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Section 8.02. Application of Trust Fund.
The Trustee shall hold in trust money and Government Obligations deposited
with it pursuant to Section 8.01. It shall apply the deposited money and the
money from the Government Obligations through the Paying Agent and in accordance
with the provisions of the Securities, the coupons and this Indenture to the
payment of principal of and interest, if any, on the Securities and related
coupons, if any, for the payment of which such money or Government Obligations
has been deposited with the Trustee.
The Company shall pay, and indemnify the Trustee against, any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 8.01 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of outstanding Securities.
Section 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time. The
Trustee and the Paying Agent shall pay to the Company upon written request any
money or securities held by them for the payment of principal or interest, if
any, that remains unclaimed for two years; provided, however, that the Trustee
and the Paying Agent, before being required to make any such payment may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
each place of payment, notice that such money remains unclaimed and that, after
a date specified therein, which date shall not be less than 30 days from such
date of such publication, any unclaimed balance of such money then remaining
will be paid to the Company. After that, Holders entitled to the money or
securities must look to the Company for payment unless an applicable abandoned
property law designates another person.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to or consent of any Holder of
Securities or coupons or the Holder of any coupons:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01;
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(3) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.01 and 2.02;
(4) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(5) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Securities, stating
that such Events of Default are expressly being included solely to be
applicable to such series);
(6) to change or eliminate any of the provisions of this Indenture,
provided that, except as otherwise contemplated by Section 2.02(22), any
such change or elimination shall become effective only when there is no
Security outstanding of any series created prior thereto which is entitled
to the benefit of such provision;
(7) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of or
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, or to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized denominations
or to facilitate or permit the issuance of Securities in uncertificated
form (so long as any "registration-required obligation" within the meaning
of Section 163(f)(2) of the Internal Revenue Code of 1986, as amended (the
"Code") is in registered form for purposes of the Code) provided, that any
such action shall not adversely affect the interests of Holders of
Securities of any series or any related coupons in any material respect;
(8) to make any change that, in the opinion of the Board of Directors,
does not materially adversely affect the rights of any Securityholder or
the Holder of any coupon; or
(9) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA.
Section 9.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities of any series without notice to any Holder of Securities or coupons
but with the consent of the Holders of a majority in aggregate principal amount
of the outstanding Securities of each series affected by such amendment or
supplement, by Act of said Holders delivered to the Trustee. The Holders of a
majority in aggregate principal amount of the outstanding Securities of any
series, by Act of said Holders delivered to the Trustee, may on behalf of the
Holders of all Securities of such series and
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any related coupons waive compliance by the Company with any provision of this
Indenture or of Securities of such series without any notice to any Holder of
Securities or coupons. Without the consent of the Holder of each outstanding
Security affected thereby, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities of any series whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest on
any Security (or, in the case of an Original Issue Discount Security,
reduce the rate of accrual of original issue discount);
(3) reduce the principal of (or any premium payable upon the
redemption of) or extend the fixed maturity of any Security (or, in the
case of an Original Issue Discount Security, reduce the portion of the
principal amount that would be due and payable upon acceleration of the
maturity thereof pursuant to Section 6.02);
(4) change the amount or time of any payment required by any sinking
fund provisions of the Securities of any series;
(5) make any change that materially adversely affects the right of a
Holder to require the Company to purchase a Security in accordance with the
terms thereof and this Indenture;
(6) waive a default in the payment of principal of or interest, if
any, on any Security;
(7) make any Security payable in money or securities other than that
stated in the Security;
(8) make any change that materially adversely affects the right to
convert any Security or that increases the conversion price or reduces the
conversion rate of any Security; or
(9) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 4.01.
It shall not be necessary for the Act of the Holders under this Section to
approve the particular form of any proposed supplement or amendment, but it
shall be sufficient if such Act approves the substance thereof.
An amendment to or supplement of this Indenture which changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one
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or more particular series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
Section 9.04. Effect of Amendments and Supplements.
Upon the execution of any amendment or supplement authorized pursuant to
this Article, this Indenture shall be modified in accordance therewith, and such
amendment or supplement shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder and of any coupon appertaining thereto shall be bound
thereby.
Section 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article if the amendment, supplement or waiver does not
adversely affect the rights, duties, immunities or liabilities of the Trustee.
If it does, the Trustee may but need not sign it. The Company may not sign an
amendment or supplement until the Board of Directors approves it.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of TIA (S)(S) 310 to 317, inclusive, through operation of
TIA (S) 318(c), such imposed duties shall control.
Section 10.02. Notices.
Any notice or communication (including any Act of Holders) shall be
sufficiently given if in writing and delivered in person or mailed by first-
class mail addressed as follows:
If to the Company:
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Treasurer
If to the Trustee:
Attention:
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Except as otherwise expressly provided herein or otherwise specified with
respect to any series of Securities issuable as Bearer Securities pursuant to
Section 2.02, where this Indenture provides for notice to Holders of Securities
of any event:
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security affected by such event, at his address as
it appears in the security register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such
notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities if published in an Authorized Newspaper in the City of New York
and in such other city or
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cities as may be specified in such Securities on a Business Day at least
twice, the first such publication to be not earlier than the earliest date,
and not later than the latest date, prescribed for the giving of such
notice (except that, for purposes of Section 2.05, notice of the
appointment of a successor Authenticating Agent shall be sufficiently given
to Holders of Bearer Securities if published as provided herein at least
once).
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice to Holders of
Registered Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the person entitled to receive such notice, either before
or after the event, and such waiver shall be equivalent of such notice. Waivers
of notice by Holders of Securities shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Except for a notice to the Trustee, which is deemed given only when
received, if a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it. Any notice or
communication published in the manner provided above shall be deemed to have
been given on the date of publication or, if published more than once, on the
date of the first such publication.
Any notice or communication required or permitted under this Indenture
shall be in the English language, except that any published notice may be in the
official language of the country of publication.
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Section 10.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to (S)(S)TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of(S) TIA (S) 312(c).
Section 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent (including any covenants compliance with
which constitutes a condition precedent), if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent (including any covenants compliance
with which constitutes a condition precedent) have been complied with.
Section 10.05. Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture other than
certificates provided pursuant to Section 4.03 shall include:
(1) a statement that the person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
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Section 10.06. When Treasury Securities Disregarded.
In determining whether the Holders of the required aggregate principal
amount of outstanding Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver or taken any other action
hereunder, Securities of such series owned by the Company or by any Affiliate of
the Company shall be disregarded and deemed not to be outstanding, except that
for the purpose of determining whether the Trustee shall be protected in relying
on such request, demand, authorization, direction, notice, consent, waiver or
action, only Securities of such series which the Trustee actually knows are so
owned shall be so disregarded. Securities so owned that have been pledged in
good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right to so act with respect to such
Securities and that the pledgee is not the Company or any Affiliate of the
Company.
Section 10.07. Rules by Trustee and Agents.
Subject to Section 10.15 and Article XI, the Trustee may make reasonable
rules for action by or a meeting of Securityholders of all series or any series.
The Registrar, Paying Agent, Conversion Agent or Exchange Agent may make
reasonable rules for its functions.
Section 10.08. Legal Holidays.
A "Legal Holiday" with respect to any place of payment or conversion or
other location is a Saturday, a Sunday or a day on which banking institutions or
trust companies in that place of payment, conversion or other location are not
authorized or required to be open. If a payment date or the last day to convert
a Security is a Legal Holiday at a place of payment or conversion, payment or
conversion may be made at that place on the next succeeding day that is not a
Legal Holiday, and no interest or original issue discount, as the case may be,
shall accrue for the intervening period.
Section 10.09. Governing Law.
The internal laws of the State of New York shall govern this Indenture, the
Securities and coupons.
Section 10.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 10.11. No Recourse Against Others.
No past, present or future director, officer, employee or stockholder, as
such, of the Company or the Trustee or any successor of either thereof shall
have any liability for any obligations of the
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Company or the Trustee under the Securities or any coupons appertaining thereto
or this Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation and all such liability is hereby waived and
released. Such waiver and release are part of the consideration for the issue of
the Securities.
Section 10.12. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
Section 10.13. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 10.14. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 10.15. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article XI, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments and so voting
at any such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 7.01)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 11.06.
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(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds. Where such execution is by a signer acting
in a capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date of
the execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership, principal amount and serial numbers of outstanding
Registered Securities held by any person, and the date of holding the same,
shall be proved by the security register.
(d) The ownership, principal amount and serial numbers of outstanding
Bearer Securities held by any person, and the date of holding the same, may be
proved by the production of such Bearer Securities or by a certificate executed,
as depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such person had on deposit with such
depositary or exhibited to it, the Bearer Securities therein described, or such
facts may be proved by the certificate or affidavit of the person holding such
Bearer Securities, if such certificate or affidavit is deemed by the Trustee to
be satisfactory. The Trustee and the Company may assume that such ownership of
any Bearer Securities continues until (1) another certificate or affidavit
bearing a later date issued in respect of the same Bearer Security is produced,
or (2) such Bearer Security is produced to the Trustee by some other person or
(3) such Bearer Security is surrendered in exchange for a Registered Security or
(4) such Bearer Security is no longer outstanding. The ownership, principal
amount and serial numbers of outstanding Bearer Securities held by any person,
and the date of holding the same, may also be proved in any other manner which
the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated to), by
or pursuant to a resolution of the Board of Directors, fix in advance a record
date for the determination of Holders of Registered Securities entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
Act. Notwithstanding TIA (S) 316(c), such record date shall be the record date
specified in or pursuant to such resolution of the Board of Directors, which
shall be a date not earlier than 30 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of Registered Securities
of record at the close of business on such record date shall be deemed to be
Holders for the purpose of determining whether Holders of the requisite
proportion of outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders of
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Registered Securities shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind such Holder and every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee, any
Agent or the Company in reliance thereon, whether or not notation of such action
is made upon such Security.
ARTICLE XI
MEETINGS OF HOLDERS OF SECURITIES
Section 11.01. Purposes for which Meetings may be Called.
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
Section 11.02. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 11.01, to be held at such time
and at such place in the Borough of Manhattan, the City of New York, or in
London as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 10.02, not less than 21 nor more than
180 days prior to the date for the meeting.
(b) In case at any time the Company pursuant to a resolution of the Board
of Directors or the Holders of at least 10% of the aggregate principal amount of
outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 11.01, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, the Company or the Holders of Securities of such series in the
amount above specified, as the case may be, may determine the time and the place
in the Borough of Manhattan, the City of New York, or in London for such meeting
and may call such meeting for such purposes by giving notice thereof as provided
in subsection (a) of this Section.
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Section 11.03. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a person shall be (1) a Holder of one or more outstanding Securities of
such series, or (2) a person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more outstanding Securities of such series by such
Holder or Holders. The only persons who shall be entitled to be present or to
speak at any meeting of Holder of Securities of any series shall be the persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 11.04. Quorum; Action.
The persons entitled to vote a majority of the aggregate principal amount
of the outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 11.02(a), except that
such notice shall be given only once not less than five days prior to the date
on which the meeting is scheduled to be reconvened.
Except as limited by the third sentence of Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the outstanding Securities of that
series; provided, however, that, except as limited by the third sentence of
Section 9.02, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which this Indenture
expressly provides may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in aggregate principal amount of the
outstanding Securities of a series, may be adopted at a meeting or an adjourned
meeting duly reconvened at which a quorum is present as aforesaid, by the
affirmative vote of the Holders of such specified percentage in aggregate
principal amount of the outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 11.04, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in aggregate principal amount
59
<PAGE>
of all outstanding Securities affected thereby, or of the Holders of such series
and one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting;
and
(ii) the principal amount of the outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
Section 11.05. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 10.15 and the
appointment of any proxy shall be proved in the manner specified in Section
10.15 or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 10.15 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 10.15 or other proof.
(b) The Trustee shall by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 11.02(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the persons entitled to vote a majority of the aggregate principal
amount of the outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the outstanding
Securities of such series held or represented by him, provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called pursuant
to Section 11.02 at which a quorum is present may be adjourned from time to time
by persons entitled to vote
60
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a majority of the aggregate principal amount of the outstanding Securities of
such series represented at the meeting and the meeting may be held as so
adjourned without further notice.
Section 11.06. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amount and serial numbers of
the outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 11.02 and, if
applicable, Section 11.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
61
<PAGE>
SIGNATURES
Dated: , TELE-COMMUNICATIONS, INC.
By:___________________________________
Attest: (Seal)
Dated: , , Trustee
By:___________________________________
Attest: (Seal)
62
<PAGE>
EXHIBIT 12
TELE-COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
Calculation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends
(amounts in millions, except for ratios)
(unaudited)
<TABLE>
<CAPTION>
Three Months
Year Ended December 31 Ended March 31
------------------------------------------ --------------
1997 1996(b) 1995(b) 1994(b) 1993(b) 1998 1997
------------------------------------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings (losses) before income taxes (860) 563 (311) 230 150 558 (96)
Add:
Interest on debt 1,246 1,164 1,064 811 738 310 302
Interest portion of rentals 62 64 47 27 23 14 14
Amortization of debt expense 17 16 15 13 12 3 3
Distributions from and losses of less than
50%-owned affiliates with debt not
guaranteed by TCI (net of earnings not
distributed of less than 50%-owned
affiliates) 895 234 183 (21) 37 262 40
Minority interests in earnings (losses) of
consolidated subsidiaries (128) (43) (18) (7) 7 (62) 1
Preferred stock dividend requirements of
consolidated subsidiaries (a) 70 56 70 20 14 22 20
Dividends on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely
subordinated debt securities of a
subsidiary 132 70 -- -- -- 35 25
------------------------------------------ --------------
Earnings available for combined fixed
charges and preferred stock dividends 1,434 2,124 1,050 1,073 981 1,142 309
------------------------------------------ --------------
Fixed charges:
Interest on debt:
TCI and consolidated subsidiaries 1,160 1,096 1,010 785 731 285 289
Less than 50%-owned affiliates with debt
guaranteed by TCI 15 12 9 7 -- 7 --
TCI's proportionate share of interest of
50%-owned affiliates 71 56 45 19 7 18 13
------------------------------------------ --------------
1,246 1,164 1,064 811 738 310 302
Interest portion of rentals 62 64 47 27 23 14 14
Amortization of debt expense 17 16 15 13 12 3 3
Preferred stock dividend requirements of
consolidated subsidiaries (a) 70 56 70 20 14 22 20
Dividends on Company-obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely
subordinated debt securities of a
subsidiary 132 70 -- -- -- 35 25
Preferred stock dividend requirements of
TCI (a) 58 69 58 14 3 19 17
Capitalized interest 7 13 13 16 9 1 1
------------------------------------------ --------------
Total fixed charges 1,592 1,452 1,267 901 799 404 382
========================================== ==============
Ratio of earnings to combined fixed charges
and preferred stock dividends -- 1.46 -- 1.19 1.23 2.83 --
Deficiency (158) -- (217) -- -- -- (73)
</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.
(b) Amounts have been restated for the effect of the change in ownership
percentages of and methods of accounting for certain investments.
<PAGE>
TELE-COMMUNICATIONS, INC.
AND CONSOLIDATED SUBSIDIARIES
Calculation of Ratio 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 or
unaffiliated persons guaranteed by TCI have not been included in fixed charges
as follows:
Year ended December 31,
1997 19
1996 8
1995 8
1994 6
1993 14
Three months ended March 31,
1998 6
1997 5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our reports, dated March 20, 1998,
relating to the consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1997 and 1996, 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, 1997, and all related
financial statement schedules, which reports appear in the December 31, 1997
Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to
our firm under the heading "Experts" in the registration statement.
KPMG Peat Marwick LLP
Denver, Colorado
June 9, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report, dated March 20, 1998,
relating to the combined balance sheets of TCI Group as of December 31, 1997 and
1996, and the related combined statements of operations, equity (deficit), and
cash flows for each of the years in the three-year period ended December 31,
1997, which report appears in the December 31, 1997 Annual Report on Form 10-K
of Tele-Communications, Inc., and to the reference to our firm under the heading
"Experts" in the registration statement. Our report covering the combined
financial statements refers to the effects of not consolidating TCI Group's
interest in Liberty Media Group and the TCI Ventures Group for all periods that
TCI Group has an interest in Liberty Media Group and TCI Ventures Group,
respectively.
KPMG Peat Marwick LLP
Denver, Colorado
June 9, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report, dated March 20, 1998,
relating to the combined balance sheets of Liberty Media Group as of December
31, 1997 and 1996, and the related combined statements of operations, equity,
and cash flows for each of the years in the three-year period ended December 31,
1997, which report appears in the December 31, 1997 Annual Report on Form 10-K
of Tele-Communications, Inc., and to the reference to our firm under the heading
"Experts" in the registration statement.
KPMG Peat Marwick LLP
Denver, Colorado
June 9, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report, dated March 20, 1998,
relating to the combined balance sheets of TCI Ventures Group as of December 31,
1997 and 1996, and the related combined statements of operations, equity, and
cash flows for each of the years in the three-year period ended December 31,
1997, which report appears in the December 31, 1997 Annual Report on Form 10-K
of Tele-Communications, Inc., and to the reference to our firm under the heading
"Experts" in the registration statement.
KPMG Peat Marwick LLP
Denver, Colorado
June 9, 1998
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Telewest Communications plc:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report, dated March 19, 1998,
relating to the consolidated balance sheet of Telewest Communications plc and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations and cash flows for each of the years in the three-year
period ended December 31, 1997, which report appears in the December 31, 1997
Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to
our firm under the heading "Experts" in the registration statement.
KPMG Audit Plc
Chartered Accountants
Registered Auditors
London, England
June 9, 1998
<PAGE>
EXHIBIT 23.6
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of Tele-Communications,
Inc. on Form S-3 of our report dated February 3, 1998, on the consolidated
financial statements of Sprint Spectrum Holding Company, L.P. and subsidiaries
(which expresses an unqualified opinion and includes an explanatory paragraph
referring to the emergence from the development stage of Sprint Spectrum Holding
Company, L.P. and subsidiaries) incorporated by reference in the Annual Report
on Form 10-K of Tele-Communications, Inc. for the year ended December 31, 1997.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
Deloitte & Touche LLP
Kansas City, Missouri
June 9, 1998
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Cablevision Systems Corporation
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report, dated April 1, 1997,
relating to the consolidated balance sheets of Cablevision Systems Corporation
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, stockholders' deficiency and cash flows for each of
the years in the three-year period ended December 31, 1996, and the related
financial statement schedule, which report is incorporated by reference in the
Current Report on Form 8-K of Tele-Communications, Inc., dated March 6, 1998,
and to the reference to our firm under the heading "Experts" in the registration
statement.
KPMG Peat Marwick LLP
Jericho, New York
June 9, 1998
