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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 22, 1996
Date of Earliest Event Reported: May 22, 1996
TCI COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-5550 84-0588868
(Commission File Number) (I.R.S. Employer Identification No.)
TERRACE TOWER II
5619 DTC PARKWAY
ENGLEWOOD, COLORADO 80111-3000
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (303) 267-5500
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ITEM 5. OTHER EVENTS.
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Pursuant to a Registration Statement on Form S-3 (File No. 33-64525) (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and
declared effective by the Commission on January 24, 1996, the Registrant and
four Delaware business trusts (the "Business Trusts") registered subordinated
debt securities of the Company, preferred securities of the Business Trusts,
guarantees of such preferred securities by the Company and certain back-up
undertakings of the Company (the "Registered Securities"), for delayed or
continuous offering to the public pursuant to Rule 415 under the Act, for a
maximum aggregate initial offering price of $1 billion. Reference is made to the
Registration Statement for further information concerning the terms of the
Registered Securities and the offering thereof.
On May 17, 1996, a Purchase Agreement (the "Underwriting Agreement"),
substantially in the form of Exhibit 1 to the Registration Statement, was
executed by the Registrant, TCI Communications Financing II (one of the four
Business Trusts referred to above)("Trust II") Lehman Brothers Inc., Bear
Stearns & Co. Inc., A.G. Edwards & Sons, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, PaineWebber Incorporated, Prudential
Securities, Incorporated and Smith Barney Inc., as representatives of the
several underwriters named therein (the "Underwriters"), providing for the sale
by Trust II to, and the offering to the public by, the Underwriters of
$500,000,000 aggregate liquidation amount of Trust II's Trust Preferred
Securities ("Preferred Securities"). In connection with the capitalization of
Trust II, the Registrant will purchase Trust II's common securities ("Common
Securities") for $15,463,925. The aggregate proceeds of the sale of the
Preferred Securities and the Common Securities ($515,463,925) are to be used to
purchase subordinated debt securities of the Company, designated its "10%
Subordinated Deferrable Interest Notes Due May 31, 2045" (the "Notes").
The sale of the Preferred Securities to the Underwriters pursuant to the
Underwriting Agreement, and the sale of the Common Securities to the Registrant,
were consummated on May 22, 1996. The gross proceeds to Trust II from the
sale of the Preferred Securities and the Common Securities were used to purchase
Notes with an aggregate principal amount of $515, 463,925.
The Underwriting Agreement is filed as Exhibit 1.1 hereto. The Notes were
issued pursuant to an Indenture, dated as of January 29, 1995, between the
Registrant and The Bank of New York, as trustee, in the form filed as Exhibit 1
to the Registration Statement, and a Second Supplemental Indenture, dated as of
May 22, 1996 (the "Supplemental Indenture"), between the Registrant and the
Bank of New York, as trustee. The Supplemental Indenture, which is
substantially in the form of Exhibit 4.14 to the Registration Statement, is
filed as Exhibit 4 hereto.
The opinion of Richards, Layton & Finger, special Delaware counsel to the
Company and Trust II, concerning certain legal matters with respect to the
validity of the Preferred Securities is filed as Exhibit 5 hereto. Such
opinion includes the consent of Richards, Layton & Finger to the reference to
its name in the Prospectus Supplement referred to below.
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The Preferred Securities were offered and sold pursuant to a Prospectus
Supplement, dated May 17, 1996 (the "Prospectus Supplement"), and a Prospectus,
dated January 24, 1996, which have been filed under the Act pursuant to Rule
424(b). In connection with the discussion in the Prospectus Supplement under
the caption "Certain Federal Income Tax Matters," Baker & Botts, L.L.P., counsel
to the Registrant and Trust II, has rendered its opinion with respect to certain
tax matters. Such opinion, which includes the consent of Baker & Botts, L.L.P.
to the reference to its name in the Prospectus Supplement, is filed as Exhibit 8
hereto.
The Registrant is filing this Current Report on Form 8-K in order to cause
the Underwriting Agreement, the Supplemental Indenture and the opinons and
consents of Baker & Botts, L.L.P. and Richard, Layton & Finger to be
incorporated into the Registration Statement by reference. By filing this
Current Report on Form 8-K, however, the Registrant does not believe that any of
the Underwriting Agreement, the Supplemental Indenture, the opinions and
consents of Baker & Botts, L.L.P. and Richards, Layton & Finger or the
information set forth herein represent, either individually or in the aggregate,
a "fundamental change" (as such term is used in Item 512(a)(1)(ii) of Regulation
S-K) in the information set forth in the Registration Statement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are being filed with this Form 8-K:
Page
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1 Purchase Agreement, dated as of May 17,
1996, among the Registrant, TCI
Communications Financing II and the
underwriters named therein
4 Second Supplemental Indenture, dated May
22, 1996, between the Registrant and The
Bank of New York, as trustee
5 Opinion of Richards, Layton & Finger
regarding the validity of the preferred
securities under Delaware law.
8 Opinion of Baker & Botts, L.L.P. regarding
certain tax matters.
23.1 Consent of Richards, Layton & Finger
(included in Exhibit 5).
23.2 Consent of Baker & Botts, L.L.P. (included in
Exhibit 8).
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 22, 1996
TCI COMMUNICATIONS, INC.
(Registrant)
By: /s/ Stephen M. Brett
________________________________
Name: Stephen M. Brett
Title: Senior Vice President
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EXHIBIT 1
20,000,000 Preferred Securities
TCI COMMUNICATIONS FINANCING II
(a Delaware Business Trust)
10% Trust Preferred Securities
(Liquidation Amount $25 per Preferred Security)
guaranteed to a limited extent by TCI Communications, Inc.
PURCHASE AGREEMENT
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May 17, 1996
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
A.G. EDWARDS & SONS, INC.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
SMITH BARNEY INC.
as Representatives of the several Underwriters
named in Schedule A hereto
c/o LEHMAN BROTHERS INC.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Dear Sirs:
Each of TCI Communications Financing II (the "Trust"), a statutory business
trust formed under the Business Trust Act (the "Delaware Act") of the State of
Delaware and TCI Communications, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Lehman Brothers Inc. ("Lehman Brothers") and each of
the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall include any underwriter substituted as
hereinafter provided in Section 9 hereof), for whom Lehman Brothers, Bear,
Stearns & Co. Inc., A.G. Edwards & Sons, Inc., Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith
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Incorporated, Morgan Stanley & Co. Incorporated, PaineWebber Incorporated,
Prudential Securities Incorporated and Smith Barney Inc. are acting as
Representatives (in such capacity, the "Representatives"), with respect to the
sale by the Trust and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of 10% Trust Preferred Securities
(liquidation amount $25 per preferred security) of the Trust (the "Preferred
Securities") set forth in Schedule A. The Preferred Securities will be
guaranteed by the Company on a limited basis to the extent the Trust has funds
available therefor pursuant to a Preferred Securities Guarantee Agreement to be
dated as of the Closing Date (the "Guarantee"). The aforesaid Securities to be
purchased by the Underwriters, together with the Guarantee, are collectively
hereinafter called the "Offered Securities".
The entire proceeds from the sale of the Offered Securities will be
combined with the entire proceeds from the sale by the Trust to the Company of
its common securities (the "Common Securities") and will be used by the Trust to
purchase the 10% Subordinated Deferrable Interest Notes due May 31, 2045 (the
"Subordinated Debt Securities") of the Company. The Preferred Securities and
the Common Securities will be issued pursuant to the amended and restated
declaration of trust of the Trust, to be dated as of the Closing Date (the
"Declaration"), among the Company, as Sponsor, the trustees named therein (the
"Trustees") and the holders from time to time of undivided beneficial interests
in the assets of the Trust. The Subordinated Debt Securities will be issued
pursuant to an indenture, dated as of January 29, 1996 (the "Base Indenture"),
between the Company and The Bank of New York, as trustee (the "Debt Trustee"),
and a supplement to the Base Indenture, to be dated as of the Closing Date (the
"Supplemental Indenture," and together with the Base Indenture and any other
amendments or supplements thereto, the "Indenture"), between the Company and the
Debt Trustee.
The Trust and the Company understand that the Underwriters propose to make
a public offering of the Offered Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered.
SECTION 1. Registration Statement and Prospectus. The Trust and the
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Company have filed with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on
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Form S-3 (No. 33-64525) and a related prospectus relating to the Offered
Securities and the Subordinated Debt Securities under the Securities Act of
1933, as amended (the "1933 Act"), which has become effective under the 1933
Act, have filed such amendments thereto, if any, and such amended prospectus or
prospectuses and preliminary prospectus supplement or supplements as may have
been required to the date hereof, and will promptly file with the Commission a
prospectus supplement specifically relating to the Offered Securities pursuant
to Rule 424 under the 1933 Act, if necessary. Each prospectus and prospectus
supplement used prior to the execution and delivery of this Agreement is herein
called a "preliminary prospectus." Such registration statement, including the
exhibits thereto, schedules thereto, if any, and the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time it became effective, is herein called the "Registration Statement." The
final prospectus and the final prospectus supplement relating to the Offered
Securities, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Offered Securities,
is herein called the "Prospectus." For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act"), which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
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SECTION 2. Agreements to Sell and Purchase.
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(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Trust agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Trust, at the price of
$25.00 per Offered Security, the number of Offered Securities set forth in
Schedule A opposite the name of such Underwriter plus any additional number of
Offered Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 9 hereof.
(b) As compensation to the Underwriters for their commitment hereunder,
and in view of the fact that the proceeds of the sale of the Offered Securities
will be used by the Trust to purchase the Subordinated Debt Securities of the
Company, the Company hereby agrees to pay at the Closing Date, for the account
of the several Underwriters, the amount of $0.7875 per Offered Security;
provided that such compensation for sales of 100,000 or more Offered Securities
to a single purchaser will be $0.50 per Offered Security.
SECTION 3. Delivery and Payment.
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Payment of the purchase price for the Offered Securities to be purchased by
the Underwriters shall be made at the offices of Baker & Botts, L.L.P., 599
Lexington Avenue, New York, New York 10022-6030, or at such other place as shall
be agreed upon by the Representatives, the Trust and the Company, at 10:00 A.M.
on the third business day following the date hereof, or such other time not
later than ten business days after such date as shall be agreed upon by the
Representatives, the Trust and the Company (such time and date of payment and
delivery being herein called the "Closing Date"). Payment shall be made to the
Trust by certified or official bank check or checks drawn in same day funds
payable to the order of the Trust against delivery to the Representatives for
the account of the several Underwriters of the Offered Securities in book-entry
form through the facilities of The Depository Trust Company. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Offered Securities which it has agreed to purchase. Lehman Brothers,
individually and not as representative of the Underwriters, may
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(but shall not be obligated to) make payment of the purchase price for the
Offered Securities to be purchased by any Underwriter whose check has not been
received by the Closing Date, but such payment shall not relieve such
Underwriter from its obligations hereunder.
At the Closing Date the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under Section 2 hereof by
certified or official bank check or checks payable to Lehman Brothers in same
day funds.
SECTION 4. Covenants of the Trust and the Company. Each of the Trust and
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the Company, jointly and severally, covenants with each Underwriter as follows:
(a) The Trust and the Company, subject to Section 4(c), will notify
the Underwriters immediately, and confirm the notice in writing, (1) of the
effectiveness of any post-effective amendment to the Registration Statement
and of the filing of any amendment or supplement to the Prospectus pursuant
to Rule 424(b), (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, any
order preventing or suspending the use of any preliminary prospectus or the
initiation or threatening of any proceedings for that purpose, (4) of the
receipt by the Trust or 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 Trust and the Company will use their reasonable best
efforts to prevent the issuance of any order
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suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any preliminary prospectus or
suspending the qualification of the Offered Securities for offer or sale in
any jurisdiction, and if any such order is issued, the Trust and the
Company will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible time.
(b) To furnish to each of the Underwriters, without charge, one
conformed copy of the Registration Statement and any post-effective
amendments thereto, including all financial statements and schedules,
exhibits and documents incorporated therein by reference (including
exhibits incorporated therein by reference to the extent not previously
furnished to the Underwriters) and to deliver to the Underwriters the
number of conformed copies of the Registration Statement and any post-
effective amendment thereto, excluding exhibits, as the Underwriters or
their counsel may reasonably request.
(c) To give the Representatives advance notice of their intention to
file any amendment or supplement to the Registration Statement or the
Prospectus with respect to the Offered Securities, and not to file any such
amendment or supplement to which the Representatives shall reasonably
object in writing.
(d) During the period of time that the Prospectus is required by law
to be delivered, to deliver to each Underwriter, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as such
Underwriter may reasonably request. Each of the Trust and the Company
consents to the use of the Prospectus or any amendment or supplement
thereto by the several 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 Trust or
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
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comply with law, the Trust and the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto,
and shall during such period forthwith file all reports and any definitive
proxy statement or information statement required to be filed by the Trust
or the Company with the Commission pursuant to Section 13 or 14 of the 1934
Act subsequent to the date of the Prospectus, 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 the judgment of the Representatives should be so set
forth in the Prospectus, or which in the judgment of the Representatives
makes it necessary to so supplement or amend the Prospectus, the Trust and
the Company will consult with the Representatives concerning the necessity
of filing with the Commission a supplement or amendment to the Prospectus
or a report pursuant to Section 13 or 14 of the 1934 Act.
(e) Prior to any public offering of any Offered Securities by the
Underwriters, to cooperate with the Representatives and counsel retained by
the Representatives in connection with the registration or qualification of
the 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 the Representatives may
request; provided, that in no event shall either the Trust or the Company
be obligated to qualify to do business as a foreign business trust or
corporation, as the case may be, 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 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 the
Representatives may designate. In each jurisdiction in which the Offered
Securities have been so qualified, the Trust and the Company will file such
statements
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and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for so long as may be required in connection
with the distribution of the Offered Securities.
(f) To make generally available to their security holders and to each
Underwriter the consolidated earnings statements (which need not be
audited) that satisfy the provisions of Section 11(a) of the 1933 Act and
Rule 158 thereunder.
(g) The Company shall pay or cause to be paid the following: (1) all
costs and expenses incurred in connection with the preparation, printing
and filing of the Registration Statement, any preliminary prospectus, the
Prospectus and any legal investment memorandum and Blue Sky memorandum as
contemplated by Section 4(e), (2) any filing fees incident to any required
review by the National Association of Securities Dealers, Inc. of the terms
of the sale of the Offered Securities, (3) any fees charged by securities
rating agencies for rating any of the Offered Securities, (4) all costs and
expenses incurred in connection with the preparation, issuance and delivery
of the Offered Securities (other than transfer taxes) and the execution and
delivery of the Indenture, (5) all costs and expenses incurred in
connection with furnishing such copies of the Registration Statement, the
Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the
offering and sale of Offered Securities by dealers to whom Offered
Securities may be sold, (6) the fees and expenses incurred in connection
with the registration of the Offered Securities under the 1934 Act and (7)
the fees and expenses of the transfer agent for the Preferred Securities,
if any.
(h) If this Agreement is terminated by the Representatives 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 Trust or the Company to comply with the terms of this Agreement, or if
for any reason either of the Trust or the Company shall be unable to
perform its obligations herein, the Company will reimburse the several
Underwriters, for all out-of-pocket expenses (including the fees and
expenses of counsel
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retained by the Underwriters) reasonably incurred by the Underwriters in
connection herewith. Neither the Trust nor the Company, however, will be
liable to any of the Underwriters for damages on account of loss of
anticipated profits.
(i) During a period of 30 days from the date of this Agreement,
neither the Trust nor the Company will, without prior written consent of
Lehman Brothers, directly or indirectly, sell, offer to sell, contract to
sell, grant any option for the sale of, or otherwise dispose of, any
Preferred Securities, any security convertible into or exchangeable into or
exercisable for, Preferred Securities or Subordinated Debt Securities or
any debt securities substantially similar to the Subordinated Debt
Securities or any equity securities substantially similar to the Preferred
Securities, except for the Subordinated Debt Securities and Preferred
Securities offered hereby.
(j) To use every reasonable effort to effect and maintain the listing
of the Preferred Securities on the New York Stock Exchange and to file with
the New York Stock Exchange all documents and notices required by the New
York Stock Exchange of companies that have similar securities quoted on
such exchange.
SECTION 5. Representations and Warranties. (a) Each of the Trust and the
------------------------------
Company, jointly and severally, represents and warrants to each Underwriter as
of the date hereof as follows:
(1) 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 1934 Act, and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated
by reference during the period the Prospectus is required to be delivered
will, when they are filed with the Commission, conform in all material
respects to the requirements of the 1934 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
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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.
(2) The Trust and the Company jointly meet the registrant requirements
and the transaction requirements for use of Form S-3 under the 1933 Act in
connection with the offering of the Offered Securities. The Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement has been issued
under the 1933 Act, and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Trust or the Company,
are contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement and any post-
effective amendments thereto became effective and at the Closing Date, the
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and did not and 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. Neither the Prospectus nor any amendments or supplements
thereto, at the time of filing thereof with the Commission, included or
will include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Trust or the
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Company in writing by any Underwriter through the Representatives expressly
for use in the Registration Statement or Prospectus 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 Bank of New York.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations, if
applicable, and each preliminary prospectus delivered and the Prospectus to
be delivered to the Underwriters for use in connection with this offering
was or will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(3) This Agreement has been duly authorized, executed and delivered by
the Company.
(4) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the creation and
valid existence of the Trust as a business trust have been made; under the
Delaware Act and the Declaration, the Trust has the business trust power
and authority to (x) own property and conduct its business, all as
described in the Prospectus, (y) enter into and perform its obligations
under this Agreement, and (z) issue and perform its obligations under the
Preferred Securities and the Common Securities and is not required to be
authorized to do business in any other jurisdiction; the Trust is not a
party to or otherwise bound by any agreement other than those described in
the Prospectus; the Trust does not have any consolidated or unconsolidated
subsidiaries; and the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(5) The Declaration has been duly and validly authorized by the
Company and, when executed and delivered by the Company and the Trustees at
the Closing Date, and assuming due
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authorization, execution and delivery thereof by the Property Trustee and
the Delaware Trustee (as such terms are defined in the Declaration), will
be the valid and binding obligation of the Company and the Trustees,
enforceable against the Company and the Trustees 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 Declaration has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
(6) Under the Delaware Act and the Declaration, the execution and
delivery by the Trust of this Agreement, and the performance by the Trust
of its obligations thereunder, have been duly authorized by all necessary
business trust action on the part of the Trust; and this Agreement has been
duly executed and delivered by the Trust under the law of Delaware.
(7) The Common Securities have been duly authorized by the Original
Declaration (as defined in the Declaration) and, when issued and delivered
by the Trust to the Company against payment therefor in accordance with the
Declaration, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; and under the
Delaware Act and the Declaration, the issuance of the Common Securities
will not be subject to preemptive rights.
(8) The Preferred Securities have been duly authorized by the Original
Declaration and, when issued and delivered by the Trust in accordance with
the Declaration to the Underwriters and paid for in accordance with this
Agreement, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders of
the Preferred Securities, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; under the Delaware Act and the
Declaration, the issuance of the Preferred Securities will not be subject
to preemptive rights; and the
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Preferred Securities conform to the description thereof in the Prospectus.
(9) At the Closing Date, all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(10) At the Closing Date, the Property Trustee will be the record
holder of the Subordinated Debt Securities and no security interest,
mortgage, pledge, lien, encumbrance, claim or equity will be noted thereon
or on the securities register.
(11) The Guarantee has been duly and validly authorized by the Company
and, when executed and delivered by the Company at the Closing Date, will
constitute a valid and legally binding agreement of the Company enforceable
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (regardless of whether the issue of enforceability is
considered in a proceeding at law or in equity); the Guarantee has been
duly qualified under the Trust Indenture Act; and the Guarantee conforms
to the description thereof contained in the Prospectus.
(12) The Base Indenture has been duly and validly authorized and
executed by the Company; the Supplemental Indenture has been duly and
validly authorized by the Company; when the Supplemental Indenture has been
executed and delivered by the Company at the Closing Date, assuming due
authorization, execution and delivery by the Debt Trustee, at such Closing
Date, the Indenture will constitute a valid and legally binding agreement
of the Company enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity); and the
Indenture is duly qualified under the Trust Indenture Act.
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(13) The Subordinated Debt Securities have been duly and validly
authorized by the Company and, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by
the Trust in accordance with the Declaration, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles
(regardless of whether the issue of enforceability is considered in a
proceeding at law or in equity); and the Subordinated Debt Securities
conform to the description thereof contained in the Prospectus.
(14) The issuance and sale of the Preferred Securities by the Trust
and the performance by the Trust of its obligations under this Agreement
will not conflict with, result in a breach of any of the terms or
provisions of, or constitute a default under, the Declaration or any
indenture, mortgage, deed of trust or other material agreement or
instrument to which the Trust 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 Trust was or is now a party or by which it is
bound.
(15) The issuance and sale of the Offered Securities and the
Subordinated Debt Securities and the performance by each of the Company or
the Trust, as the case may be, of its respective obligations under the
terms of this Agreement, the Guarantee, the Indenture and the Declaration
will not conflict with, 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.
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(16) No authorization, approval, consent or order of any Delaware
court or governmental authority or agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the Common
Securities and the Preferred Securities or the purchase by the Trust of the
Subordinated Debt Securities.
(17) The accountants who certified the financial statements and
supporting schedules incorporated by reference in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(18) Except to the extent set forth in the Prospectus, neither the
Trust nor the Company has received any notice of, nor does it have any
actual knowledge of, any failure by it or, in the case of the Company, any
of its significant subsidiaries to be in substantial compliance with all
existing statutes and regulations applicable to it or, in the case of the
Company, such subsidiaries, which failure would materially and adversely
affect the conduct of the business of the Trust or of the Company and its
subsidiaries, considered as a whole.
(19) The statements set forth in the Prospectus under the caption
"Certain Federal Income Tax Consequences," insofar as they purport to
describe the provisions of the law referred to therein, are accurate and
complete in all material respects.
(20) The Trust will be classified as a "grantor trust" for United
States federal income tax purposes and is not and will not be classified as
an association taxable as a partnership or a corporation for United States
federal income tax purposes under federal income tax laws as currently in
effect.
(21) Neither the Trust nor the Company is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
neither the Trust nor the Company is subject to regulation under such Act.
(b) Any certificate signed by any Regular Trustee of the Trust or officer
of the Company and delivered to the Representatives or to counsel for the
Underwriters pursuant to the
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terms of this Agreement shall be deemed a representation and warranty by the
Trust or the Company, as the case may be, to the Underwriters as to the matters
covered thereby.
SECTION 6. Indemnification. Each of the Trust and the Company agrees,
---------------
jointly and severally, to indemnify and hold harmless each Underwriter, and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 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 Trust or the Company by any Underwriter through the
Representatives expressly for use therein; provided, however, that neither the
Trust nor the Company shall indemnify any Underwriter or any person who controls
any 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 Trust or the Company advised such Underwriter 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 Trust and the Company to keep the same
current and effective has
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expired. This indemnity will be in addition to any liability which the Trust or
the Company may otherwise have. All fees and expenses which are reimbursable
pursuant to this Section 6 shall be reimbursed as they are incurred.
If any action or proceeding (including any governmental investigation)
shall be brought or asserted against any Underwriter or any person controlling
such Underwriter in respect of which indemnity may be sought from the Trust or
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 such Underwriter
and the payment of all expenses. Any omission so to notify the Company shall
not, however, relieve the Trust or the Company from any liability which either
such party 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 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 such Underwriter 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 either of the Trust or the Company, and such Underwriter or such controlling
person shall have been advised by counsel to such Underwriter that there may be
a conflict of interest between such Underwriter or such controlling person and
either of the Trust or the Company in the conduct of the defense of such action
(in which case, if the Underwriter or such controlling person notifies the Trust
and the Company in writing that it elects to employ separate counsel at the
expense of the Trust and the Company, neither the Trust nor the Company shall
have the right to assume the defense of such action or proceeding on behalf of
the Underwriter or such controlling person), it being understood, however, that
neither the Trust nor the Company shall, 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
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such firm are not admitted to practice in a jurisdiction where an action is
pending, in which case the Trust and 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). Neither the Trust nor the Company
shall 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 Trust and the Company agree to indemnify and hold harmless such 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 each of
the Trust, including its trustees, and the Company, including its directors and
each of its officers, and each person, if any, who controls the Trust or the
Company within the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act, to the same extent as the foregoing indemnity from the Trust and
the Company to such 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 Trust or its trustees or the Company or the Company's
directors or officers or any such controlling person, in respect of which
indemnity may be sought against an Underwriter, such Underwriter shall have the
rights and duties given to the Trust and the Company, and the Trust or its
trustees or the Company or the Company's directors or officers or such
controlling person shall have the rights and duties given to such Underwriter 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
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(i) in such proportion as is appropriate to reflect the relative benefits
received by the Trust and 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 Trust or
Company on the one hand and of 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 Trust or 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 Trust and
the Company bear to the total underwriting discounts received by the
Underwriters in respect thereof. The relative fault of the Trust or 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 Trust or the Company or by the
Underwriters 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.
Each of the Trust, the Company and the Underwriters 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, no Underwriter shall 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 such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged
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omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution 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 Trust and 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 such Underwriter or by or on behalf of the Trust or
the Company, (b) acceptance of any of the Offered Securities and payment
therefor or (c) any termination of this Agreement.
SECTION 7. Conditions of the Obligations of the Underwriters.
-------------------------------------------------
The obligations of the several Underwriters hereunder are subject to the
following conditions:
(a) At the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission; and the
Representatives shall have received a certificate, dated the Closing Date
and signed by (i) two Regular Trustees of the Trust and (ii) the Chairman
of the Board, the President, an Executive Vice President or the Senior Vice
President-Finance and Treasurer of the Company (each of whom may, as to
threatened proceedings, rely upon the best of his information and belief),
to such effect and to the effect set forth in clause (e) of this Section 7.
(b) At the Closing Date the Representatives shall have received:
(1) The opinions, dated as of the Closing Date, and reasonably
satisfactory to counsel for the Underwriters, from Messrs. Cole, Raywid &
Braverman or such other special communications counsel for the Company as
may be reasonably satisfactory to the Representatives and from the General
Counsel of the Company to the following effect and covering such additional
matters as the Representatives may reasonably request:
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(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 with 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, the Guarantee, the
Indenture and the Declaration;
(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 Subordinated Debt
Securities and the Guarantee and the sale of the Subordinated Debt
Securities and the Guarantee by the Company as contemplated by 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 Trust or 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 by the Trust of this Agreement
and the Declaration, the issuance of the
21
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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 Declaration 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 Trust 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 Trust,
except that such counsel need not express any opinion with respect to
(i) matters opined upon by Messrs. Richards, Layton & Finger or (ii)
the Blue Sky laws of any jurisdiction;
(vii) The execution and delivery by the Company of this Agreement,
the Guarantee, the Indenture and the Declaration, the issuance of the
Subordinated Debt Securities and the Guarantee 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 Company's charter
or bylaws 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 significant 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 L.L.C. or (ii) the
Blue Sky laws of any jurisdiction;
(viii) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear or any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity;
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(ix) The Property Trustee is the record holder of Subordinated
Debt Securities and no security interest, mortgage, pledge, lien,
encumbrance, claim or equity is noted thereon or on the securities
register; and
(x) To the best knowledge of such counsel, neither the
Registration Statement nor the Prospectus, as amended or supplemented,
if applicable (expect as to the financial statements and schedules and
any other financial and statistical 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 the Prospectus
was first filed with the Commission, 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.
(2) from Sherman & Howard L.L.C., special counsel to the Trust and the
Company, to the following effect and covering such additional matters as
the Representatives may reasonably request:
(i) The execution and delivery of this Agreement, the Guarantee
and the Indenture, the issuance of the Offered Securities, the
Subordinated Debt Securities and the Guarantee and the fulfillment of
the terms of this Agreement, the Guarantee and the Indenture do not,
to our knowledge, 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 the Company's
significant subsidiaries (as such term is defined in Rule 1.02(w) of
Regulation S-X) 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.
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(3) from Baker & Botts, L.L.P., special counsel to the Trust and the
Company, to the following effect and covering such additional matters as
the Representatives may reasonably request:
(i) This Agreement, the Guarantee, the Indenture and the
Declaration have been duly authorized, executed and delivered by the
Company; and each of the Guarantee 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) Each of the Guarantee, the Indenture and the Declaration has
been duly qualified under, and complies in all material respects with
the requirements of, the Trust Indenture Act;
(iii) The Subordinated Debt Securities, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Trust at the Closing Date, 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,
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 Trust and the Company jointly meet the requirements for
use of Form S-3 under the 1933 Act. The Registration Statement is
effective under the 1933 Act and, to the best of such counsel's
knowledge and
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information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission;
(v) Each of the Preferred Securities, the Guarantee and the
Subordinated Debt Securities conforms in all material respects as to
legal matters to the descriptions thereof in the Prospectus (as
amended or supplemented, if applicable);
(vi) The Trust is not an "investment company" within the meaning
of Section 3(a) of the Investment Company Act of 1940, as amended, and
is not subject to regulation under such Act; and
(vii) The statements set forth in the Prospectus under the
caption "Certain Federal Income Tax Consequences," insofar as they
purport to describe the provisions of law referred to therein, are
accurate and complete in all material respects.
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. 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 Trust or the Company and take no responsibility
for the accuracy, completeness or fairness of the statements contained
therein except insofar as such statements relate to the description of the
Offered Securities or relate to us. However, in connection with the
preparation of the Registration Statement and the Prospectus, we had
conferences with certain trustees or officers and other representatives of
25
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the Trust and 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 trustees or officers and other
representatives of the Trust and 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 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."
In giving such opinions, such counsel may rely (x) as to matters of
fact, to the extent they deem proper, upon certificates of trustees or
officers of the Trust or 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 L.L.C. 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 Trust or the Company,
provided that such counsel are satisfactory to the Representatives and
counsel retained by the Representatives on behalf of the Underwriters.
(4) from Messrs. Richards, Layton & Finger, special Delaware counsel to the
Trust, to the following effect and covering such additional matters as the
Representatives may reasonably request:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have
been
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made; under the Delaware Act and the Declaration, the Trust has the
business trust power and authority to (x) own property and conduct its
business, all as described in the Prospectus, (y) enter into and
perform its obligations under this Agreement, and (z) issue and
perform its obligations under the Preferred Securities and the Common
Securities.
(ii) Assuming the Declaration has been duly authorized, executed
and delivered by the Trustees and the Company, the Declaration is the
valid and binding obligation of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with
its terms, subject to bankruptcy, insolvency, reorganization,
moratorium, receivership, liquidation, fraudulent conveyance, other
similar laws relating to or affecting creditors' rights and to
principles of equity, including applicable law relative to fiduciary
duty (regardless of whether considered in a proceeding at law or in
equity) and the effect of applicable public policy on the
enforceability of provisions relating to indemnification or
contribution.
(iii) Under the Delaware Act and the Declaration, the execution
and delivery by the Trust of this Agreement, and the performance by
the Trust of its obligations thereunder, have been duly authorized by
all necessary business trust action on the part of the Trust.
(iv) The Common Securities have been duly authorized by the
Declaration and, when delivered to and paid for pursuant to the
Declaration, will be validly issued and represent undivided beneficial
interests in the assets of the Trust; and under the Delaware Act and
the Declaration, the issuance of the Common Securities is not subject
to preemptive rights.
(v) The Preferred Securities have been duly authorized by the
Declaration and, when delivered to and paid for pursuant to this
Agreement, will be validly issued and fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders
of the Preferred Securities, as beneficial owners
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<PAGE>
of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
and under the Delaware Act and the Declaration, the issuance of the
Preferred Securities is not subject to preemptive rights. Such counsel
may note that the Preferred Security holders may be obligated,
pursuant to the Declaration, to (i) provide indemnity and/or security
in connection with and pay taxes or governmental charges arising from
transfers of Preferred Security Certificates and the issuance of
replacement Preferred Security Certificates, and (ii) provide security
and indemnity in connection with requests of or directions to the
Property Trustee to exercise its rights and powers under the
Declaration.
(vi) The issuance and sale by the Trust of the Preferred
Securities and Common Securities; the execution, delivery and
performance by the Trust of this Agreement; the consummation of the
transactions contemplated herein and therein; and compliance by the
Trust with its obligations hereunder and thereunder will not violate
any of the provisions of the Certificate of Trust or the Declaration,
or any applicable Delaware law or administrative regulation.
(vii) Assuming that the Trust derives no income from or in
connection with sources within the State of Delaware and has no
assets, activities (other than having a Delaware Trustee as required
by the Delaware Act and the filing of documents with the Delaware
Secretary of State) or employees in the State of Delaware, no
authorization, approval, consent or order of any Delaware court or
governmental authority or agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the Common
Securities and the Preferred Securities or the purchase by the Trust
of the Subordinated Debt Securities.
(c) The Representatives shall have received on the Closing Date from
Messrs. Brown & Wood, 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
28
<PAGE>
Statement and 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
therein, as to which no opinion need be expressed) comply as to form in all
material respects with the Act.
(d) On the Closing Date, the Representatives shall have received from
KPMG Peat Marwick LLP a letter, dated as of the Closing Date, in form and
substance reasonably satisfactory to the Representatives.
(e) The representations and warranties of the Trust and the Company in
this Agreement shall be true and correct on and as of the Closing Date;
each of the Trust and 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 change in the condition (financial or otherwise), business,
prospects or results of operations of the Trust or of the Company and its
subsidiaries, considered as a whole.
(f) Subsequent to the date hereof, 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 Trust or
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.
(g) At the Closing Date the Offered Securities shall have been
approved for listing on the New York Stock Exchange and the Trust and the
Company shall have filed all notices and documents required by the New York
Stock Exchange of companies that have similar securities quoted on such
exchange.
29
<PAGE>
SECTION 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 Trust and the Company from the Representatives,
without liability on the part of the Underwriters to the Trust or 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
Trust or 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.
SECTION 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 underwriters, to purchase all, but not less than
all, of the Defaulted Securities in such amounts as may be approved by the
Representatives and upon the terms herein set forth; if, however, the
Representatives have not completed such arrangements within such 24-hour period,
then:
(a) if the 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
30
<PAGE>
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 Trust
and 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.
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.
SECTION 10. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Representatives shall be directed to Lehman Brothers Inc., 3 World Financial
Center, 200 Vesey Street, New York, New York 10285, attention Karen Hanovice;
and notices to each of the Trust and the Company shall be directed to it at its
office at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000,
attention: Bernard W. Schotters, Senior Vice President -Finance of the Company.
SECTION 11. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon the Underwriters, the Trust and the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Trust and the Company and their
respective successors and legal representatives and the controlling persons and
trustees, officers and directors referred to in Section
31
<PAGE>
6 hereof and their respective successors, heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Trust and the Company and their respective successors and
legal representatives and said controlling persons, trustees, officers and
directors and their respective successors, heirs and legal representatives, and
for the benefit of no other person, firm or corporation. No purchaser of Offered
Securities from the Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 12. Governing Law and Time. This Agreement shall be governed by
----------------------
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified times of day refer
to New York City time.
32
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Trust and the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
TCI COMMUNICATIONS FINANCING II
By: /s/ Stephen M. Brett
--------------------------------
Name: Stephen M. Brett
as Regular Trustee
By: /s/ Bernard W. Schotters
--------------------------------
Name: Bernard W. Schotters
as Regular Trustee
TCI COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
--------------------------------
Name: Stephen M. Brett
Title: Senior Vice President
CONFIRMED AND ACCEPTED, as of the
date first above written:
BY: LEHMAN BROTHERS INC.
By: /s/ Robert H. Swindell
----------------------------------
Authorized Signatory
for themselves and as Representatives
of other underwriters named in Schedule A
hereto.
33
<PAGE>
SCHEDULE A
Number of Preferred
Underwriter Securities*
----------- -------------------
Lehman Brothers Inc....................... 1,750,000
Bear, Stearns & Co. Inc................... 1,750,000
A.G. Edwards & Sons, Inc.................. 1,750,000
Merrill Lynch, Pierce, Fenner & Smith..... 1,750,000
Incorporated
Morgan Stanley & Co. Incorporated......... 1,750,000
PaineWebber Incorporated.................. 1,750,000
Prudential Securities Incorporated........ 1,750,000
Smith Barney Inc.......................... 1,750,000
J.C. Bradford & Co........................ 200,000
Alex. Brown & Sons Incorporated........... 200,000
CS First Boston Corporation.............. 200,000
Dain Bosworth Incorporated................ 200,000
Dillon, Read & Co. Inc.................... 200,000
Donaldson, Lufkin & Jenrette Securities... 200,000
Corporation
Everen Securities, Inc.................... 200,000
Goldman, Sachs & Co....................... 200,000
Legg Mason Wood Walker, Incorporated...... 200,000
Oppenheimer & Co., Inc.................... 200,000
Piper Jaffray Inc......................... 200,000
The Robinson-Humphrey Company, Inc........ 200,000
Advest, Inc............................... 100,000
JW Charles Securities, Inc................ 100,000
Coast Partners Securities, Inc............ 100,000
Cowen & Company........................... 100,000
Craigie Incorporated...................... 100,000
Davenport & Co. of Virginia, Inc.......... 100,000
Fahnestock & Co. Inc...................... 100,000
- -------------------
* Each Preferred Security includes the related guarantee of the Company under
the Guarantee.
34
<PAGE>
First Albany Corporation.................. 100,000
First Southwest Company................... 100,000
Furman Selz LLC........................... 100,000
Gibraltar Securities Co................... 100,000
Gruntal & Co., Incorporated............... 100,000
Interstate/Johnson Lane Corporation....... 100,000
Janney Montgomery Scott Inc............... 100,000
Josephthal Lyon & Ross Incorporated....... 100,000
Kennedy Cabot & Company Inc............... 100,000
McDonald & Company Securities, Inc........ 100,000
McGinn, Smith & Co., Inc.................. 100,000
Mesirow Financial, Inc.................... 100,000
Morgan Keegan & Company, Inc.............. 100,000
The Ohio Company.......................... 100,000
Parker/Hunter Incorporated................ 100,000
Principal Financial Securities, Inc....... 100,000
Pryor, McClendon, Counts & Co., Inc....... 100,000
Rauscher Pierce Refsnes, Inc.............. 100,000
Raymond James & Associates, Inc........... 100,000
Roney & Co................................ 100,000
Scott & Stringfellow, Inc................. 100,000
Muriel Siebert & Co., Inc................. 100,000
Stephens Inc.............................. 100,000
Sterne, Agee & Leach, Inc................. 100,000
Stifel, Nicolaus & Company, Incorporated.. 100,000
Tucker Anthony Incorporated............... 100,000
U.S. Clearing Corp........................ 100,000
Wedbush Morgan Securities................. 100,000
Wheat, First Securities, Inc.............. 100,000
---------
TOTAL: 20,000,000
35
<PAGE>
EXHIBIT 4
TCI COMMUNICATIONS, INC.
AND
THE BANK OF NEW YORK,
Trustee
-------------------
SECOND SUPPLEMENTAL
INDENTURE
TO
INDENTURE
Dated as of May 22, 1996
-------------------
10% Subordinated Deferrable Interest Notes due May 31, 2045
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms................................... 2
Section 1.2. Interpretation........................................ 3
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1. Designation and Principal Amount...................... 3
Section 2.2. Maturity.............................................. 3
Section 2.3. Form and Payment...................................... 3
Section 2.4. Global Note........................................... 4
Section 2.5. Interest.............................................. 5
ARTICLE III
REDEMPTION OF THE NOTES
Section 3.1. Special Event Redemption.............................. 5
Section 3.2. Optional Redemption by Company........................ 6
Section 3.3. No Sinking Fund....................................... 7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period.................. 7
Section 4.2. Notice of Extension................................... 7
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses................................... 8
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate.............................. 9
Section 6.2. Default on Senior Indebtedness........................ 9
<PAGE>
Section 6.3. Liquidation; Dissolution; Bankruptcy.................. 10
Section 6.4. Subrogation........................................... 11
Section 6.5. Trustee to Effectuate Subordination................... 12
Section 6.6. Notice by the Company................................. 12
Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness. 13
Section 6.8. Subordination May Not Be Impaired. 13
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
Section 7.1. Listing on Exchange................................... 14
ARTICLE VIII
FORM OF NOTE
Section 8.1. Form of Note.......................................... 14
ARTICLE IX
ORIGINAL ISSUE OF NOTES
Section 9.1. Original Issue of Notes............................... 20
ARTICLE X
CERTAIN COVENANTS
Section 10.1. Limitation on Dividends and Other Payments............ 20
Section 10.2. Covenants as to the Trust............................. 21
ARTICLE XI
CERTAIN EVENTS OF DEFAULT
Section 11.1. Additional Events of Default.......................... 22
Section 11.2. Waiver of Existing Defaults........................... 22
ARTICLE XII
MISCELLANEOUS
Section 12.1. Supplemental Indenture Incorporated Into Indenture.... 22
Section 12.2. Trustee Not Responsible for Recitals; Disclaimer...... 22
Section 12.3. Governing Law......................................... 23
Section 12.4. Separability.......................................... 23
Section 12.5. Counterparts.......................................... 23
ii
<PAGE>
Section 12.6. Acknowledgment of Rights of Holders of Preferred
Securities............................................ 23
Section 12.7. Pari Passu Debt....................................... 23
iii
<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of May 22, 1996 (this "Second
Supplemental Indenture"), between TCI Communications, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Trustee"), under the Indenture dated as of January 29, 1996 between the Company
and the Trustee (the "Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's unsecured subordinated
Securities, to be issued from time to time in one or more series as might be
determined by the Company in accordance with the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered as provided
in the Indenture; and
WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of its Securities to be known as
its 10% Subordinated Deferrable Interest Notes due May 31, 2045 (the "Notes"),
the form and substance of such Notes and the terms, provisions and conditions
thereof to be as set forth in the Indenture and this Second Supplemental
Indenture; and
WHEREAS, TCI Communications Financing II, a Delaware statutory business
trust (the "Trust"), has offered to the public $500 million aggregate stated
liquidation amount of its 10% Trust Preferred Securities (the "Preferred
Securities") and has offered to the Company $15,463,925 aggregate stated
liquidation amount of its common securities (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities"), such Trust
Securities representing undivided beneficial interests in the assets of the
Trust, and proposes to invest the proceeds from such offering in $515,463,925
aggregate principal amount of the Notes; and
WHEREAS, the Company has requested the Trustee to execute and deliver this
Second Supplemental Indenture, and all requirements necessary to make this
Second Supplemental Indenture a valid instrument, in accordance with its terms,
and to make the Notes, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Second Supplemental Indenture
has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the Notes
by the holders thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Notes and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee as
follows:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1. Definition of Terms. Unless the context otherwise
requires, (a) a term defined in the Indenture has the same meaning when used in
this Second Supplemental Indenture, (b) a term defined anywhere in this Second
Supplemental Indenture has the same meaning throughout and (c) the following
terms have the meanings given to them in the Declaration (including, without
limitation, Annex I thereto):
Clearing Agency
Delaware Trustee
No Recognition Opinion
Preferred Securities Guarantee
Preferred Security Certificate
Pro Rata
Property Trustee
Purchase Agreement
Regular Trustee
Special Event
Tax Event
Tax Event Opinion
In addition, the following terms have the following respective
meanings:
"Declaration" means the Amended and Restated Declaration of Trust of
TCI Communications Financing II, a Delaware business trust, dated as of May 22,
1996.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration and the Notes held by the Property Trustee are to be distributed
to the holders of the Trust Securities Pro Rata in accordance with the
Declaration.
"Maturity Date" means the date on which the Notes mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Additional Interest, if any.
"Senior Indebtedness" means (i) any payment in respect of (A)
indebtedness of the Company for money borrowed and (B) indebtedness evidenced by
securities, debentures, bonds, notes or other similar instruments issued by the
Company, (ii) all capital lease obligations of the Company, (iii) all
obligations of the Company issued or assumed as the deferred purchase price of
property, all conditional sale obligations of the Company and all obligations of
such obligor under any title retention agreement (but excluding trade accounts
payable arising in the
2
<PAGE>
ordinary course of business); (iv) all obligations of the Company for
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the type referred
to in clauses (i) through (iv) of other Persons for the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise; and (vi)
all obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any lien on any property or asset of the Company (whether or
not such obligation is assumed by such obligor), except for any such
indebtedness that is by its terms subordinated to or pari passu with the Notes,
as the case may be. For greater certainty, "Senior Indebtedness" includes all
indebtedness between or among the Company and its Affiliates, except for such
indebtedness that is by its terms subordinated to or pari passu with the Notes,
as the case may be.
Section 1.2. Interpretation. Each definition in this Second
Supplemental Indenture includes the singular and the plural, and references to
the neuter gender include the masculine and feminine where appropriate. Terms
which relate to accounting matters shall be interpreted in accordance with
generally accepted accounting principles in effect from time to time.
References to any statute mean such statute as amended at the time and include
any successor legislation. The word "or" is not exclusive, and the words
"herein," "hereof" and "hereunder" refer to this Second Supplemental Indenture
as a whole. References to Articles and Sections are to the Articles and
Sections of this Second Supplemental Indenture. The headings to the Articles
and Sections are for convenience of reference and shall not affect the meaning
or interpretation of this Second Supplemental Indenture.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1. Designation and Principal Amount. There is hereby
authorized a series of Securities designated the "10% Subordinated Deferrable
Interest Notes due May 31, 2045." The aggregate principal amount of Notes which
may be authenticated and delivered under the Indenture is limited to
$515,463,925 (except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections
2.08, 2.09, 2.11, 3.07 or 9.05 of the Indenture and except for any Notes which
pursuant to Section 2.04 of the Indenture are deemed not to have been
authenticated and delivered pursuant to the Indenture).
Section 2.2. Maturity. The Maturity Date will be May 31, 2045.
Section 2.3. Form and Payment. Except as provided in Section 2.4,
the Notes shall be issued in fully registered certificated form without interest
coupons. Principal and interest on the Notes issued in certificated form will
be payable, the transfer of such Notes will be registrable and such Notes will
be exchangeable for Notes bearing identical terms and provisions at the office
or agency of the Trustee in New York, New York, provided, however,
3
<PAGE>
that payment of interest may be made at the option of the Company by check
mailed to the registered Holder at such address as shall appear in the security
register maintained by the Registrar. Notwithstanding the foregoing, so long as
the registered Holder of any Notes is the Property Trustee, the payment of the
principal of and interest (including Additional Interest, if any) on such Notes
held by the Property Trustee will be made at such place and to such account as
may be designated by the Property Trustee.
Section 2.4. Global Note. In connection with a Dissolution Event:
(a) Notes in certificated form may be presented to the Trustee by the
Property Trustee in exchange for a global Note in an aggregate principal amount
equal to the aggregate principal amount of the Notes so presented, to be
registered in the name of the The Depository Trust Company ("DTC"), as the
initial Clearing Agency for the Notes, or the nominee of DTC, and delivered by
the Trustee to DTC for crediting to the accounts of its participants pursuant to
the instructions of the Regular Trustees. The Company, upon any such
presentation, shall execute a global Note in such aggregate principal amount and
deliver the same to the Trustee for authentication and delivery in accordance
with the Indenture and this Second Supplemental Indenture. Payments on the
Notes issued as a global Note will be made to DTC (or a successor Clearing
Agency); and
(b) If any Preferred Securities are held in certificated form (i.e.,
not in book entry form), Notes in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities (other than Preferred Securities held by DTC (or
a successor Clearing Agency) or its nominee) ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests in Notes in
certificated form presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate stated liquidation amount of
the Non Book-Entry Preferred Securities until such Preferred Security
Certificates are presented to the Registrar for transfer or reissuance, at which
time such Preferred Security Certificates will be canceled and a Note,
registered in the name of the holder of such Preferred Security Certificate or
the transferee of the holder of such Preferred Security Certificate, as the case
may be, with an aggregate principal amount equal to the aggregate stated
liquidation amount of the Preferred Security Certificate canceled, will be
executed by the Company and delivered to the Trustee for authentication and
delivery in accordance with the Indenture and this Second Supplemental
Indenture. On issue of such Notes, Notes in certificated form with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been canceled.
Section 2.5. Interest. (a) Each Note will bear interest at the rate
of 10% per annum (the "Coupon Rate") from the original date of issuance until
the principal thereof becomes
4
<PAGE>
due and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the Coupon Rate, compounded quarterly, payable (subject to the
provisions of Article IV) quarterly in arrears on March 31, June 30, September
30 and December 31 of each year (each, an "Interest Payment Date"), commencing
on June 30, 1996, to the Person in whose name such Note or any predecessor Note
is registered, at the close of business on the Regular Record Date for such
interest installment, which shall be the close of business on the Business Day
next preceding that Interest Payment Date. If pursuant to the provisions of
Section 2.08 of the Indenture the Notes are no longer represented by a global
Security, the Company may select a regular record date for such interest
installment which shall be any date at least fifteen days before an Interest
Payment Date.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any date
on which interest is payable on the Notes is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The amount of
interest payable for any period shorter than a full quarterly period for which
interest is computed will be computed on the basis of the actual number of days
elapsed in such a 90-day quarter.
(c) If at any time while the Property Trustee is the Holder of any
Notes, the Trust or the Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
case, the Company will pay as additional interest ("Additional Interest") on the
Notes held by the Property Trustee, such additional amounts as shall be required
so that the net amounts received and retained by the Trust and the Property
Trustee after paying such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Property Trustee would
have received had no such taxes, duties, assessments or other governmental
charges been imposed.
ARTICLE III
REDEMPTION OF THE NOTES
Section 3.1. Special Event Redemption. If a Tax Event has occurred and
is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
5
<PAGE>
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution Tax Opinion
that a No Recognition Opinion cannot be delivered to the Trust,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company
shall have the right, upon not less than 30 nor more than 60 days notice to the
registered Holders of the Notes, to redeem the Notes, in whole or in part, for
cash within 90 days following the occurrence of such Tax Event (the "90 Day
Period") at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest thereon to the date of such
redemption (the "Special Redemption Price"), provided, that if at the time there
is available to the Company the opportunity to eliminate, within the 90 Day
Period, the Tax Event by taking some ministerial action ("Ministerial Action"),
such as filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Company, the Trust or the
holders of the Trust Securities, the Company shall pursue such Ministerial
Action in lieu of redemption; and provided further, that the Company shall have
no right to redeem the Notes while the Trust is pursing any Ministerial Action
pursuant to its obligations under the Declaration. The Special Redemption Price
shall be paid prior to 12:00 noon, New York time, on the date of such redemption
or at such earlier time as the Company determines and specifies in the notice of
redemption, provided the Company shall deposit with the Trustee an amount
sufficient to pay the Special Redemption Price by 11:00 a.m. on the date such
Special Redemption Price is to be paid.
Section 3.2. Optional Redemption by Company. (a) Subject to the
provisions of Article Three of the Indenture and to Section 3.2(b), the Company
shall have the right to redeem the Notes, in whole or in part, from time to
time, on or after May 31, 2001, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption (the "Optional Redemption Price"). Any redemption
pursuant to this paragraph will be made upon not less than 30 nor more than 60
days notice to the registered Holder of the Notes, at the Optional Redemption
Price. If the Notes are only partially redeemed pursuant to this Section 3.2,
the Notes will be redeemed pro rata or by lot or by any other method utilized by
the Trustee; provided, that if at the time of redemption the Notes are
registered as a global Security, the Depositary shall determine by lot the
principal amount of such Notes held by each Noteholder to be redeemed. The
Optional Redemption Price shall be paid prior to 12:00 noon, New York time, on
the date of such redemption or at such earlier time as the Company determines
and specifies in the notice of redemption, provided the Company shall deposit
with the Trustee an amount sufficient to pay the Optional Redemption Price by
11:00 a.m. on the date such Optional Redemption Price is to be paid.
(b) If a partial redemption of the Notes would result in the delisting
of the Preferred Securities issued by the Trust from any national securities
exchange or other organization on which the Preferred Securities are then
listed, the Company shall not be permitted to effect such partial redemption and
may only redeem the Notes in whole.
6
<PAGE>
Section 3.3. No Sinking Fund. The Notes are not entitled to the
benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period. The Company shall
have the right, at any time and from time to time prior to the Maturity Date, to
extend the interest payment period of such Notes for up to twenty (20)
consecutive quarters (the "Extended Interest Payment Period"). To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this Section
4.1, will bear interest compounded quarterly at the Coupon Rate for each quarter
of the Extended Interest Payment Period ("Compounded Interest"). At the end of
the Extended Interest Payment Period, the Company shall pay all interest accrued
and unpaid on the Notes, including any Additional Interest ("Deferred
Interest"), which shall be payable to the Holders of the Notes in whose names
the Notes are registered in the security register maintained by the Registrar on
the first Regular Record Date after the end of the Extended Interest Payment
Period. Before the termination of any Extended Interest Payment Period, the
Company may further extend such period, provided that such period together with
all such further extensions thereof shall not exceed twenty (20) consecutive
quarters or extend beyond the Maturity Date. Upon the termination of any
Extended Interest Payment Period and upon the payment of all Deferred Interest
then due, the Company may select a new Extended Interest Payment Period, subject
to the foregoing requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof.
Section 4.2. Notice of Extension. (a) If the Property Trustee is
the only registered Holder of the Notes at the time the Company selects an
Extended Interest Payment Period, the Company shall give written notice to both
the Regular Trustees and the Property Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities are payable, or
(ii) the date the Trust is required to give notice of the record or payment date
for such Distributions to the New York Stock Exchange or other applicable self-
regulatory organization or to holders of the Preferred Securities, but in any
event at least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Notes at the
time the Company selects an Extended Interest Payment Period, the Company shall
give the Holders of the Notes and the Trustee written notice of its selection of
such Extended Interest Payment Period ten (10) Business Days before the earlier
of (i) the next succeeding Interest Payment Date, or (ii) the date the Company
is required to give notice of the record or payment date of such
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interest payment to the New York Stock Exchange or other applicable self-
regulatory organization or to Holders of the Notes.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the twenty quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses. In connection with the offering,
sale and issuance of the Notes to the Property Trustee in connection with the
sale of the Trust Securities by the Trust, and in connection with the
maintenance of the Trust for so long as the Trust Securities are outstanding,
the Company shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Notes, including commissions to the underwriters payable
pursuant to the Purchase Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 7.07 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
offering, sale and issuance of the Trust Securities (including commissions to
the underwriters payable pursuant to the Purchase Agreement), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without limitation,
costs and expenses of accountants, attorneys, statistical or bookkeeping
services, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), any Clearing Agency
for the Notes, duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations arising
with respect to the Declaration;
(d) pay any and all taxes, duties, assessments or governmental charges
of whatever nature (other than United States withholding taxes attributable to
the Trust or its assets) imposed on the Trust or its assets and all liabilities,
costs and expenses of the Trust with respect to such taxes, duties, assessments
or governmental charges; and
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(e) pay any and all fees and expenses related to the enforcement by
the Property Trustee of the rights of the holders of the Preferred Securities.
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate. The Company covenants and
agrees, and each holder of Notes issued hereunder by such holder's acceptance
thereof likewise covenants and agrees, that all Notes shall be issued subject to
the provisions of this Article VI; and each holder of a Note, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest on all Notes issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Second Supplemental Indenture or thereafter incurred.
This Article shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness and such holders are made obligees hereunder and they and/or
each of them may enforce such provisions.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default with respect to the Notes.
Section 6.2. Default on Senior Indebtedness. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other amount due on any Senior Indebtedness, or in the
event that the maturity of any Senior Indebtedness has been accelerated because
of a default, then, in either case, no payment shall be made by the Company to
the Holders of the Notes with respect to the principal (including redemption and
sinking fund payments) of, or premium, if any, or interest on, or any other
amount owing in respect of, the Notes.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder of the Notes when such payment is
prohibited by the preceding paragraph of this Section 6.2, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a
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trustee) notify the Trustee within 90 days of such payment of the amounts then
due and owing on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.
Section 6.3. Liquidation; Dissolution; Bankruptcy. Upon any payment
by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness shall first be
paid in full, or payment thereof provided for in money in accordance with its
terms, before any payment or distribution is made by the Company to the Holders
of the Notes on account of the principal of, premium, if any, or interest on, or
any other amount owing in respect of, the Notes; and upon any such dissolution
or winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Notes or the Trustee would
be entitled to receive from the Company, except for the provisions of this
Article VI, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders of the Notes or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders of Notes or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Notes before all Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Senior Indebtedness
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear, as
calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or
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readjustment, the payment of which is subordinated at least to the extent
provided in this Article VI with respect to the Notes to the payment of all
Senior Indebtedness that may at the time be outstanding, provided that (i) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders of
such Senior Indebtedness are not, without the consent of such holders, altered
by such reorganization or readjustment. The consolidation of the Company with,
or the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article Five of the Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 6.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article Five of the Indenture. Nothing in Section 6.2 or in this Section 6.3
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07 of the Indenture.
Section 6.4. Subrogation. Subject to the payment in full of all
Senior Indebtedness, the rights of the Holders of the Notes shall be subrogated
to the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to such
Senior Indebtedness until the principal of, premium, if any, and interest on,
and all other amounts owing in respect of, the Notes shall be paid in full; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or securities to which
the Holders of the Notes or the Trustee would be entitled except for the
provisions of this Article VI, and no payment over pursuant to the provisions of
this Article VI, to or for the benefit of the holders of such Senior
Indebtedness by Holders of the Notes or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Notes be deemed to be a payment by the Company to or on account
of such Senior Indebtedness. It is understood that the provisions of this
Article VI are and are intended solely for the purposes of defining the relative
rights of the Holders of the Notes, on the one hand, and the holders of Senior
Indebtedness on the other hand.
Nothing contained in this Article VI or elsewhere in this Second
Supplemental Indenture or the Indenture or in the Notes is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Notes, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Notes the principal
of (and premium, if any) and interest on and all other amounts owing in respect
of the Notes as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders of the Notes and creditors of the Company, other than the holders of
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
the Holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under the Indenture, as amended and supplemented by
this Second Supplemental Indenture, subject to the rights, if any, under this
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Article VI of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article VI, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, and the Holders of the Notes, shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Notes, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article VI.
Section 6.5. Trustee to Effectuate Subordination. Each Holder of a
Note by such holder's acceptance thereof authorizes and directs the Trustee on
such holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article VI and appoints the
Trustee such holder's attorney-in-fact for any and all such purposes.
Section 6.6. Notice by the Company. The Company shall give prompt
written notice to a Trust Officer of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Notes pursuant to the provisions of this Article VI. Notwithstanding the
provisions of this Article VI or any other provision of the Indenture and this
Second Supplemental Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Notes pursuant to the provisions
of this Article VI unless and until a Trust Officer shall have received written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any representative or trustee therefor; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 6.6 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Note) then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness (or a
representative or trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a
representative or trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good
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faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article VI, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article VI, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article VI in respect of any Senior Indebtedness at any time held
by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture or this Second Supplemental Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to the provisions of Section 7.01 of
the Indenture, the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall pay over or deliver to Holders of Notes, the Company or
any other Person money or assets to which any holder of Senior Indebtedness
shall be entitled by virtue of this Article VI or otherwise.
Section 6.8. Subordination May Not Be Impaired. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of the Indenture or this Second
Supplemental Indenture, regardless of any knowledge thereof that any such holder
may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Notes,
without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article VI or the
obligations hereunder of the Holders of the Notes to the holders of such Senior
Indebtedness, do any one or more the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
senior
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Indebtedness; (iii) release any Person liable in any manner for the collection
of such Senior Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Company and any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
Section 7.1. Listing on Exchange. If the Notes are to be issued as a
global Security in connection with the distribution of the Notes to the holders
of the Preferred Securities upon a Dissolution Event, the Company will use its
best efforts to list such Notes on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed.
ARTICLE VIII
FORM OF NOTE
Section 8.1. Form of Note. The Notes and the Trustee's Certificate
of Authentication to be endorsed thereon are to be substantially in the
following forms:
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL SECURITY, INSERT: This Note is a
global Note within the meaning of the Indenture hereinafter referred to and is
registered in the name of a depositary or a nominee of a depositary. Unless and
until it is exchanged in whole or in part for Notes in definitive form, this
Note may not be transferred except as a whole by the depositary to a nominee of
the depositary or another nominee of the depositary or by the depositary or any
such nominee to a successor depositary or a nominee of such successor
depositary.
Unless this Note is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment hereon
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede Co.,
has an interest herein.]
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No. $
CUSIP No.
TCI COMMUNICATIONS, INC.
10% SUBORDINATED DEFERRABLE INTEREST NOTE
DUE MAY 31, 2045
TCI COMMUNICATIONS, INC., a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________________Dollars on May 31,
2045, and to pay interest on said principal sum from May , 1996, or from
the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, quarterly (subject
to deferral as set forth herein) in arrears on March 31, June 30, September 30
and December 31 of each year, commencing June 30, 1996, at the rate of 10% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest, compounded quarterly, at the same rate per
annum. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. In the event
that any date on which interest is payable on this Note is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the Regular Record Date for such interest installment [which shall be the
close of business on the Business Day next preceding such Interest Payment
Date.] [IF PURSUANT TO THE PROVISIONS OF SECTION 2.08 OF THE INDENTURE THE NOTES
ARE NO LONGER REPRESENTED BY A GLOBAL SECURITY -- which shall be [insert date
(to be selected by the Company) which is not less than 15 days prior to each
Interest Payment Date.]] Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders
on such Regular Record Date, and may be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Company for the payment of
such defaulted interest, notice whereof shall be given to the registered Holders
of the Notes not less than fifteen (15) days prior
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to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. The principal of (and
premium, if any) and the interest on this Note shall be payable at the office or
agency of the Trustee maintained for that purpose in New York, New York, in any
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the registered Holder at such address as shall appear in the security register
maintained by the Registrar. Notwithstanding the foregoing, so long as the
Holder of this Note is the Property Trustee, the payment of the principal of
(and premium, if any) and interest on this Note will be made at such place and
to such account as may by designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Note are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
TCI COMMUNICATIONS, INC.
By
[Title]
Attest:
By
Name:
Title:
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<PAGE>
(FORM OF CERTIFICATE OF AUTHENTICATION)
Date:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By
Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Securities of the
Company designated its "10% Subordinated Deferrable Interest Notes due May 31,
2045" (herein sometimes referred to as the "Notes"), issued under and pursuant
to an Indenture dated as of January 29, 1996, duly executed and
delivered between the Company and The Bank of New York, not in its individual
capacity but solely as trustee (the "Trustee"), as supplemented by a Second
Supplemental Indenture dated as of May 22, 1996, between the Company and the
Trustee (such Indenture as so supplemented, the "Indenture"), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the Notes.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as in effect
on the date of the Indenture (the "TIA"). This Note is subject to all such
terms and the Holder of this Note is referred to the Indenture and the TIA for a
statement of those terms.
The Notes are general unsecured obligations of the Company and are
limited (except as otherwise provided in the Indenture) to $
million in aggregate principal amount.
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Upon the occurrence and continuation of a Tax Event, in certain
circumstances this Note may be redeemed by the Company at a redemption price
equal to 100% of the principal amount hereof, plus any accrued but unpaid
interest thereon to the date of such redemption (the "Special Redemption
Price"). The Special Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines. The Company shall also have the right to redeem this Note at the
option of the Company, without premium or penalty, in whole or in part at any
time on or after May 31, 2001 (an "Optional Redemption"), at a redemption price
equal to 100% of the principal amount hereof, plus any accrued but unpaid
interest thereon to the date of such redemption (the "Optional Redemption
Price"). Any optional redemption pursuant to this paragraph will be made upon
not less than 30 nor more than 60 days notice, at the Optional Redemption Price.
If the Notes are only partially redeemed by the Company pursuant to an Optional
Redemption, the Notes will be redeemed pro rata or by lot or by any other method
utilized by the Trustee; provided that if at the time of redemption the Notes
are registered as a global Note, the depositary shall determine by lot the
interest of each of its participants in such global Note to be redeemed.
In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of a majority in aggregate principal
amount of the Securities of each series affected at the time outstanding, as
defined in the Indenture, to amend or supplement the Indenture or the Securities
of any series (including the Notes) for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the Holders of the Securities
(including the Notes); provided, however, that no such amendment or supplement
shall (i) extend the fixed maturity of any Securities of any series, or reduce
the principal amount thereof, or reduce the rate or extend the time for payment
of interest thereon, without the consent of the Holder of each Security of such
series so affected or (ii) reduce the aforesaid percentage in aggregate
principal amount of Securities, the Holders of which are required to consent to
any such amendment or supplement, without the consent of the Holders of each
Security then outstanding and affected thereby. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount of
the Securities of any series at the time outstanding affected thereby, on behalf
of all of the Holders of the Securities of such series, to waive any past
default in the performance of any of the covenants contained in the Indenture,
or established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or interest,
if any, on any of the Securities of such series. Any such consent or waiver by
the
18
<PAGE>
registered Holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and of any Note issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
The Company shall have the right at any time during the term of the
Notes, and from time to time, to extend the interest payment period of the Notes
for up to twenty (20) consecutive quarters (an "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Notes to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed twenty (20) consecutive quarters or
extend beyond the maturity of the Notes. At the termination of any such
Extended Interest Payment Period and upon the payment of all accrued and unpaid
interest and any additional amounts then due, the Company may select a new
Extended Interest Payment Period, subject to the foregoing requirements.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable by the registered Holder hereof on
the security register of the Company maintained by the Registrar, upon surrender
of this Note for registration of transfer at the office or agency of the Trustee
in New York, New York accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company or the Trustee duly executed by the
registered Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note,
the Company, the Trustee, any Paying Agent and the Registrar may deem and treat
the registered Holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Registrar) for the purpose of receiving
payment of principal of and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor the Registrar shall
be affected by any notice to the contrary.
19
<PAGE>
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 Company or the Trustee under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
[The Notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof.] [This global
Note is exchangeable for Notes in definitive form only under certain limited
circumstances set forth in the Indenture. Notes so issued are issuable only in
registered form without coupons in denominations of $25 and any integral
multiple thereof.] As provided in the Indenture and subject to certain
limitations therein set forth, Notes so issued are exchangeable for a like
aggregate principal amount of Notes of a different authorized denomination, as
requested by the Holder surrendering the same.
This Note shall be governed by the internal laws of the State of New
York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
ARTICLE IX
ORIGINAL ISSUE OF NOTES
Section 9.1. Original Issue of Notes. Notes in the aggregate
principal amount of $515,463,925 may, upon execution of this Second Supplemental
Indenture, be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company, signed by its Chairman, its
President, or any Vice President and its Treasurer, an Assistant Treasurer, or
Secretary without any further action by the Company.
ARTICLE X
CERTAIN COVENANTS
The following covenants shall apply to the Notes (but not with respect
to any other series of Securities), and are in addition to the covenants set
forth in Article Four of the Indenture.
Section 10.1. Limitation on Dividends and Other Payments. If (i)
there shall have occurred any event that constitutes an Event of Default or (ii)
the Company shall be in
20
<PAGE>
default with respect to its payment of any obligations under the Preferred
Securities Guarantee, then (a) the Company shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock, (b) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company which rank
pari passu with or junior to the Notes, and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee).
If the Company shall have given notice of its election to defer
payments of interest on the Notes by extending the interest payment period as
provided in Article IV and such period, or any extension thereof, shall be
continuing, then (i) the Company shall not declare or pay any dividend, or make
any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock, (ii) the Company shall not
make any payment of interest, principal, premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company which rank pari
passu with or junior to the Notes, and (iii) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee).
Notwithstanding the foregoing restrictions, nothing in this Section
10.1 shall prevent the Company, in any event, from making dividend, redemption,
liquidation or guarantee payments on capital stock, or interest, principal,
redemption or guarantee payments on debt securities issued by the Company
ranking pari passu with or junior to the Notes, where the payment is made by way
of (i) securities (including capital stock) that rank junior to the securities
on which such payment is being made or (ii) securities (including capital stock)
of Tele-Communications, Inc., a Delaware corporation (or any successor of such
corporation).
Section 10.2. Covenants as to the Trust. For so long as the Trust
Securities remain outstanding, the Company will (i) maintain 100% direct or
indirect ownership of the Common Securities; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of the Common Securities, (ii) not to cause, as sponsor of
the Trust, or to permit, as the holder of the Common Securities of the Trust,
the termination, dissolution or winding-up of the Trust, except in connection
with a distribution of the Notes as provided in the Declaration and in
connection with certain mergers, consolidations or amalgamations as permitted by
the Declaration, (iii) use its reasonable efforts to cause the Trust (a) to
remain a statutory business trust, except in connection with a distribution of
Notes to the holders of the Preferred Securities in liquidation of the Trust, or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (b) to otherwise continue to be treated as a grantor trust for
United States federal income tax purposes and (iv) use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an individual
beneficial interest in the Notes.
21
<PAGE>
ARTICLE XI
CERTAIN EVENTS OF DEFAULT
Section 11.1. Additional Events of Default. An Event of Default with
respect to the Notes shall include those events described in Section 6.01 of the
Indenture and, with respect to the Notes only, the occurrence of any of the
following events: the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution of
Notes to holders of Preferred Securities in liquidation or redemption of their
interests in the Trust, (ii) the redemption of all of the outstanding Preferred
Securities, or (iii) certain mergers, consolidations or amalgamations, each as
permitted by the provisions of the Declaration.
Section 11.2. Waiver of Existing Defaults. Notwithstanding Section
6.04 of the Indenture, the Holders of a majority in aggregate principal amount
of the Notes may not waive an existing Default or an existing Event of Default
(i) in the payment of the principal of or accrued interest on the Notes, unless
the Company has paid or deposited with the Trustee a sum sufficient to pay all
matured installments of interest (with interest on overdue interest at the rate
specified in Section 2.5(a)) upon all of the Notes and the principal of the
Notes that shall have become due otherwise than by acceleration or (ii) that
arise out of a breach by the Company of Section 10.1. Section 6.04 of the
Indenture shall, in all other respects and as modified by this Section 11.2,
apply to the Notes.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Supplemental Indenture Incorporated Into Indenture.
This Second Supplemental Indenture is executed by the Company and the Trustee
pursuant to the provisions of Sections 2.01 and 2.02 of the Indenture, and the
terms and conditions hereof shall be deemed to be part of the Indenture for all
purposes relating to the Notes. The provisions of the Indenture, as modified by
this Second Supplemental Indenture, are effective with respect to the Notes, and
are not effective with respect to any series of Securities to be issued pursuant
to any previous or subsequent supplemental indenture or resolution of the Board
of Directors. The Indenture, as supplemented by this Second Supplemental
Indenture, is in all respects adopted, ratified and confirmed.
Section 12.2. Trustee Not Responsible for Recitals; Disclaimer. The
recitals herein contained are made by the Company and not by the Trustee, and
the Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this Second
Supplemental Indenture.
22
<PAGE>
Section 12.3. Governing Law. This Second Supplemental Indenture and
each Note shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State.
Section 12.4. Separability. In case any one or more of the
provisions contained in this Second Supplemental Indenture or in the Notes shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Second Supplemental Indenture or of the Notes, but this
Second Supplemental Indenture and the Notes shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein or
therein.
Section 12.5. Counterparts. This Second Supplemental Indenture may
be executed in any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the same instrument.
Section 12.6. Acknowledgment of Rights of Holders of Preferred
Securities. The Company hereby acknowledges the right of each holder of
Preferred Securities, upon and during the continuance of an Event of Default
under the Declaration that results from the failure of the Company to pay
principal of or interest on the Notes when due, to directly institute
proceedings against the Company to obtain payment to such holder of an amount
equal to the principal or interest so defaulted on with respect to Notes in a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities owned by such holder.
Section 12.7. Pari Passu Debt. The payment by the Company of the
principal of, premium, if any, and interest on all Notes issued hereunder shall
rank pari passu with the payment by the Company of the principal of, premium, if
any, and interest on the Company's 8.72% Subordinated Deferrable Interest Notes
due January 31, 2045 (which are a series of Securities issued under the
Indenture).
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, as of the day and year first above written.
TCI COMMUNICATIONS, INC.
By /s/ Bernard W. Schotters II
------------------------------------------
Name: Bernard W. Schotters II
Title: Senior Vice President and Treasurer
Attest: /s/ Mary S. Willis
--------------------------
Title: Assistant Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ Walter N. Gitlin
------------------------------------
Name: Walter N. Gitlin
Title: Vice President
Attest: /s/ Robert E. Patterson III
---------------------------
Title: Assistant Vice President
24
<PAGE>
STATE OF COLORADO )
COUNTY OF ARAPAHOE ) ss:
On the 17th day of May, 1996 before me personally came Bernard W.
Schotters II, to me known, who, being by me duly sworn, did depose and say that
he is the Senior Vice President and Treasurer of TCI COMMUNICATIONS, INC., one
of the corporations described in and which executed the above instrument; that
he knows the corporate seal of said corporation; that the seal affixed to the
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.
/s/ Bridget A. Romero
NOTARY PUBLIC
[seal] Commission expires November 6, 1996
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss:
On the 21st day of May, 1996 before me personally came Walter N.
Gitlin, to me known, who, being by me duly sworn, did depose and say that he is
Vice President of THE BANK OF NEW YORK, one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ William J. Cassels
NOTARY PUBLIC
[seal] Commission expires May 16, 1996
25
<PAGE>
Exhibit 5
[ LETTERHEAD OF RICHARDS, LAYTON & FINGER ]
May 22, 1996
TCI Communications Financing II
c/o TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Re: TCI Communications Financing II
-------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TCI Communications, Inc.,
a Delaware corporation ("TCI"), and TCI Communications Financing II, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated November 21, 1995 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on November 21, 1995;
(b) The Declaration of the Trust, dated as of November 21, 1995, among
TCI and the trustees of the Trust named therein, as amended and restated by an
Amended and Restated Declaration of Trust of the Trust, dated as of May 22, 1996
(the "Trust Agreement"), among TCI, the trustees of the Trust named therein and
the holders, from time to time, of the undivided beneficial interests in the
assets of the Trust;
<PAGE>
TCI Communications Financing II
c/o TCI Communications, Inc.
May 22, 1996
Page 2
(c) The Prospectus, dated January 24, 1996, as supplemented by the
Prospectus Supplement dated May 17, 1996 (as so supplemented, the "Prospectus"),
relating to the 10% Trust Preferred Securities of the Trust representing
preferred undivided beneficial interests in the assets of the Trust (each, a
"Preferred Security") and collectively, the "Preferred Securities"); and
(d) A Certificate of Good Standing for the Trust, dated May 22, 1996,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (d) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (d) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed that (i) the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, each of the
parties to the documents examined by us has been duly organized or duly formed,
as the case may be, and is validly existing in good standing under the laws of
the jurisdiction governing its organization or formation, (iii) each natural
person who is party to the documents examined by us has the legal capacity to
execute, deliver and perform such documents, (iv) each of the parties to the
documents examined by us has the power and authority to execute and deliver, and
to perform its obligations under, such documents, (v) each of the parties to the
documents examined by us has duly authorized, executed and delivered such
documents, (vi) each Person to whom a Preferred Security is to be issued by the
Trust (each, a "Preferred Security Holder" and
<PAGE>
TCI Communications Financing II
c/o TCI Communications, Inc.
May 22, 1996
Page 3
collectively, the "Preferred Security Holders") has received an appropriate
Preferred Securities Certificate for such Preferred Security, and the Trust has
received payment for the Preferred Security acquired by each such Preferred
Security Holder, in accordance with the Trust Agreement and the Prospectus, and
(vii) the Preferred Securities are issued and sold to the Preferred Security
Holders in accordance with the Trust Agreement and the Prospectus, and the
Prospectus. We have not participated in the Preparation of the Prospectus and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
laws and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualification, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
Section 3801, et seq.
------
2. The Preferred Securities to be issued to the Preferred Security
Holders will represent valid and, subject to the qualifications set forth in
paragraph 3 below, fully paid and nonassessable undivided beneficial interests
in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders nay be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Form 8-K of TCI being filed on the date
hereof. We hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come
<PAGE>
TCI Communications Financing II
c/o TCI Communications, Inc.
May 22, 1996
Page 4
within the category of Persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE>
Exhibit 8
---------
May 17, 1996
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
TCI Communications Financing I
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Dear Ladies and Gentlemen:
We have acted as special tax counsel to TCI Communications, Inc., a
Delaware corporation ("TCI Communications"), and TCI Communications Financing
II, a Delaware business trust ("TCI Communications Financing"), in connection
with the preparation of the registration statement on Form S-3 (File No. 33-
64525), filed with the Securities and Exchange Commission (the "Commission") on
November 22, 1995 and amended by Amendment Nos. 1 and 2 (as so amended, the
"Registration Statement"), relating to, among other things, the registration
under the Securities Act of 1933, as amended (the "Act"), of TCI Communications
Financing's Preferred Securities (the "Preferred Securities") which became
effective on January 24, 1996. The Preferred Securities will be issued in
accordance with the provisions of the Amended and Restated Declaration of Trust
(the "Declaration") to be executed by TCI Communications, as sponsor, and the
trustees of TCI Communications Financing. Capitalized terms not otherwise
defined herein shall have the same meaning ascribed thereto in the prospectus
supplement dated, May 17, 1996 (the "Prospectus Supplement"), filed with the
Commission pursuant to Rule 424(b) of the Act.
<PAGE>
TCI Communications, Inc.
May 17, 1996
Page 2
We have acted as your special tax counsel in connection with certain
tax matters related to the Preferred Securities including the information in the
Prospectus Supplement under the caption "Certain Federal Income Tax
Consequences".
In so acting, we have reviewed the Prospectus Supplement and the
related base prospectus (the "Base Prospectus"), the Declaration, the form of
Preferred Securities and the form of Common Securities contained in the
Declaration, and the form of Indenture and the form of the Preferred Securities
Guarantee filed with the Commission as exhibits to the Registration Statement
(collectively, the "Agreements"). In addition, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments, and have made such
inquiries of such officers, trustees and representatives of TCI Communications
and TCI Communications Financing, as we have deemed relevant and necessary as a
basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such documents. We
have further assumed (i) that the Preferred Securities as executed and delivered
by the requisite signatories thereto will conform in substance and form in all
material respects to the respective forms thereof examined by us, (ii) timely
compliance by all parties to the various Agreements to the terms thereof
(without waiver or amendment of any of the terms thereof) and (iii) that the
Agreements constitute all the agreements, arrangements and transactions
contemplated therein, that the representations and warranties contained therein
are true and that there are no other agreements, arrangements or transactions
relating to the Preferred Securities or the Common Securities.
Based on the foregoing, it is our opinion that:
1. Assuming full compliance with the Agreements, TCI Communications
Financing will be classified as a "grantor trust" for United States
federal income tax purposes, and will not be classified, for United
States federal income tax purposes, as an association taxable as a
corporation or a partnership. Each holder of Preferred Securities
will be treated as owning an undivided beneficial interest in the
Subordinated Debt Securities.
<PAGE>
TCI Communications, Inc.
May 17, 1996
Page 3
2. The summary in the Prospectus Supplement under the caption
"Certain Federal Income Tax Consequences" is a full and fair
disclosure of the material United States Federal income tax
consequences of the ownership of Preferred Securities as of the date
hereof.
The foregoing opinions are based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder (including proposed Treasury Regulations), published pronouncements
of the Internal Revenue Service and case law, any of which may be changed at any
time with retroactive effect. We express no opinion as to any matters not
specifically covered by the foregoing opinion.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the headings
"Legal Opinions" in the Base Prospectus and "Certain Federal Income Tax
Consequences" and "Legal Matters" in the Prospectus Supplement. In giving the
foregoing consent, we do not admit that we are in the category of persons whose
consent is required under Section 7 of the Act. This opinion may not be used
for any other purpose and may not otherwise be relied upon by, or disclosed to,
any other person.
Very truly yours,
/s/ Baker & Botts, L.L.P.
