<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 23, 1996
(REGISTRATION NO. 33-64525)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
<TABLE>
<S> <C> <C>
TCI COMMUNICATIONS, INC. DELAWARE 84-0588868
TCI COMMUNICATIONS FINANCING I DELAWARE 84-6289175
TCI COMMUNICATIONS FINANCING II DELAWARE 84-6289176
TCI COMMUNICATIONS FINANCING III DELAWARE 84-6289177
TCI COMMUNICATIONS FINANCING IV DELAWARE 84-6289178
(EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
---------------
TERRACE TOWER II STEPHEN M. BRETT, ESQ.
5619 DTC PARKWAY TCI COMMUNICATIONS, INC.
ENGLEWOOD, COLORADO 80111-3000 TERRACE TOWER II
(303) 267-5500 5619 DTC PARKWAY
(ADDRESS, INCLUDING ZIP CODE, AND ENGLEWOOD, COLORADO 80111-3000
TELEPHONE NUMBER, INCLUDING (303) 267-5500
AREA CODE, OF EACH REGISTRANT'S (NAME, ADDRESS, INCLUDING ZIP CODE,
PRINCIPAL EXECUTIVE OFFICES) AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE FOR
EACH REGISTRANT)
---------------
COPIES TO:
ROBERT W. MURRAY JR., ESQ.
BAKER & BOTTS, L.L.P.
885 THIRD AVENUE
NEW YORK, NEW YORK 10022-4834
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
---------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
1 Form of Purchase Agreement.
4.1 Certificate of Trust of TCI Communications Financing I.*
4.2 Certificate of Trust of TCI Communications Financing II.*
4.3 Certificate of Trust of TCI Communications Financing III.*
4.4 Certificate of Trust of TCI Communications Financing IV.*
4.5 Declaration of Trust of TCI Communications Financing I.*
4.6 Declaration of Trust of TCI Communications Financing II.*
4.7 Declaration of Trust of TCI Communications Financing III.*
4.8 Declaration of Trust of TCI Communications Financing IV.*
4.9 Form of Amended Declaration of Trust of TCI Communications Financing
I.
4.10 Form of Amended Declaration of Trust of TCI Communications Financing
II.
4.11 Form of Amended Declaration of Trust of TCI Communications Financing
III.
4.12 Form of Amended Declaration of Trust of TCI Communications Financing
IV.
4.13 Form of Indenture between the Registrant and the Bank of New York, as
Trustee.*
4.14 Form of First Supplemental Indenture to Indenture to be used in
connection with the issuance of the Subordinated Debt Securities.
4.15 Form of Guarantee Agreement with respect to Preferred Securities of
TCI Communications Financing I.
4.16 Form of Guarantee Agreement with respect to Preferred Securities of
TCI Communications Financing II.
4.17 Form of Guarantee Agreement with respect to Preferred Securities of
TCI Communications Financing III.
4.18 Form of Guarantee Agreement with respect to Preferred Securities of
TCI Communications Financing IV.
4.19 Form of Guarantee Agreement with respect to Common Securities of TCI
Communications Financing I.
4.20 Form of Guarantee Agreement with respect to Common Securities of TCI
Communications Financing II.
4.21 Form of Guarantee Agreement with respect to Common Securities of TCI
Communications Financing III.
4.22 Form of Guarantee Agreement with respect to Common Securities of TCI
Communications Financing IV.
5.1 Opinion of Baker & Botts, L.L.P. regarding the legality of the
securities being registered.
5.2 Opinion of Richards, Layton & Finger regarding the validity under
Delaware law of the securities being registered.
8 Opinion of Baker & Botts, L.L.P. regarding certain tax matters.
12 Calculation of Ratios of Earnings to Combined Fixed Charges and
Preferred Stock Dividends of the Company.*
23.1 Consent of KPMG Peat Marwick LLP.*
23.2 Consent of Price Waterhouse, LLP.*
23.3 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1 and Exhibit
8).
23.4 Consent of Richards, Layton & Finger (included in Exhibit 5.2)
24 Powers of Attorney.*
25.1 Statement of Eligibility of The Bank of New York, as Trustee for the
Indenture, on Form T-1.*
25.2 Statement of Eligibility of The Bank of New York, as Trustee for
Preferred Securities of TCI Communications Financing I, on Form T-1.*
25.3 Statement of Eligibility of The Bank of New York, as Trustee for
Preferred Securities of TCI Communications Financing II, on Form T-
1.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S>
25.4 Statement of Eligibility of The Bank of New York, as Trustee for
Preferred Securities of TCI Communications Financing III, on Form T-
1.*
25.5 Statement of Eligibility of The Bank of New York, as Trustee for
Preferred Securities of TCI Communications Financing IV, on Form T-
1.*
25.6 Statement of Eligibility of The Bank of New York, as Trustee for
Guarantee of Preferred Securities of TCI Communications Financing I,
on Form T-1.*
25.7 Statement of Eligibility of The Bank of New York, as Trustee for
Guarantee of Preferred Securities of TCI Communications Financing II,
on Form T-1.*
25.8 Statement of Eligibility of The Bank of New York, as Trustee for
Guarantee of Preferred Securities of TCI Communications Financing
III, on Form T-1.*
25.9 Statement of Eligibility of The Bank of New York, as Trustee for
Guarantee of Preferred Securities of TCI Communications Financing IV,
on Form T-1.*
</TABLE>
- --------
*Previously filed.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE,
STATE OF COLORADO, ON JANUARY 23, 1996.
TCI Communications, Inc.
/s/ Stephen M. Brett
By: _________________________________
Name: Stephen M. Brett
Title: Senior Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE,
STATE OF COLORADO, ON JANUARY 23, 1996.
TCI Communications Financing I
/s/ Stephen M. Brett
By: _________________________________
Name: Stephen M. Brett
Title: Trustee
/s/ Bernard W. Schotters
By: _________________________________
Name: Bernard W. Schotters
Title: Trustee
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE,
STATE OF COLORADO, ON JANUARY 23, 1996.
TCI Communications Financing II
/s/ Stephen M. Brett
By: _________________________________
Name: Stephen M. Brett
Title: Trustee
/s/ Bernard W. Schotters
By: _________________________________
Name: Bernard W. Schotters
Title: Trustee
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE,
STATE OF COLORADO, ON JANUARY 23, 1996.
TCI Communications Financing III
/s/ Stephen M. Brett
By: _________________________________
Name: Stephen M. Brett
Title: Trustee
/s/ Bernard W. Schotters
By: _________________________________
Name: Bernard W. Schotters
Title: Trustee
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE,
STATE OF COLORADO, ON JANUARY 23, 1996.
TCI Communications Financing IV
/s/ Stephen M. Brett
By: _________________________________
Name: Stephen M. Brett
Title: Trustee
/s/ Bernard W. Schotters
By: _________________________________
Name: Bernard W. Schotters
Title: Trustee
II-4
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE
--------- ----- ----
* Chairman of the Board and
______________________________________ a Director of TCI
(BOB MAGNESS) Communications, Inc.
* Director of TCI
______________________________________ Communications, Inc.
(JOHN C. MALONE)
Director of TCI
______________________________________ Communications, Inc.
(DONNE F. FISHER)
* President of TCI
______________________________________ Communications, Inc.
(BRENDAN R. CLOUSTON) (Principal Executive
Officer)
* Senior Vice President and
______________________________________ Controller of TCI
(GARY K. BRACKEN) Communications, Inc.
(Principal Financial and
Accounting Officer)
*By: /s/ Stephen M. Brett
- --------------------------------- January 23, 1996
Name: Stephen M. Brett
Attorney-in-Fact
II-5
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Stephen M. Brett Trustee of TCI January 23,
______________________________________ Communications 1996
(STEPHEN M. BRETT) Financing I
/s/ Bernard W. Schotters Trustee of TCI January 23,
______________________________________ Communications 1996
(BERNARD W. SCHOTTERS) Financing I
</TABLE>
II-6
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Stephen M. Brett Trustee of TCI January 23,
______________________________________ Communications 1996
(STEPHEN M. BRETT) Financing II
/s/ Bernard W. Schotters Trustee of TCI January 23,
______________________________________ Communications 1996
(BERNARD W. SCHOTTERS) Financing II
</TABLE>
II-7
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Stephen M. Brett Trustee of TCI January 23,
______________________________________ Communications 1996
(STEPHEN M. BRETT) Financing III
/s/ Bernard W. Schotters Trustee of TCI January 23,
______________________________________ Communications 1996
(BERNARD W. SCHOTTERS) Financing III
</TABLE>
II-8
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ Stephen M. Brett Trustee of TCI January 23,
______________________________________ Communications 1996
(STEPHEN M. BRETT) Financing IV
/s/ Bernard W. Schotters Trustee of TCI January 23,
______________________________________ Communications 1996
(BERNARD W. SCHOTTERS) Financing IV
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
------- ----------- --------
<C> <S> <C>
1 Form of Underwriting Agreement.
4.1 Certificate of Trust of TCI Communications Financing I.*
4.2 Certificate of Trust of TCI Communications Financing II.*
4.3 Certificate of Trust of TCI Communications Financing III.*
4.4 Certificate of Trust of TCI Communications Financing IV.*
4.5 Declaration of Trust of TCI Communications Financing I.*
4.6 Declaration of Trust of TCI Communications Financing II.*
4.7 Declaration of Trust of TCI Communications Financing III.*
4.8 Declaration of Trust of TCI Communications Financing IV.*
4.9 Form of Amended Declaration of Trust of TCI Communications
Financing I.
4.10 Form of Amended Declaration of Trust of TCI Communications
Financing II.
4.11 Form of Amended Declaration of Trust of TCI Communications
Financing III.
4.12 Form of Amended Declaration of Trust of TCI Communications
Financing IV.
4.13 Form of Indenture between the Registrant and the Bank of
New York, as Trustee.*
4.14 Form of First Supplemental Indenture to Indenture to be
used in connection with the issuance of the Subordinated
Debt Securities.
4.15 Form of Guarantee Agreement with respect to Preferred
Securities of TCI Communications Financing I.
4.16 Form of Guarantee Agreement with respect to Preferred
Securities of TCI Communications Financing II.
4.17 Form of Guarantee Agreement with respect to Preferred
Securities of TCI Communications Financing III.
4.18 Form of Guarantee Agreement with respect to Preferred
Securities of TCI Communications Financing IV.
4.19 Form of Guarantee Agreement with respect to Common
Securities of TCI Communications Financing I.
4.20 Form of Guarantee Agreement with respect to Common
Securities of TCI Communications Financing II.
4.21 Form of Guarantee Agreement with respect to Common
Securities of TCI Communications Financing III.
4.22 Form of Guarantee Agreement with respect to Common
Securities of TCI Communications Financing IV.
5.1 Opinion of Baker & Botts, L.L.P. regarding the legality of
the securities being registered.
5.2 Opinion of Richards, Layton & Finger regarding the validity
under Delaware law of the securities being registered.
8 Opinion of Baker & Botts, L.L.P. regarding certain tax
matters.
12 Calculation of Ratios of Earnings to Combined Fixed Charges
and Preferred Stock Dividends of the Company.*
23.1 Consent of KPMG Peat Marwick LLP.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
------- ----------- --------
<C> <S> <C>
23.2 Consent of Price Waterhouse, LLP.*
23.3 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1
and Exhibit 8).
23.4 Consent of Richards, Layton & Finger (included in Exhibit
5.2).
24 Powers of Attorney.*
25.1 Statement of Eligibility of The Bank of New York, as
Trustee for the Indenture, on Form T-1.*
25.2 Statement of Eligibility of The Bank of New York, as
Trustee for Preferred Securities of TCI Communications
Financing I, on Form T-1.*
25.3 Statement of Eligibility of The Bank of New York, as
Trustee for Preferred Securities of TCI Communications
Financing II, on Form T-1.*
25.4 Statement of Eligibility of The Bank of New York, as
Trustee for Preferred Securities of TCI Communications
Financing III, on Form T-1.*
25.5 Statement of Eligibility of The Bank of New York, as
Trustee for Preferred Securities of TCI Communications
Financing IV, on Form T-1.*
25.6 Statement of Eligibility of The Bank of New York, as
Trustee for Guarantee of Preferred Securities of TCI
Communications Financing I, on Form T-1.*
25.7 Statement of Eligibility of The Bank of New York, as
Trustee for Guarantee of Preferred Securities of TCI
Communications Financing II, on Form T-1.*
25.8 Statement of Eligibility of The Bank of New York, as
Trustee for Guarantee of Preferred Securities of TCI
Communications Financing III, on Form T-1.*
25.9 Statement of Eligibility of The Bank of New York, as
Trustee for Guarantee of Preferred Securities of TCI
Communications Financing IV, on Form T-1.*
</TABLE>
- --------
* Previously filed.
<PAGE>
EXHIBIT 1
_____________ Preferred Securities
TCI COMMUNICATIONS FINANCING __
(a Delaware Business Trust)
____% Trust Originated Preferred Securities /(SM)/ ("TOPrS/(SM)/")
(Liquidation Amount $25 per Preferred Security)
guaranteed to a limited extent by TCI Communications, Inc.
PURCHASE AGREEMENT
------------------
January , 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
[Representatives]
as Representatives of the several Underwriters
named in Schedule A hereto
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
250 Vesey Street
New York, New York 10281-1209
Dear Sirs:
Each of TCI Communications Financing __ (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 Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") 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 Merrill Lynch, ____________ and ____________ 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 ___% Trust Originated Preferred Securities (liquidation
amount $25 per preferred security) of the Trust (the "Preferred
/SM/ "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
Securities") set forth in Schedule A (the "Securities"). 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 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 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 ___% Subordinated Deferrable Interest Notes due 20__ (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 ___________ (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.
Prior to the purchase and public offering of the Offered Securities by the
several Underwriters, the Trust, the Company and the Representatives, acting on
behalf of the several Underwriters, shall enter into an agreement substantially
in the form of Exhibit A hereto (the "Pricing Agreement"). The Pricing
Agreement may take the form of an exchange of any standard form of written
telecommunication between the Trust and the Company and the Representatives and
shall specify such applicable information as is indicated in Exhibit A hereto.
The offering of the Offered Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the execution
and delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
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 the Registration Statement becomes effective and the Pricing
Agreement has been executed and delivered.
SECTION 1. Registration Statement and Prospectus. The Trust and the
-------------------------------------
Company have filed with the Securities and Exchange Commission (the
"Commission") a shelf registration statement on Form S-3 (No. 33-64525) and a
related preliminary prospectus and
2
<PAGE>
preliminary prospectus supplement relating to the Offered Securities and the
Subordinated Debt Securities under the Securities Act of 1933, as amended (the
"1933 Act"), have filed such amendments thereto, if any, and such amended
preliminary 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. The
information, if any, included in such prospectus and prospectus supplement that
was omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information". Each prospectus and prospectus supplement used before such
registration statement became effective, and any prospectus and prospectus
supplement that omitted the Rule 430A Information that was used after such
effectiveness and 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 and including the Rule 430A Information is
herein called the "Registration Statement." The final prospectus, 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 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 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 2. Agreements to Sell and Purchase.
-------------------------------
3
<PAGE>
(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 per
Preferred Security set forth in the Pricing Agreement, the number of Securities
set forth in Schedule A opposite the name of such Underwriter (except as
otherwise provided in the Pricing Agreement), plus any additional number of
Initial 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 and the Date of
Delivery, if any, for the account of the several Underwriters, an amount per
Preferred Security as set forth in the Pricing Agreement.
SECTION 3. Delivery and Payment.
--------------------
Payment of the purchase price for, and delivery of certificates for, the
Securities to be purchased by the Underwriter shall be made at the offices of
Baker & Botts, L.L.P., 885 Third Avenue, Suite 1900, New York, New York 10022-
4834, 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 of the Pricing Agreement, 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 New York Clearing House funds or similar
next day funds payable to the order of the Trust against delivery to the
Representatives for the account of the several Underwriters of the Preferred
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 Securities which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the 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 and the Date of Delivery, if any, 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
Merrill Lynch, Pierce,
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Fenner & Smith Incorporated in New York Clearing House funds or other similar
next day funds.
SECTION 4. Covenants of the Trust and the Company. Each of the Trust and
--------------------------------------
the Company, jointly and severally, covenants with each Underwriter as follows:
(a) The Trust and the Company, subject to Section 4(c), will comply
with the requirements of Rule 430A, if applicable, and 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 amended Prospectus pursuant to Rule 430A, if
applicable, or 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 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 signed
copy of the Registration Statement and any post-effective amendment
thereto, including all financial statements and schedules, exhibits and
documents incorporated therein by reference (including exhibits
incorporated therein by reference to the extent not previously furnished to
the Underwriters) and to deliver to the Underwriters the number of
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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
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 in any event 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 Securities
Exchange Act of 1934, as amended (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 (and any securities issuable upon
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conversion or exercise 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 Underwriter may request; provided, that in no event
shall either the Trust or the Company be obligated to qualify to do
business as a foreign limited partnership 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
(and any securities issuable upon conversion or exercise of any Offered
Securities) under such securities or Blue Sky laws and in connection with
the determination of the eligibility of Offered Securities for investment
under the laws of such jurisdictions as 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 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) If, at the time that the Registration Statement became effective,
any information was omitted therefrom in reliance upon Rule 430A of the
1933 Act Regulations, then, immediately following the execution of the
Pricing Agreement, to prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A and Rule 424(b) of the 1933
Act Regulations, copies of each amended Prospectus, or, if required by such
Rule 430A, a post-effective amendment to the Registration Statement
(including any amended Prospectus), containing all information so omitted.
(h) 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
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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.
(i) 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 the
applicable Pricing Agreement, or if for any reason either of the Trust or
the Company shall be unable to perform its obligations herein or therein,
the Company will reimburse the several Underwriters, for all out-of-pocket
expenses (including the fees and expenses of counsel 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.
(j) During a period of 30 days from the date of the Pricing Agreement,
neither the Trust nor the Company will, without prior written consent of
the Representatives, 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.
(k) 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 securities quoted on such
exchange.
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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 and as of the date of the Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date") 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 Securities Exchange Act of 1934, as amended (the "1934 Act"), and
the rules and regulations of the Commission promulgated thereunder, and any
further documents so filed and incorporated by reference will, when they
are filed with the Commission, 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 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
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<PAGE>
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 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 and Qualification 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 and the Prospectus delivered to
the Underwriters for use in connection with this offering was 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, and as of the date thereof, the Pricing
Agreement will have 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.
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(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 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, at
the Closing Date, the Declaration will have 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 Pricing 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, and as of the date thereof the Pricing
Agreement will have 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 Preferred Securities conform to the
description thereof in the Prospectus.
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(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 Subordinated Debt Securities and no security interest, mortgage,
pledge, lien, encumbrance, claim or equity will be noted thereon or on the
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); at the Closing Date, the
Guarantee will have been duly qualified under the Trust Indenture Act; and
the Guarantee conforms to the description thereof contained in the
Prospectus.
(12) The Indenture has been duly and validly authorized by the
Company and, when executed and delivered by the Company at the Closing Date
and, assuming due authorization, execution and delivery by the Debt
Trustee, at such Closing Date will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms, subject
as to enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles (regardless of whether the issue of
enforceability is considered in a proceeding at law or in equity); and at
the Closing Date, the Indenture will have been duly qualified under the
Trust Indenture Act.
(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.
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(14) The issuance and sale of the Preferred Securities by the Trust
and the performance by the Trust of its obligations under this Agreement
and the Pricing 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 Pricing 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(v) of
Regulations 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.
(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
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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 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 Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any such untrue
statement or omission or allegation thereof based upon information furnished in
writing to the 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
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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 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 Exchange 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 (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
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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 and the Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
6, 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 omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
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 Underwriter.
------------------------------------------------
The obligations of the several Underwriters hereunder are subject to the
following conditions:
17
<PAGE>
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof; 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 (f) of this Section 7. If the Trust and the Company
have elected to rely upon Rule 430A of the 1933 Act Regulations, the price
of the Offered Securities and any price-related information previously
omitted from the effective Registration Statement pursuant to such Rule
430A shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations within the prescribed time period,
and prior to the Closing Date the Company shall have provided evidence
satisfactory to the Underwriter of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and
declared effective in accordance with the requirements of Rule 430A of the
1933 Act Regulations.
(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:
(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 Pricing
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
18
<PAGE>
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,
the Pricing Agreement and the Declaration, the issuance of the Offered
Securities and the fulfillment of the terms herein and therein
contained do not conflict with, or result in a breach of, or
constitute a default under, the 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 Pricing 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
19
<PAGE>
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 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;
(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 Messrs. Sherman & Howard, special counsel to the Trust and
the Company, to the following effect and covering such additional matters
as the Underwriter may reasonably request:
(i) The execution and delivery of this Agreement, the Pricing
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 Pricing
Agreement, the
20
<PAGE>
Guarantee and the Indenture do not or will not, as appropriate, 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 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.
(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 Underwriter may reasonably request:
(i) This Agreement, the Pricing 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;
21
<PAGE>
(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 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 Offered 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 (the "Rules"). In passing upon the form of such documents,
we have necessarily assumed the correctness and completeness of the
statements made or included therein by the 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 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
22
<PAGE>
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 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
Underwriter 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 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 the Pricing
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
23
<PAGE>
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).
(iii) Under the Delaware Act and the Declaration, the execution
and delivery by the Trust of this Agreement and the Pricing 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 and the Pricing Agreement have
been duly executed and delivered by the Trust under the laws of
Delaware.
(iv) The Common Securities have been duly authorized by the
Declaration and are 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 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 and the Pricing 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
24
<PAGE>
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 and the Guarantees except such as
have been obtained and such as may be required by state securities
laws.
(c) The Underwriter 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
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) The opinion of Emmett, Marvin & Martin, counsel to The Bank of New
York as Property Trustee under the Declaration, in form and substance
satisfactory to counsel to the Underwriters to the effect that:
(i) The Bank of New York is a national banking association with
trust powers, duly organized, validly existing and in good standing
under the laws of the United States, with all necessary power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration.
(ii) The execution, delivery and performance by the Property
Trustee of the Declaration have been duly authorized by all necessary
corporate action on the part of the Property Trustee; the Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes the valid and binding obligation of the Property Trustee,
enforceable against the Property Trustee in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
25
<PAGE>
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).
(iv) The execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with or constitute a breach
of the Articles of Organization or Bylaws of the Property Trustee.
(v) No consent, approval or authorization of, or registration
with or notice to, any New York or federal banking authority is
required for the execution, delivery or performance by the Property
Trustee of the Declaration.
(vi) To the best of such counsel's knowledge, based on a review
of the certificates representing the Subordinated Debt Securities, no
security interest, mortgage, pledge, lien, encumbrance, claim or
equity is noted thereon.
In giving such opinion, such counsel may rely as to matters governed
by the laws of the State of Delaware on an opinion of Messrs. Richards
Layton & Finger, provided that such opinion shall be addressed to the
Underwriters, shall be dated as of such date and shall expressly permit
such counsel to rely thereon.
(e) On the Closing Date, the Representatives shall have received from
each of KPMG Peat Marwick LLP and Price Waterhouse LLP a letter, dated as
of the Closing Date, in form and substance reasonably satisfactory to the
Representatives.
(f) 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.
(g) Subsequent to the date hereto, there shall not have occurred any
change, or any development involving a prospective change, in or affecting
particularly the business,
26
<PAGE>
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.
(h) At the Closing Date the Offered Securities shall have been
approved for quotation 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 securities quoted on such exchange.
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
27
<PAGE>
(b) if the principal amount of Defaulted Securities exceeds 10% of
the aggregate principal amount of Offered Securities, the Company shall be
entitled for an additional 24-hour period to find one or more substitute
underwriters satisfactory to the Representatives in their reasonable
discretion to purchase such Defaulted Securities.
In the event of any such default either the Representatives or the 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 Merrill Lynch & Co., North Tower, World
Financial Center, 250 Vesey Street, New York, New York 10281-1209, attention
__________; 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 and the Pricing Agreement shall each
-------
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 or the Pricing 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 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 the Pricing Agreement or any provision herein
or therein contained. This Agreement and the
28
<PAGE>
Pricing Agreement and all conditions and provisions hereof and thereof 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 and the Pricing
----------------------
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.
29
<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 I
By:
------------------------------------
as Regular Trustee
By:
------------------------------------
as Regular Trustee
TCI COMMUNICATIONS, INC.
By:
------------------------------------
TCI
CONFIRMED AND ACCEPTED,
as of the date first
above written:
[Insert rep names]
BY: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------------
Authorized Signatory
for themselves and as Representatives
of other underwriters named in Schedule A
hereto.
30
<PAGE>
EXHIBIT A
_____________ Preferred Securities
TCI COMMUNICATIONS FINANCING __
(a Delaware Business Trust)
____% Trust Originated Preferred Securities /(SM)/ ("TOPrS/(SM)/")
(Liquidation Amount $25 per Preferred Security)
guaranteed to a limited extent by TCI Communications, Inc.
PRICING AGREEMENT
-----------------
_______________
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
[Representatives]
as Representatives of the several Underwriters
named in Schedule A hereto
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
250 Vesey Street
New York, New York 10281-1209
Dear Sirs:
Reference is made to the Purchase Agreement, dated __________, ____ (the
"Purchase Agreement"), relating to the purchase, by the Underwriters named in
Schedule A thereto (the "Underwriters"), of the above-referenced ___% Trust
Originated Preferred Securities (the "Preferred Securities"), of the TCI
Communications Financing __, a business trust formed under the laws of Delaware
(the "Trust"). Capitalized terms in this Pricing Agreement that are not defined
herein have the meanings assigned in the Purchase Agreement.
Pursuant to Section 2 of the Purchase Agreement, each of the Trust and the
Company agree with each of the several Underwriters as follows:
1. The initial public offering price for the Offered Securities, and
the purchase price per Offered Security for
A-1
<PAGE>
the Offered Securities to be paid by the several Underwriters, determined
as provided in said Section 2, shall be $25.00.
2. The compensation per Preferred Security to be paid by the Company
to the several Underwriters in respect of their commitments hereunder shall
be $_____.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in Subordinated Debt Securities, the Company has
agreed to pay to the Underwriters, as compensation for their arranging the
investment therein of such proceeds, $_____ per Preferred Security (or $_______
in the aggregate); provided, that such compensation for sales of 10,000 or more
Preferred Securities to a single purchaser will be $_____ per Preferred
Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' compensation will be less than the aggregate amount specified in
the preceding sentence. See "Underwriting."
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 Underwriter, the Trust and the Company in accordance with
its terms.
Very truly yours,
TCI COMMUNICATIONS FINANCING __
By: _____________________________
as Regular Trustee
By: _____________________________
as Regular Trustee
TCI COMMUNICATIONS, INC.
By: _________________________
CONFIRMED AND ACCEPTED,
as of the date first above written:
[Insert rep names]
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________
A-2
<PAGE>
Exhibit 4.9
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
TCI COMMUNICATIONS FINANCING I
Dated as of _______ __, 1996
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions............................................ 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application....................... 8
SECTION 2.2 Lists of Holders of Securities......................... 8
SECTION 2.3 Reports by the Property Trustee........................ 9
SECTION 2.4 Periodic Reports to Property Trustee................... 9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.............................................. 9
SECTION 2.6 Events of Default; Waiver.............................. 10
SECTION 2.7 Event of Default; Notice............................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name................................................... 12
SECTION 3.2 Office................................................. 12
SECTION 3.3 Purpose................................................ 12
SECTION 3.4 Authority.............................................. 13
SECTION 3.5 Title to Property of the Trust......................... 13
SECTION 3.6 Powers and Duties of the Regular Trustees.............. 13
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees........................................... 16
SECTION 3.8 Powers and Duties of the Property Trustee.............. 17
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee................................... 19
SECTION 3.10 Certain Rights of the Property Trustee................. 21
SECTION 3.11 Delaware Trustee....................................... 23
SECTION 3.12 Execution of Documents................................. 23
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities.......................................... 24
SECTION 3.14 Duration of Trust...................................... 24
SECTION 3.15 Mergers................................................ 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities................ 26
SECTION 4.2 Responsibilities of the Sponsor........................ 26
SECTION 4.3 Expenses............................................... 27
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..................................... 27
i
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Page
----
SECTION 5.2 Delaware Trustee....................................... 28
SECTION 5.3 Property Trustee; Eligibility.......................... 28
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally............................. 29
SECTION 5.5 Initial Trustees....................................... 29
SECTION 5.6 Appointment, Removal and Resignation of
Trustees............................................... 30
SECTION 5.7 Vacancies among Trustees............................... 31
SECTION 5.8 Effect of Vacancies.................................... 31
SECTION 5.9 Meetings............................................... 32
SECTION 5.10 Delegation of Power.................................... 32
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.......................................... 33
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities................ 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust................................... 34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................. 35
SECTION 9.2 Transfer of Certificates............................... 35
SECTION 9.3 Deemed Security Holders................................ 36
SECTION 9.4 Book Entry Interests................................... 36
SECTION 9.5 Notices to Clearing Agency............................. 37
SECTION 9.6 Appointment of Successor Clearing Agency............... 37
SECTION 9.7 Definitive Preferred Security Certifi-
cates.................................................. 37
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Cer-
tificates.............................................. 38
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.............................................. 39
SECTION 10.2 Exculpation............................................ 39
SECTION 10.3 Fiduciary Duty......................................... 40
SECTION 10.4 Indemnification........................................ 41
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Page
----
SECTION 10.5 Outside Businesses..................................... 41
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year............................................ 42
SECTION 11.2 Certain Accounting Matters............................. 42
SECTION 11.3 Banking................................................ 43
SECTION 11.4 Withholding............................................ 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................. 44
SECTION 12.2 Meetings of the Holders; Action by Writ-
ten Consent............................................ 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Prop-
erty Trustee........................................... 47
SECTION 13.2 Representations and Warranties of Dela-
ware Trustee........................................... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices................................................ 49
SECTION 14.2 Governing Law.......................................... 50
SECTION 14.3 Intention of the Parties............................... 50
SECTION 14.4 Headings............................................... 50
SECTION 14.5 Successors and Assigns................................. 50
SECTION 14.6 Partial Enforceability................................. 51
SECTION 14.7 Counterparts........................................... 51
ANNEX I TERMS OF SECURITIES.................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE.......................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.................... A2-1
EXHIBIT B SPECIMEN OF SUBORDINATED NOTE.......................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................. C-1
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a) .............................................. 5.3(a)
310(b) .............................................. 5.3(c), 5.3(d)
310(c) .............................................. Inapplicable
311(a) .............................................. 2.2(b)
311(b) .............................................. 2.2(b)
311(c) .............................................. Inapplicable
312(a) .............................................. 2.2(a)
312(b) .............................................. 2.2(b)
313 .............................................. 2.3
314(a) .............................................. 2.4
314(b) .............................................. Inapplicable
314(c) .............................................. 2.5
314(d) .............................................. Inapplicable
314(e) .............................................. 1.1, 2.5
314(f) .............................................. Inapplicable
315(a) .............................................. 3.9(b)
315(c) .............................................. 3.9(a)
315(d) .............................................. 3.9(a)
316(a) .............................................. Annex I
316(c) .............................................. 3.6(e)
317(a) .............................................. 3.8(d)
317(b) .............................................. 3.8(h)
_______________
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TCI COMMUNICATIONS FINANCING I
_________ __, ____
DECLARATION OF TRUST ("Declaration"), dated and effective as of
_________ __, ____, by the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial interests
in the Trust to be issued pursuant to this Declaration.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Trustees and the Sponsor established TCI Communications
Financing I (the "Trust"), as a business trust under the Delaware Business Trust
Act pursuant to a Declaration of Trust dated as of November 21, 1995 (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 21, 1995, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Subordinated Notes of the Subordinated Note Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference in this Declaration to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
------------------
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, a Sunday or any
------------
other day on which banking institutions in New York, New York are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S)3801 et seq., as it may be amended from time to time.
------------ -- ---
2
<PAGE>
"Certificate" means a Common Security Certificate or a Preferred
-----------
Security Certificate.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank or other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ______________, 1995.
------------
"Code" means the Internal Revenue Code of 1986 as amended from time to
----
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities Guarantee" means the guarantee agreement, dated as
---------------------------
of ____________, ____, of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
---------------
"Common Security Certificate" means a definitive certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Definitive Preferred Security Certificates" has the meaning set forth
------------------------------------------
in Section 9.4.
"Direction" by a Person means a written direction signed:
---------
(a) if the Person is a natural Person, by that Person; or
3
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities
------------
in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
---
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Subordinated Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Global Certificate" has the meaning set forth in Section 9.4.
------------------
"Holder" means a Person in whose name a Certificate representing a
------
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
------------------
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of _______, 1995, as amended
---------
and supplemented by a ______ Supplemental Indenture, dated as of ___________,
____, among the Subordinated Note Issuer and the Subordinated Note Trustee, and
any further indenture supplemental thereto relating to the Subordinated Notes.
"Investment Company" means an investment company (as defined in the
------------------
Investment Company Act) that is required to register as such under the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
------------------------
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided in the terms of the Preferred Securi-
4
<PAGE>
ties and by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
------------------
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
------------
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement, dated
------------------------------
as of ______, ____, of the Sponsor in respect of the Preferred Securities.
5
<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
------------------
"Preferred Security Beneficial Owner" means, with respect to a Book
-----------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
------------------------------
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement among the Trust, the
-----------------
Subordinated Note Issuer and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Preferred Securities.
"Property Trustee" means the Trustee meeting the eligibility
----------------
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are
------
only two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee
---------------
and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
-------------------
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer in the corporate trust department
of the Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
---------
6
<PAGE>
"Securities" means the Common Securities and the Preferred Securities.
----------
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Securities Guarantees" means the Preferred Securities Guarantee and
---------------------
the Common Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
-------------
"Sponsor" means TCI Communications, Inc., a Delaware corporation, or
-------
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Subordinated Note Issuer" means the Sponsor in its capacity as issuer
------------------------
of the Subordinated Notes.
"Subordinated Note Trustee" means The Bank of New York, as trustee
-------------------------
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Subordinated Notes" means the __% Subordinated Deferrable Interest
------------------
Notes Due ____, 20__ to be issued by the Subordinated Note Issuer under the
Indenture and held by the Property Trustee. A specimen certificate representing
a Subordinated Note is attached hereto as Exhibit B. The Subordinated Notes
will be subordinate and junior in right of payment to certain other indebtedness
of the Subordinated Note Issuer as set forth in the Indenture.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Securities" means, except as
-------------------------------------------
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated
7
<PAGE>
under the Code by the United States Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended to the date hereof.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that
-------------
8
<PAGE>
neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written request
therefor, a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
of Paying Agent (if acting in such capacity); provided that the Property Trustee
-------------
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after May 15 of each year or at such other time as
required under (S) 313(b) of the Trust Indenture Act, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
9
<PAGE>
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Notes (a "Super Majority")
to be waived under the Indenture, the Event of Default under the Declaration may
only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities outstanding that the relevant
Super Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------------
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as
10
<PAGE>
provided below in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities outstanding that the relevant Super
Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities known to the Property Trustee, unless such defaults have been cured
before the
11
<PAGE>
giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
-------------
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Subordinated Notes, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) the Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or a Responsible Officer charged with the administration of the
Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
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The Trust is named "TCI Communications Financing I," as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of the Securities. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office.
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The address of the principal office of the Trust is c/o TCI
Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado
80111-3000. On ten Business Days written notice to the Holders of the
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
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The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to purchase and hold the
Subordinated Notes and the Preferred Securities Guarantee, and (b) except as
otherwise limited herein, to engage in only those other activities neces-
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sary, or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Authority.
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Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
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Except as provided in Section 3.8 with respect to the Subordinated
Notes and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
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The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
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Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
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interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission the registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Preferred Securities;
(iv) execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Preferred Securities under Section
12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities;
(c) to acquire the Subordinated Notes and the Preferred Securities
Guarantee with the proceeds of the sale of the Preferred Securities and the
Common Securities; provided, however, that the Regular Trustees shall cause
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legal title to the Subordinated Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Preferred Securities and
the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
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shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of (S)316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Subordinated Note Issuer of its election to defer
payments of interest on the Subordinated Notes by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
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(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Subordinated Note Issuer to ensure that the
Subordinated Notes will be treated as indebtedness of the Subordinated Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
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Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
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(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Notes or the Preferred Securities Guarantee, but shall
distribute all such proceeds to Holders of Securities pursuant to the terms
of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Notes;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration, (A) direct the time,
method and place of exercising any trust or power conferred upon the
Subordinated Note Trustee with respect to the Subordinated Notes, (B) waive
any past default that is waivable under Section 6.04 of the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal
of all the Subordinated Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or the
Subordinated Notes where such consent shall be required unless the Trust
shall have received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
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(a) The legal title to the Subordinated Notes shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Notes shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 5.6.
Such vesting (and cessation as to the resigning Property Trustee) of title shall
be effective whether or not conveyancing documents with regard to the
Subordinated Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Subordinated Notes held by the Property Trustee, deposit such
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funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Notes are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect the distribution
of the Subordinated Notes to Holders of Securities upon the occurrence of
certain special events (as may be defined in the terms of the Securities)
arising from a change in law or a change in legal interpretation or other
specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated Notes under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for
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the benefit of Holders of the Securities, enforce its rights as holder of the
Subordinated Notes subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
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(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and
the Property Trustee
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shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Subordinated Notes and the
Property Trustee Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Declaration, the Trust Indenture Act and
Rule 3a-7;
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(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Subordinated Notes or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
the default or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Property Trustee.
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(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any
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filing under tax or securities laws) or any rerecording, refiling or
reregistration thereof;
(v) the Property Trustee may consult with counsel or other experts of
its selection and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of the
Sponsor's or its Affiliates' employees. The Property Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have provided to the
Property Trustee adequate security and indemnity, which would satisfy a
reasonable person in the position of the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Property
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to relieve the Property Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders, and the signature of the Property
Trustee or its agents alone
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shall be sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property Trustee to so
act or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property Trustee
shall deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder, the Property Trustee (i)
may request instructions from the Holders of the Securities which instructions
may only be given by the Holders of the same proportion in liquidation amount of
the Securities as would be entitled to direct the Property Trustee under the
terms of the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
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Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities, of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of (S) 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
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Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a
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majority of or, if there are only two, any Regular Trustee or, if there is only
one, such Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute
pursuant to Section 3.6; provided that, the registration statement referred to
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in Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
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The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
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The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
SECTION 3.15 Mergers.
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(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
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(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank with respect to Distributions
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and payments upon liquidation, redemption and otherwise;
(ii) the Subordinated Note Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Subordinated Notes;
(iii) the Preferred Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with an other organization on which the
Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not cause
the Preferred Securities (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of the
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of such Holders' interests in the Preferred
Securities as a result of such merger, consolidation, amalgamation or
replacement);
(vi) such Successor Entity has a purpose identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or replacement, the
Sponsor has received an opinion of a nationally recognized independent counsel
to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the Preferred
Securities Guarantee.
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(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
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On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
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In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Expenses.
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(a) The Sponsor shall be responsible for and shall pay for all debts
and obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees, the 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), duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) The Sponsor will pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements
as may be necessary or desirable in order to give full effect to the provisions
of this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided that, if the Property Trustee does not also act as Delaware
- -------- ----
Trustee, the number of Trustees shall be at least three (3).
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
- -------- ----
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The Delaware Trustee may be an Affiliate of the
Property Trustee.
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Commission
to act as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires a
trustee having certain qualifications to hold title to the "eligible assets"
of the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
-------------------------------------------------------
Generally.
---------
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Initial Trustees.
----------------
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The initial Regular Trustees shall be:
Bernard W. Schotters
Stephen M. Brett
[___________________________]
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
The initial Property Trustee shall be:
The Bank of New York
SECTION 5.6 Appointment, Removal and Resignation of
---------------------------------------
Trustees.
--------
(a) Subject to Section 5.6(b), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities or by unanimous
written consent.
(b)(i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon
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such delivery or upon such later date as is specified therein; provided,
--------
however, that:
- -------
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) if the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the
holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Property Trustee or Delaware Trustee,
as applicable, may petition any court of competent jurisdiction for appointment
of a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive evi-
30
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dence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
--------
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before such meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence
(whether in person or by telephone) of a Regular Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Regular Trustee
attends a meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including
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any registration statement or amendment thereto filed with the Commission, or
making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Subordinated Note Issuer makes a payment of interest
(including Additional Interest (as defined in the Indenture)), premium and/or
principal on the Subordinated Notes held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities.") The Trust shall not issue
any securities or other interests in respect of the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed
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any of the Certificates shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities may be
listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor; the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Holder of the Common Securities or the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
33
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with
the terms of the Securities and all of the Subordinated Notes in accordance
with the terms thereof shall have been distributed to the Holders of
Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration and these Securities shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, (x) the Sponsor may only transfer
Common Securities to a Related Party and (y) a Related Party may only transfer
Common Securities to the Sponsor or another Related Party; provided that, any
-------- ----
such transfer is subject to the condition precedent that the transferor obtain
the written opinion of nationally recognized independent counsel experienced in
such matters that such transfer would not cause more than an insubstantial risk
that:
34
<PAGE>
(i) the Trust would no longer be classified for United States
federal income tax purposes as a grantor trust; or
(ii) the Trust would become an Investment Company or the
transferee would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the terms of the Securities represented by such Certificate.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of
35
<PAGE>
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests in
such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
36
<PAGE>
SECTION 9.7 Definitive Preferred Security Certificates.
------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such election pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to the Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the Clearing Agency. The
Definitive Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them harmless,
37
<PAGE>
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders, which shall be made solely
from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
38
<PAGE>
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provide terms that are, fair and reasonable to the Trust or any
Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term
39
<PAGE>
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a). The indemnification shall survive the termination of this Declaration.
40
<PAGE>
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents which shall reflect, in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders, within 90 days after the
41
<PAGE>
end of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each Holder, any annual United States federal income tax information
statement, required by the Code, containing such information with regard to the
Securities held by such Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
-------- -------
respect of the Subordinated Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
-------- -------
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to such
Holder to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the
42
<PAGE>
amount of the withholding to such Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
43
<PAGE>
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the Property
Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) If the Trust has any Securities outstanding, any amendment that
would adversely affect the rights, privileges or preferences of any Holder of
such Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may be
defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the Sponsor;
(iv) in the event the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, conform to any change in Rule 3a-7 or written
change in interpretation or application of Rule 3a-7 by any legislative body,
court,
44
<PAGE>
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) cause the trust to continue to be classified for purposes of United
States federal income taxation as a grantor trust; provided, such amendment
--------
does not have a material adverse effect on the rights, preferences or
privileges of the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security Certificates
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of any
class of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of Holders is permitted or required under this Declaration or the
rules of any stock exchange on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of such Holders. Any action that may be taken at a meeting of
Holders may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by Holders owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present
45
<PAGE>
and voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written consent
submitted to Holders for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on all
matters in which such Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders were stockholders of a
Delaware corporation;
(iii) each meeting of Holders shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders, including
notice of the time, place or purpose of any meeting at which any matter is
to be voted on by any Holders, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time
46
<PAGE>
of the successor Property Trustee's acceptance of its appointment as Property
Trustee, that:
(a) the Property Trustee is a banking corporation or association with
trust powers, duly organized, validly existing and in good standing under the
laws of a state of the United States or of the United States, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or federal banking authority is required for the execution,
delivery or performance by the Property Trustee of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the
47
<PAGE>
Declaration. The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the Declaration; and
(d) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders):
TCI Communications Financing I
c/o TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice of to
the Holders):
The Bank of New York (Delaware)
400 White Clay Center, Route 273
Newark, Delaware 19711
Attention:
48
<PAGE>
(c) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice of
to the Holders):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
49
<PAGE>
SECTION 14.5 Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
50
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Declaration to be
executed as of the day and year first above written.
[ ],
as Regular Trustee
__________________________
[ ],
as Regular Trustee
__________________________
[ ],
as Regular Trustee
__________________________
THE BANK OF NEW YORK
(DELAWARE),
as Delaware Trustee
By: _______________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By: _______________________
Name:
Title:
51
<PAGE>
TCI COMMUNICATIONS, INC.,
as Sponsor
By: _______________________
Name:
Title:
52
<PAGE>
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Further to Section 7.1 of the Declaration of Trust, dated as of
_________ __, 1995 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Preferred Securities. [ ] Preferred Securities of
--------------------
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are hereby
designated for the purposes of identification only as "_____% Trust Originated
Preferred Securities/SM/ ('TOPrS'/SM/)" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. [ ] Common Securities of the
-----------------
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $25 per common security, are hereby
designated for the purposes of identification only as "______% Trust Originated
Common Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
I-1
<PAGE>
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ______% (the "Coupon Rate") of the stated liquidation amount of $25 per
Security, such rate being the rate of interest payable on the Subordinated Notes
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Subordinated Notes held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
March 31, 1996, except as otherwise described below. The Subordinated Note
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Subordinated
Notes for a period not exceeding 20 consecutive quarters (each an "Extension
Period"), provided that no Extension Period shall last beyond the date of
-------- ----
maturity of the Subordinated Notes. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Subordinated Note Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 20 consecutive quarters or last beyond the
date of maturity of the Subordinated Notes. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
on the first record date for the payment of Distributions after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Subordinated Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred
I-2
<PAGE>
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Subordinated Notes. Subject to
any applicable laws and regulations and the provisions of the Declaration, each
such payment in respect of the Preferred Securities will be made as described
under the heading "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus dated _________ __,
1995, (the "Prospectus"), included in the Registration Statement on Form S-3 of
the Sponsor (in its capacity as the Subordinated Note Issuer and the issuer of
the Preferred Securities Guarantee) and the Trust (Reg. No. 33-___). The
relevant record dates for the Common Securities shall be the same record dates
as for the Preferred Securities. If the Preferred Securities shall not continue
to remain in book-entry only form, the relevant record dates for the Preferred
Securities shall conform to the rules of any securities exchange on which such
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Subordinated Notes. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Subordinated Note Issuer having failed to make a payment under the
Subordinated Notes, will cease to be payable to the Person in whose name such
Securities are registered on the relevant regular record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture for the making of such payment. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders on the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive out
of the assets of the Trust available for distribution to Holders after
satisfaction of
I-3
<PAGE>
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $25 per Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Subordinated Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Subordinated Notes in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed at a redemption price of $25 per Security plus an
amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the procedure for redeeming Preferred Securities will be as
described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each as defined
below, and each a "Special Event") shall occur and be continuing the Regular
Trustees shall, except in certain limited circumstances in relation to a Tax
Event described in this Section 4(c), dissolve the Trust and, after satisfaction
of creditors, cause Subordinated Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment, as the Securities, to be distributed to the Holders in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, within
90 days following the occurrence of such Special Event (the "90 Day Period");
provided, however, that, as
- -------- -------
I-4
<PAGE>
a condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
Subordinated Notes, and provided, further, that, if at the time there is
-------- -------
available to the Trust the opportunity to eliminate, within the 90 Day Period,
the Special Event by taking some 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 Trust, the Subordinated Note Issuer, the Sponsor or the
Holders ("Ministerial Action"), the Trust will pursue such Ministerial Action in
lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax Event
Opinion (as defined hereinafter) by the Regular Trustees, the Subordinated Note
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that the Subordinated
Note Issuer would be precluded from deducting the interest on the Subordinated
Notes for United States federal income tax purposes even if the Subordinated
Notes were distributed to the Holders in liquidation of such Holders' interests
in the Trust as described in this Section 4(c), or (ii) in the event of any
Special Event, after receipt of a Tax Event Opinion or Investment Company Event
Opinion (as defined hereinafter), as the case may be, the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, the Subordinated Note Issuer shall have the right at any
time, upon not less than 30 nor more than 60 days notice, to redeem the
Subordinated Notes in whole or in part for cash within 90 days following the
occurrence of such Special Event, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Subordinated Notes so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at the time
-------- -------
there is available to the Trust the opportunity to eliminate, within such 90 day
period, the Special Event by taking some Ministerial Action, the Trust or the
Subordinated Note Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that on or after the date of the
Prospectus, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
I-5
<PAGE>
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of the Prospectus, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or received on
the Subordinated Notes, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable by the Subordinated Note Issuer
to the Trust on the Subordinated Notes is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Subordinated Note
Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is a more than an insubstantial risk that the Trust is
or will be considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of the Prospectus.
On and from the date fixed by the Regular Trustees for any
distribution of Subordinated Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) DTC (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Subordinated Notes to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by the Depository
or its nominee (or any successor Clearing Agency or its nominee), will be deemed
to represent beneficial interests in the Subordinated Notes having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such
certificates are surrendered or presented to the Subordinated Note Issuer or its
agent for transfer or reissue.
I-6
<PAGE>
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Subordinated Notes are distributed to holders of the
Securities, pursuant to the terms of the Indenture the Subordinated Note Issuer
will use its best efforts to have the Subordinated Notes listed on the New York
Stock Exchange or on such other exchange or the Nasdaq National Market as the
Preferred Securities were listed immediately prior to the distribution of the
Subordinated Notes.
(f) The following provisions shall apply to any call for redemption of
Securities or any distribution of Subordinated Notes to Holders:
(i) Notice of any redemption of, or notice of distribution of
Subordinated Notes in exchange for, Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Subordinated Notes.
For purposes of the calculation of the date of redemption or exchange and
the dates on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders.
Each Redemption/Distribution Notice shall be addressed to each Holder at the
address of such Holder appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of record
by the Depository or its nominee (or any successor Clearing Agency or its
nominee), the distribution of the proceeds of such redemption will be made
to each Clearing Agency Participant (or Person on whose behalf such Clearing
Agency or nominee holds such securities) in accordance with the procedures
applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Notes are redeemed as set
I-7
<PAGE>
out in this Section 4 (which notice will be irrevocable), then (A) while the
Preferred Securities are in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption date, the
Property Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give the
Depository irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities, provided that the Subordinated Note
--------
Issuer has deposited with the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Subordinated Notes
prior to such time, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date, provided that the Subordinated Note Issuer has
deposited with the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Subordinated Notes, prior to such
mailing. If a Redemption/Distribution Notice shall have been given and funds
deposited with the Property Trustee on or before the redemption date as
required, then immediately prior to the close of business on the redemption date
distributions will cease to accrue on the Securities so called for redemption
and all rights of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither the
Regular Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not paid on the
redemption date either by the Property Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such Securities
will continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
I-8
<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof at their addresses appearing on the books and records of the Trust,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror is
not the Holder of the Common Securities or the obligor under the Indenture,
the Sponsor or any of its subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the open market or
by private agreement.
5. Voting Rights - Preferred Securities.
------------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the Declaration,
including (i) directing the time, method, place of conducting any proceeding for
any remedy available to the Subordinated Note Trustee, or exercising any trust
or power conferred on the Subordinated Note Trustee with respect to the
Subordinated Notes, (ii) waive any past default and its consequences that is
waivable under Section 6.04 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Notes
shall be due and payable, provided, however, that, where a consent under the
-------- -------
Indenture would require the consent or act of the Holders of greater than a
majority in principal amount of Subordinated Notes affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take such action
at the direction of the Holders of at least the proportion in liquidation amount
of the Preferred Securities outstanding which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accor-
I-9
<PAGE>
dance with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel to
the effect that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust on account of such action.
If the Property Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may institute a legal proceeding directly against
any Person to enforce the Property Trustee's rights under the Declaration
without first instituting a legal proceeding against the Property Trustee or any
other Person. If an Event of Default occurs that results from the failure of the
Subordinated Note Issuer to pay principal of or interest on the Subordinated
Notes when due, then during the continuance of such Event of Default each Holder
of Preferred Securities may directly institute proceedings against the
Subordinated Note Issuer to obtain payment to such Holder of an amount equal to
the principal or interest so defaulted on with respect to Subordinated Notes in
a principal amount equal to the liquidation amount of the Preferred Securities
owned by such Holder. No Holder of Preferred Securities will be entitled to
exercise directly against the Subordinated Note Issuer any other remedy
available to the Property Trustee, as the record holder of the Subordinated
Notes, unless the Property Trustee first fails to exercise such remedy.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Notes in accordance with the Declaration and the
terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c) and 7 or as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
I-10
<PAGE>
(c) Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived, or otherwise eliminated and subject to the requirements of the
penultimate sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Subordinated Note Trustee, or exercising any trust or power conferred on the
Subordinated Note Trustee with respect to the Subordinated Notes, (ii) waive any
past default and its consequences that is waivable under Section 6.04 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Subordinated Notes shall be due and payable, provided
--------
that, where a consent or action under the Indenture would require the consent or
- ----
act of the Holders of a Super Majority, the Property Trustee may only give such
consent or take such action at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Notes outstanding. Notwithstanding any vote pursuant to this
Section 6(c), the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the Declaration, any Holder
of Common Securities may institute a legal proceeding directly against any
Person to enforce the Property Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
I-11
<PAGE>
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Notes in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than under the
circumstances described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as a single
class; provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the holder of
the Subordinated Notes is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Subordinated
Notes, the Property Trustee shall request the direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
-------- -------
the consent of the holders of a Super Majority, the Property Trustee may only
give such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding; provided, further, that the Property Trustee shall not take any
-------- -------
action in accordance with the directions of the Holders of the Securities under
this Section 7(b) unless the Property Trustee
I-12
<PAGE>
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration in respect of the Preferred Securities has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, then to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
-------
The Preferred Securities rank pari passu, and payment thereon shall be
---- -----
made Pro Rata, with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Subordinated
Notes held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
10. Listing.
-------
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
I-13
<PAGE>
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
TCI Communications Financing I
____% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
TCI Communications Financing I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of _______ preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust designated the _____% Trust Originated Preferred Securities.
A1-1
<PAGE>
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of _______, 1996, as the same may be amended from time to
time (the "Declaration") including the designation of the terms of Preferred
Securities as set forth in Annex I to the Declaration. The Preferred Securities
and the Common Securities issued by the Trust pursuant to the Declaration
represent undivided beneficial interests in the assets of the Trust, including
the Subordinated Notes (as defined in the Declaration) issued by TCI
Communications, Inc., a Delaware corporation ("TCIC"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement of TCIC dated as of
_________________, 1996 (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture to
the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
The Holder of this certificate, by accepting this certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Subordinated Notes,
including that the Subordinated Notes are subordinate and junior in right to
payment to all Senior Indebtedness (as defined in the Indenture) as and to the
extent provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is (x) subordinate and junior in right to payment
to all other liabilities of TCIC, including the Subordinated Notes, except those
made pari passu or subordinated by their terms, and (y) pari passu with the most
senior preferred stock now or hereafter issued by TCIC and with any guarantee
now or hereafter entered into by TCIC in respect of any preferred or preference
stock of any affiliate of TCIC.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the regular Trustees of the Trust have executed
this certificate for and on behalf of the Trust.
Dated:
TCI COMMUNICATIONS FINANCING I
By: __________________________ By: _____________________
Regular Trustee
COUNTERSIGNED AND REGISTERED: TRANSFER AGENT AND
REGISTRAR
THE BANK OF NEW YORK
(NEW YORK, NEW YORK)
AUTHORIZED SIGNATURE
A1-2
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common UNIF GIFT ACT __________ Custodian __________
TEN ENT as tenants by the entireties (Cust) (Minor)
JT TEN as joint tenants with right of Under Uniform Gifts to Minors
survivorship and not as tenants Act _______________
in common (State)
Additional abbreviations may also be used though not in the above list.
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Please print or typewrite name(s) and address(es) including postal zip code(s)
of assignee(s)
of the Preferred Securities represented by this Certificate and irrevocably
appoints
_______________________________________________________________________________
_______________________________________________________________________________
___________________________________________________________ attorney to transfer
such Preferred Securities on the books of the Trust. The attorney may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
* IMPORTANT READ CAREFULLY:
The signature(s) to this assignment must correspond with the name(s) as
written upon the face of the certificate in every particular without alteration,
enlargement or change whatsoever. The signature(s) of the person(s) executing
this power must be guaranteed by an eligible guarantor institution which, at the
time of issuing the guarantee, is a member of, or a participant in the medallion
signature guarantee program recognized by the Securities Transfer
Association.
A1-3
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TCI Communications Financing I
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
TCI Communications Financing I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the ______% Trust Originated Common Securities (liquidation amount
$25 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of _______,
1995, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Subordinated Notes as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Subordinated
Notes.
A2-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this __ day of
____________, 199__.
TCI COMMUNICATIONS FINANCING I
By: _________________________
Name:
Title:
A2-2
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's name and social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
______________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
<PAGE>
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
Exhibit 4.10
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
TCI COMMUNICATIONS FINANCING II
Dated as of _______ __, 1996
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions............................................ 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...................... 8
SECTION 2.2 Lists of Holders of Securities........................ 8
SECTION 2.3 Reports by the Property Trustee....................... 9
SECTION 2.4 Periodic Reports to Property Trustee.................. 9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent............................................. 9
SECTION 2.6 Events of Default; Waiver............................. 10
SECTION 2.7 Event of Default; Notice.............................. 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.................................................. 12
SECTION 3.2 Office................................................ 12
SECTION 3.3 Purpose............................................... 12
SECTION 3.4 Authority............................................. 13
SECTION 3.5 Title to Property of the Trust........................ 13
SECTION 3.6 Powers and Duties of the Regular Trustees............. 13
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees.......................................... 16
SECTION 3.8 Powers and Duties of the Property Trustee............. 17
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee.................................. 19
SECTION 3.10 Certain Rights of the Property Trustee................ 21
SECTION 3.11 Delaware Trustee...................................... 23
SECTION 3.12 Execution of Documents................................ 23
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities......................................... 24
SECTION 3.14 Duration of Trust..................................... 24
SECTION 3.15 Mergers............................................... 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities................ 26
SECTION 4.2 Responsibilities of the Sponsor........................ 26
SECTION 4.3 Expenses............................................... 27
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees..................................... 27
i
<PAGE>
Page
----
SECTION 5.2 Delaware Trustee....................................... 28
SECTION 5.3 Property Trustee; Eligibility.......................... 28
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally............................. 29
SECTION 5.5 Initial Trustees....................................... 29
SECTION 5.6 Appointment, Removal and Resignation of
Trustees............................................... 30
SECTION 5.7 Vacancies among Trustees............................... 31
SECTION 5.8 Effect of Vacancies.................................... 31
SECTION 5.9 Meetings............................................... 32
SECTION 5.10 Delegation of Power.................................... 32
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.......................................... 33
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities................ 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust................................... 34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities................................. 35
SECTION 9.2 Transfer of Certificates............................... 35
SECTION 9.3 Deemed Security Holders................................ 36
SECTION 9.4 Book Entry Interests................................... 36
SECTION 9.5 Notices to Clearing Agency............................. 37
SECTION 9.6 Appointment of Successor Clearing Agency............... 37
SECTION 9.7 Definitive Preferred Security Certificates............. 37
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates...... 38
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.............................................. 39
SECTION 10.2 Exculpation............................................ 39
SECTION 10.3 Fiduciary Duty......................................... 40
SECTION 10.4 Indemnification........................................ 41
ii
<PAGE>
Page
----
SECTION 10.5 Outside Businesses..................................... 41
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year............................................ 42
SECTION 11.2 Certain Accounting Matters............................. 42
SECTION 11.3 Banking................................................ 43
SECTION 11.4 Withholding............................................ 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................. 44
SECTION 12.2 Meetings of the Holders; Action by Written Consent..... 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee..... 47
SECTION 13.2 Representations and Warranties of Delaware Trustee..... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices................................................ 49
SECTION 14.2 Governing Law.......................................... 50
SECTION 14.3 Intention of the Parties............................... 50
SECTION 14.4 Headings............................................... 50
SECTION 14.5 Successors and Assigns................................. 50
SECTION 14.6 Partial Enforceability................................. 50
SECTION 14.7 Counterparts........................................... 51
ANNEX I TERMS OF SECURITIES.................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE.......................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.................... A2-1
EXHIBIT B SPECIMEN OF SUBORDINATED NOTE.......................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................. C-1
iii
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a) ......................................... 5.3(a)
310(b) ......................................... 5.3(c), 5.3(d)
310(c) ......................................... Inapplicable
311(a) ......................................... 2.2(b)
311(b) ......................................... 2.2(b)
311(c) ......................................... Inapplicable
312(a) ......................................... 2.2(a)
312(b) ......................................... 2.2(b)
313 ............................................. 2.3
314(a) ......................................... 2.4
314(b) ......................................... Inapplicable
314(c) ......................................... 2.5
314(d) ......................................... Inapplicable
314(e) ......................................... 1.1, 2.5
314(f) ......................................... Inapplicable
315(a) ......................................... 3.9(b)
315(c) ......................................... 3.9(a)
315(d) ......................................... 3.9(a)
316(a) ......................................... Annex I
316(c) ......................................... 3.6(e)
317(a) ......................................... 3.8(d)
317(b) ......................................... 3.8(h)
_______________
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TCI COMMUNICATIONS FINANCING II
_________ __, ____
DECLARATION OF TRUST ("Declaration"), dated and effective as of
_________ __, ____, by the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial interests
in the Trust to be issued pursuant to this Declaration.
W I T N E S S E T H:
-------------------
WHEREAS, the Trustees and the Sponsor established TCI Communications
Financing II (the "Trust"), as a business trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 21, 1995 (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 21, 1995, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Subordinated Notes of the Subordinated Note Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits
to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference in this Declaration to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
------------------
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, a Sunday or any
------------
other day on which banking institutions in New York, New York are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S)3801 et seq., as it may be amended from time to time.
------------ -- ---
2
<PAGE>
"Certificate" means a Common Security Certificate or a Preferred
-----------
Security Certificate.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank or other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ______________, 1995.
------------
"Code" means the Internal Revenue Code of 1986 as amended from time to
----
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities Guarantee" means the guarantee agreement, dated as
---------------------------
of ____________, ____, of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
---------------
"Common Security Certificate" means a definitive certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Definitive Preferred Security Certificates" has the meaning set forth
------------------------------------------
in Section 9.4.
"Direction" by a Person means a written direction signed:
---------
(a) if the Person is a natural Person, by that Person; or
3
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities
------------
in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
---
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Subordinated Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Global Certificate" has the meaning set forth in Section 9.4.
------------------
"Holder" means a Person in whose name a Certificate representing a
------
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
------------------
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of _______, 1995, as amended
---------
and supplemented by a ______ Supplemental Indenture, dated as of ___________,
____, among the Subordinated Note Issuer and the Subordinated Note Trustee, and
any further indenture supplemental thereto relating to the Subordinated Notes.
"Investment Company" means an investment company (as defined in the
------------------
Investment Company Act) that is required to register as such under the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
------------------------
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided in the terms of the Preferred Securi-
4
<PAGE>
ties and by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
------------------
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
------------
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement, dated
------------------------------
as of ______, ____, of the Sponsor in respect of the Preferred Securities.
5
<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
------------------
"Preferred Security Beneficial Owner" means, with respect to a Book
-----------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
------------------------------
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement among the Trust, the
-----------------
Subordinated Note Issuer and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Preferred Securities.
"Property Trustee" means the Trustee meeting the eligibility
----------------
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are
------
only two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee
---------------
and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
-------------------
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer in the corporate trust department
of the Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
---------
6
<PAGE>
"Securities" means the Common Securities and the Preferred Securities.
----------
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Securities Guarantees" means the Preferred Securities Guarantee and
---------------------
the Common Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
-------------
"Sponsor" means TCI Communications, Inc., a Delaware corporation, or
-------
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Subordinated Note Issuer" means the Sponsor in its capacity as issuer
------------------------
of the Subordinated Notes.
"Subordinated Note Trustee" means The Bank of New York, as trustee
-------------------------
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Subordinated Notes" means the __% Subordinated Deferrable Interest
------------------
Notes Due ____, ____ to be issued by the Subordinated Note Issuer under the
Indenture and held by the Property Trustee. A specimen certificate representing
a Subordinated Note is attached hereto as Exhibit B. The Subordinated Notes
will be subordinate and junior in right of payment to certain other indebtedness
of the Subordinated Note Issuer as set forth in the Indenture.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Securities" means, except as
-------------------------------------------
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated
7
<PAGE>
under the Code by the United States Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended to the date hereof.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that
-------------
8
<PAGE>
neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written request
therefor, a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
of Paying Agent (if acting in such capacity); provided that the Property Trustee
-------------
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after May 15 of each year or at such other time as
required under (S) 313(b) of the Trust Indenture Act, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
9
<PAGE>
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Notes (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities outstanding
that the relevant Super Majority represents of the aggregate principal
amount of the Subordinated Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------------
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as
10
<PAGE>
provided below in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities outstanding that the relevant Super
Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities known to the Property Trustee, unless such defaults have been cured
before the
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giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
-------------
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Subordinated Notes, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) the Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or a Responsible Officer charged with the administration of
the Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "TCI Communications Financing II," as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of the Securities. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o TCI
Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado
80111-3000. On ten Business Days written notice to the Holders of the
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to purchase and hold the
Subordinated Notes and the Preferred Securities Guarantee, and (b) except as
otherwise limited herein, to engage in only those other activities neces-
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sary, or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Subordinated
Notes and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
-------- -------
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
-------- -------
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission the registration statement on
Form S-3 prepared by the Sponsor, including any amendments thereto, pertaining
to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take any
acts as determined by the Sponsor to be necessary in order to qualify or
register all or part of the Preferred Securities in any State in which the
Sponsor has determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by the Sponsor, to the New
York Stock Exchange, Inc. or any other national stock exchange or the Nasdaq
Stock Market's National Market for listing upon notice of issuance of any
Preferred Securities;
(iv) execute and file with the Commission a registration statement on Form
8-A, including any amendments thereto, prepared by the Sponsor, relating to the
registration of the Preferred Securities under Section 12(b) of the Exchange
Act; and
(v) execute and enter into the Underwriting Agreement and Pricing Agreement
providing for the sale of the Preferred Securities;
(c) to acquire the Subordinated Notes and the Preferred Securities
Guarantee with the proceeds of the sale of the Preferred Securities and the
Common Securities; provided, however, that the Regular Trustees shall cause
-------- -------
legal title to the Subordinated Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Preferred Securities and
the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
-------- ----
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S)316(c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Subordinated Note Issuer of its election to defer
payments of interest on the Subordinated Notes by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
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(i) causing the Trust not to be deemed to be an Investment Company required
to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal income
tax purposes as a grantor trust; and
(iii) cooperating with the Subordinated Note Issuer to ensure that the
Subordinated Notes will be treated as indebtedness of the Subordinated Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of Holders;
- -------- ----
and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the Subordinated
Notes or the Preferred Securities Guarantee, but shall distribute all such
proceeds to Holders of Securities pursuant to the terms of this Declaration and
of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Notes;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration, (A) direct the time,
method and place of exercising any trust or power conferred upon the
Subordinated Note Trustee with respect to the Subordinated Notes, (B) waive
any past default that is waivable under Section 6.04 of the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal
of all the Subordinated Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or the
Subordinated Notes where such consent shall be required unless the Trust
shall have received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Subordinated Notes shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Notes shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 5.6.
Such vesting (and cessation as to the resigning Property Trustee) of title shall
be effective whether or not conveyancing documents with regard to the
Subordinated Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Subordinated Notes held by the Property Trustee, deposit such
17
<PAGE>
funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Notes are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect the distribution
of the Subordinated Notes to Holders of Securities upon the occurrence of
certain special events (as may be defined in the terms of the Securities)
arising from a change in law or a change in legal interpretation or other
specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated Notes under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for
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the benefit of Holders of the Securities, enforce its rights as holder of the
Subordinated Notes subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be
construed to relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and the
Property Trustee
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shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless it
shall be proved that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property Trustee to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Subordinated Notes and the Property
Trustee Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property Trustee under
this Declaration, the Trust Indenture Act and Rule 3a-7;
20
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(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Subordinated Notes or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree in writing with
the Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
the default or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Property Trustee.
--------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any
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filing under tax or securities laws) or any rerecording, refiling or
reregistration thereof;
(v) the Property Trustee may consult with counsel or other experts of its
selection and the advice or opinion of such counsel and experts with respect to
legal matters or advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
such advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of the Sponsor's or its Affiliates'
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have provided to the Property
Trustee adequate security and indemnity, which would satisfy a reasonable person
in the position of the Property Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Property Trustee provided, that, nothing contained in
this Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder shall
bind the Trust and the Holders, and the signature of the Property Trustee or its
agents alone
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shall be sufficient and effective to perform any such action and no third
party shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such instructions; and
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities, of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of (S) 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a
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majority of or, if there are only two, any Regular Trustee or, if there is only
one, such Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute
pursuant to Section 3.6; provided that, the registration statement referred to
-------- ----
in Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
-------- ----
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank with respect to
Distributions
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and payments upon liquidation, redemption and otherwise;
(ii) the Subordinated Note Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Subordinated Notes;
(iii) the Preferred Securities or any Successor Securities are listed, or
any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with an other organization on which the
Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not cause
the Preferred Securities (including any Successor Securities) to be downgraded
by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of the
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of such Holders' interests in the Preferred
Securities as a result of such merger, consolidation, amalgamation or
replacement);
(vi) such Successor Entity has a purpose identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or replacement, the
Sponsor has received an opinion of a nationally recognized independent counsel
to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the Preferred
Securities Guarantee.
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(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as
the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Expenses.
--------
(a) The Sponsor shall be responsible for and shall pay for all debts
and obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees, the 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), duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) The Sponsor will pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements
as may be necessary or desirable in order to give full effect to the provisions
of this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided that, if the Property Trustee does not also act as Delaware Trustee,
- -------- ----
the number of Trustees shall be at least three (3).
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
- -------- ----
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The Delaware Trustee may be an Affiliate of the
Property Trustee.
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Commission
to act as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by federal, State, Territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires a
trustee having certain qualifications to hold title to the "eligible assets"
of the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
-----------------------------------------------------------------
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Initial Trustees.
----------------
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The initial Regular Trustees shall be:
Bernard W. Schotters
Stephen M. Brett
[___________________________]
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
The initial Property Trustee shall be:
The Bank of New York
SECTION 5.6 Appointment, Removal and Resignation of
---------------------------------------
Trustees.
--------
(a) Subject to Section 5.6(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities or by unanimous
written consent.
(b)(i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2
and 5.4 (a "Successor Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon
29
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such delivery or upon such later date as is specified therein; provided,
--------
however, that:
- -------
(i) No such resignation of the Trustee that acts as the Property Trustee
shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) if the Trust is deemed not to be an Investment Company solely by
reason of Rule 3a-7, until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware Trustee
shall be effective until a Successor Delaware Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor Delaware
Trustee and delivered to the Trust, the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive evi-
30
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dence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
--------
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before such meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence
(whether in person or by telephone) of a Regular Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Regular Trustee
attends a meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including
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any registration statement or amendment thereto filed with the Commission, or
making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Subordinated Note Issuer makes a payment of interest
(including Additional Interest (as defined in the Indenture)), premium and/or
principal on the Subordinated Notes held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities.") The Trust shall not issue
any securities or other interests in respect of the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed
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any of the Certificates shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities may be
listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor; the filing
of a certificate of cancellation with respect to the Trust or the revocation of
the Holder of the Common Securities or the Sponsor's charter and the expiration
of 90 days after the date of revocation without a reinstatement thereof;
33
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with the
terms of the Securities and all of the Subordinated Notes in accordance with
the terms thereof shall have been distributed to the Holders of Securities
in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration and these Securities shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, (x) the Sponsor may only transfer
Common Securities to a Related Party and (y) a Related Party may only transfer
Common Securities to the Sponsor or another Related Party; provided that, any
-------- ----
such transfer is subject to the condition precedent that the transferor obtain
the written opinion of nationally recognized independent counsel experienced in
such matters that such transfer would not cause more than an insubstantial risk
that:
34
<PAGE>
(i) the Trust would no longer be classified for United States
federal income tax purposes as a grantor trust; or
(ii) the Trust would become an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the terms of the Securities represented by such Certificate.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of
35
<PAGE>
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests in
such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
36
<PAGE>
SECTION 9.7 Definitive Preferred Security Certificates.
------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such election pursuant to
Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect to
the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to the Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the Clearing Agency. The
Definitive Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
37
<PAGE>
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders, which shall be made
solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
38
<PAGE>
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner that
is, or provide terms that are, fair and reasonable to the Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term
39
<PAGE>
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 10.4 Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a). The indemnification shall survive the termination of this Declaration.
40
<PAGE>
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents which shall reflect, in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders, within 90 days after the
41
<PAGE>
end of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each Holder, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by such Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
-------- -------
respect of the Subordinated Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
-------- -------
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to such
Holder to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the
42
<PAGE>
amount of the withholding to such Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
43
<PAGE>
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) If the Trust has any Securities outstanding, any amendment that
would adversely affect the rights, privileges or preferences of any Holder of
such Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) in the event the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, conform to any change in Rule 3a-7 or written
change in interpretation or application of Rule 3a-7 by any legislative
body, court,
44
<PAGE>
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders;
and
(v) cause the trust to continue to be classified for purposes of
United States federal income taxation as a grantor trust; provided, such
--------
amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security Certificates
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of any
class of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than 60
days before the date of such meeting. Whenever a vote, consent or approval of
Holders is permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of such
Holders. Any action that may be taken at a meeting of Holders may be taken
without a meeting if a consent in writing setting forth the action so taken is
signed by Holders owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to vote thereon were
present
45
<PAGE>
and voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written consent submitted to
Holders for the purpose of taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on all
matters in which such Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Holder executing it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be governed by the
General Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders were stockholders of a Delaware corporation;
(iii) each meeting of Holders shall be conducted by the Regular Trustees
or by such other Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock exchange
on which the Preferred Securities are then listed or trading otherwise provides,
the Regular Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any Holders,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time
46
<PAGE>
of the successor Property Trustee's acceptance of its appointment as Property
Trustee, that:
(a) the Property Trustee is a banking corporation or association
with trust powers, duly organized, validly existing and in good standing under
the laws of a state of the United States or of the United States, with trust
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by
the Property Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good standing under the
laws of the State of Delaware, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the
47
<PAGE>
Declaration. The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration;
and
(d) the Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders):
TCI Communications Financing II
c/o TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice of to
the Holders):
The Bank of New York (Delaware)
400 White Clay Center, Route 273
Newark, Delaware 19711
Attention:
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<PAGE>
(c) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice of to
the Holders):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
49
<PAGE>
SECTION 14.5 Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
50
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Declaration to be
executed as of the day and year first above written.
[ ],
as Regular Trustee
__________________________
[ ],
as Regular Trustee
__________________________
[ ],
as Regular Trustee
__________________________
THE BANK OF NEW YORK
(DELAWARE),
as Delaware Trustee
By: _______________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By: _______________________
Name:
Title:
51
<PAGE>
TCI COMMUNICATIONS, INC.,
as Sponsor
By: _______________________
Name:
Title:
52
<PAGE>
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Further to Section 7.1 of the Declaration of Trust, dated as of
_________ __, 1995 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Preferred Securities. [ ] Preferred Securities of
--------------------
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are hereby
designated for the purposes of identification only as "_____% Trust Originated
Preferred Securities/SM/ ('TOPrS'/SM/)" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. [ ] Common Securities of the
-----------------
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $25 per common security, are hereby
designated for the purposes of identification only as "______% Trust Originated
Common Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
I-1
<PAGE>
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ______% (the "Coupon Rate") of the stated liquidation amount of $25 per
Security, such rate being the rate of interest payable on the Subordinated Notes
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Subordinated Notes held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
March 31, 1996, except as otherwise described below. The Subordinated Note
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Subordinated
Notes for a period not exceeding 20 consecutive quarters (each an "Extension
Period"), provided that no Extension Period shall last beyond the date of
-------- ----
maturity of the Subordinated Notes. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Subordinated Note Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 20 consecutive quarters or last beyond the
date of maturity of the Subordinated Notes. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
on the first record date for the payment of Distributions after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Subordinated Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred
I-2
<PAGE>
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Subordinated Notes. Subject to
any applicable laws and regulations and the provisions of the Declaration, each
such payment in respect of the Preferred Securities will be made as described
under the heading "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus dated _________ __,
1995, (the "Prospectus"), included in the Registration Statement on Form S-3 of
the Sponsor (in its capacity as the Subordinated Note Issuer and the issuer of
the Preferred Securities Guarantee) and the Trust (Reg. No. 33-___). The
relevant record dates for the Common Securities shall be the same record dates
as for the Preferred Securities. If the Preferred Securities shall not continue
to remain in book-entry only form, the relevant record dates for the Preferred
Securities shall conform to the rules of any securities exchange on which such
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Subordinated Notes. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Subordinated Note Issuer having failed to make a payment under the
Subordinated Notes, will cease to be payable to the Person in whose name such
Securities are registered on the relevant regular record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture for the making of such payment. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders on the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive out
of the assets of the Trust available for distribution to Holders after
satisfaction of
I-3
<PAGE>
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $25 per Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Subordinated Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Subordinated Notes in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed at a redemption price of $25 per Security plus an
amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the procedure for redeeming Preferred Securities will be as
described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each as defined
below, and each a "Special Event") shall occur and be continuing the Regular
Trustees shall, except in certain limited circumstances in relation to a Tax
Event described in this Section 4(c), dissolve the Trust and, after satisfaction
of creditors, cause Subordinated Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment, as the Securities, to be distributed to the Holders in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, within
90 days following the occurrence of such Special Event (the "90 Day Period");
provided, however, that, as
- -------- -------
I-4
<PAGE>
a condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
Subordinated Notes, and provided, further, that, if at the time there is
-------- -------
available to the Trust the opportunity to eliminate, within the 90 Day Period,
the Special Event by taking some 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 Trust, the Subordinated Note Issuer, the Sponsor or the
Holders ("Ministerial Action"), the Trust will pursue such Ministerial Action in
lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax Event
Opinion (as defined hereinafter) by the Regular Trustees, the Subordinated Note
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that the Subordinated
Note Issuer would be precluded from deducting the interest on the Subordinated
Notes for United States federal income tax purposes even if the Subordinated
Notes were distributed to the Holders in liquidation of such Holders' interests
in the Trust as described in this Section 4(c), or (ii) in the event of any
Special Event, after receipt of a Tax Event Opinion or Investment Company Event
Opinion (as defined hereinafter), as the case may be, the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, the Subordinated Note Issuer shall have the right at any
time, upon not less than 30 nor more than 60 days notice, to redeem the
Subordinated Notes in whole or in part for cash within 90 days following the
occurrence of such Special Event, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Subordinated Notes so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at the time
-------- -------
there is available to the Trust the opportunity to eliminate, within such 90 day
period, the Special Event by taking some Ministerial Action, the Trust or the
Subordinated Note Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that on or after the date of the
Prospectus, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
I-5
<PAGE>
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of the Prospectus, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or received on
the Subordinated Notes, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable by the Subordinated Note Issuer
to the Trust on the Subordinated Notes is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Subordinated Note
Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is a more than an insubstantial risk that the Trust is
or will be considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of the Prospectus.
On and from the date fixed by the Regular Trustees for any
distribution of Subordinated Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) DTC (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Subordinated Notes to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by the Depository
or its nominee (or any successor Clearing Agency or its nominee), will be deemed
to represent beneficial interests in the Subordinated Notes having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such
certificates are surrendered or presented to the Subordinated Note Issuer or its
agent for transfer or reissue.
I-6
<PAGE>
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Subordinated Notes are distributed to holders of the
Securities, pursuant to the terms of the Indenture the Subordinated Note Issuer
will use its best efforts to have the Subordinated Notes listed on the New York
Stock Exchange or on such other exchange or the Nasdaq National Market as the
Preferred Securities were listed immediately prior to the distribution of the
Subordinated Notes.
(f) The following provisions shall apply to any call for redemption of
Securities or any distribution of Subordinated Notes to Holders:
(i) Notice of any redemption of, or notice of distribution of
Subordinated Notes in exchange for, Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Subordinated Notes.
For purposes of the calculation of the date of redemption or exchange and
the dates on which notices are given pursuant to this Section 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders.
Each Redemption/Distribution Notice shall be addressed to each Holder at the
address of such Holder appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of record
by the Depository or its nominee (or any successor Clearing Agency or its
nominee), the distribution of the proceeds of such redemption will be made
to each Clearing Agency Participant (or Person on whose behalf such Clearing
Agency or nominee holds such securities) in accordance with the procedures
applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Notes are redeemed as set
I-7
<PAGE>
out in this Section 4 (which notice will be irrevocable), then (A) while the
Preferred Securities are in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption date, the
Property Trustee will deposit irrevocably with the Depository or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to the Preferred Securities and will give the
Depository irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities, provided that the Subordinated Note
--------
Issuer has deposited with the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Subordinated Notes
prior to such time, and (B) with respect to Preferred Securities issued in
definitive form and Common Securities, the Property Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date, provided that the Subordinated Note Issuer has
deposited with the Property Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Subordinated Notes, prior to such
mailing. If a Redemption/Distribution Notice shall have been given and funds
deposited with the Property Trustee on or before the redemption date as
required, then immediately prior to the close of business on the redemption date
distributions will cease to accrue on the Securities so called for redemption
and all rights of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption Price. Neither the
Regular Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not paid on the
redemption date either by the Property Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such Securities
will continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
I-8
<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof at their addresses appearing on the books and records of the Trust,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror is
not the Holder of the Common Securities or the obligor under the Indenture,
the Sponsor or any of its subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the open market or
by private agreement.
5. Voting Rights - Preferred Securities.
------------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the Declaration,
including (i) directing the time, method, place of conducting any proceeding for
any remedy available to the Subordinated Note Trustee, or exercising any trust
or power conferred on the Subordinated Note Trustee with respect to the
Subordinated Notes, (ii) waive any past default and its consequences that is
waivable under Section 6.04 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Notes
shall be due and payable, provided, however, that, where a consent under the
-------- -------
Indenture would require the consent or act of the Holders of greater than a
majority in principal amount of Subordinated Notes affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take such action
at the direction of the Holders of at least the proportion in liquidation amount
of the Preferred Securities outstanding which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accor-
I-9
<PAGE>
dance with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel to
the effect that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust on account of such action.
If the Property Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may institute a legal proceeding directly against
any Person to enforce the Property Trustee's rights under the Declaration
without first instituting a legal proceeding against the Property Trustee or any
other Person. If an Event of Default occurs that results from the failure of the
Subordinated Note Issuer to pay principal of or interest on the Subordinated
Notes when due, then during the continuance of such Event of Default each Holder
of Preferred Securities may directly institute proceedings against the
Subordinated Note Issuer to obtain payment to such Holder of an amount equal to
the principal or interest so defaulted on with respect to Subordinated Notes in
a principal amount equal to the liquidation amount of the Preferred Securities
owned by such Holder. No Holder of Preferred Securities will be entitled to
exercise directly against the Subordinated Note Issuer any other remedy
available to the Property Trustee, as the record holder of the Subordinated
Notes, unless the Property Trustee first fails to exercise such remedy.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Notes in accordance with the Declaration and the
terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c) and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
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<PAGE>
(c) Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived, or otherwise eliminated and subject to the requirements of the
penultimate sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Subordinated Note Trustee, or exercising any trust or power conferred on the
Subordinated Note Trustee with respect to the Subordinated Notes, (ii) waive any
past default and its consequences that is waivable under Section 6.04 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Subordinated Notes shall be due and payable, provided
--------
that, where a consent or action under the Indenture would require the consent or
- ----
act of the Holders of a Super Majority, the Property Trustee may only give such
consent or take such action at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Notes outstanding. Notwithstanding any vote pursuant to this
Section 6(c), the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the Declaration, any Holder
of Common Securities may institute a legal proceeding directly against any
Person to enforce the Property Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
I-11
<PAGE>
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Notes in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than under the
circumstances described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as a single
class; provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Subordinated Notes is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Subordinated
Notes, the Property Trustee shall request the direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
-------- -------
the consent of the holders of a Super Majority, the Property Trustee may only
give such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding; provided, further, that the Property Trustee shall not take any
-------- -------
action in accordance with the directions of the Holders of the Securities under
this Section 7(b) unless the Property Trustee
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<PAGE>
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration in respect of the Preferred Securities has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, then to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
-------
The Preferred Securities rank pari passu, and payment thereon shall be
---- -----
made Pro Rata, with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Subordinated
Notes held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
10. Listing.
-------
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
I-13
<PAGE>
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
TCI Communications Financing II
____% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
TCI Communications Financing II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of _______ preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust designated the _____% Trust Originated Preferred Securities.
A1-1
<PAGE>
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of _______, 1996, as the same may be amended from time to
time (the "Declaration") including the designation of the terms of Preferred
Securities as set forth in Annex I to the Declaration. The Preferred Securities
and the Common Securities issued by the Trust pursuant to the Declaration
represent undivided beneficial interests in the assets of the Trust, including
the Subordinated Notes (as defined in the Declaration) issued by TCI
Communications, Inc., a Delaware corporation ("TCIC"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement of TCIC dated as of
_________________, 1996 (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture to
the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
The Holder of this certificate, by accepting this certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Subordinated Notes,
including that the Subordinated Notes are subordinate and junior in right to
payment to all Senior Indebtedness (as defined in the Indenture) as and to the
extent provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is (x) subordinate and junior in right to payment
to all other liabilities of TCIC, including the Subordinated Notes, except those
made pari passu or subordinated by their terms, and (y) pari passu with the most
senior preferred stock now or hereafter issued by TCIC and with any guarantee
now or hereafter entered into by TCIC in respect of any preferred or preference
stock of any affiliate of TCIC.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the regular Trustees of the Trust have executed
this certificate for and on behalf of the Trust.
Dated:
TCI COMMUNICATIONS FINANCING II
By: __________________________ By: _____________________
Regular Trustee
COUNTERSIGNED AND REGISTERED: TRANSFER AGENT AND
REGISTRAR
THE BANK OF NEW YORK
(NEW YORK, NEW YORK)
AUTHORIZED SIGNATURE
A1-2
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common UNIF GIFT ACT __________ Custodian __________
TEN ENT as tenants by the entireties (Cust) (Minor)
JT TEN as joint tenants with right of Under Uniform Gifts to Minors
survivorship and not as tenants Act _______________
in common (State)
Additional abbreviations may also be used though not in the above list.
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Please print or typewrite name(s) and address(es) including postal zip code(s)
of assignee(s)
of the Preferred Securities represented by this Certificate and irrevocably
appoints
_______________________________________________________________________________
_______________________________________________________________________________
___________________________________________________________ attorney to transfer
such Preferred Securities on the books of the Trust. The attorney may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
* IMPORTANT READ CAREFULLY:
The signature(s) to this assignment must correspond with the name(s) as
written upon the face of the certificate in every particular without alteration,
enlargement or change whatsoever. The signature(s) of the person(s) executing
this power must be guaranteed by an eligible guarantor institution which, at the
time of issuing the guarantee, is a member of, or a participant in the medallion
signature guarantee program recognized by the Securities Transfer
Association.
A1-3
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TCI Communications Financing II
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
TCI Communications Financing II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the ______% Trust Originated Common Securities (liquidation amount
$25 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of _______,
1995, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Subordinated Notes as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Subordinated
Notes.
A2-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this __ day of
____________, 199__.
TCI COMMUNICATIONS FINANCING II
By: _________________________
Name:
Title:
A2-2
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's name and social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ________________________________________
_________________________________________________________________
______________________________________________ agent to transfer this Common
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
<PAGE>
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
EXHIBIT 4.11
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
TCI COMMUNICATIONS FINANCING III
Dated as of _______ __, 1996
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions................................................. 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................... 8
SECTION 2.2 Lists of Holders of Securities............................. 8
SECTION 2.3 Reports by the Property Trustee............................ 9
SECTION 2.4 Periodic Reports to Property Trustee....................... 9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................. 9
SECTION 2.6 Events of Default; Waiver.................................. 10
SECTION 2.7 Event of Default; Notice................................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name....................................................... 12
SECTION 3.2 Office..................................................... 12
SECTION 3.3 Purpose.................................................... 12
SECTION 3.4 Authority.................................................. 13
SECTION 3.5 Title to Property of the Trust............................. 13
SECTION 3.6 Powers and Duties of the Regular Trustees.................. 13
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................... 16
SECTION 3.8 Powers and Duties of the Property Trustee.................. 17
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee....................................... 19
SECTION 3.10 Certain Rights of the Property Trustee..................... 21
SECTION 3.11 Delaware Trustee........................................... 23
SECTION 3.12 Execution of Documents..................................... 23
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities.............................................. 24
SECTION 3.14 Duration of Trust.......................................... 24
SECTION 3.15 Mergers.................................................... 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................... 26
SECTION 4.2 Responsibilities of the Sponsor............................ 26
SECTION 4.3 Expenses................................................... 23
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees......................................... 27
i
<PAGE>
Page
----
SECTION 5.2 Delaware Trustee........................................... 28
SECTION 5.3 Property Trustee; Eligibility.............................. 28
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally................................. 29
SECTION 5.5 Initial Trustees........................................... 29
SECTION 5.6 Appointment, Removal and Resignation of
Trustees................................................... 30
SECTION 5.7 Vacancies among Trustees................................... 31
SECTION 5.8 Effect of Vacancies........................................ 31
SECTION 5.9 Meetings................................................... 32
SECTION 5.10 Delegation of Power........................................ 32
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.............................................. 33
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................... 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust....................................... 34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..................................... 35
SECTION 9.2 Transfer of Certificates................................... 35
SECTION 9.3 Deemed Security Holders.................................... 36
SECTION 9.4 Book Entry Interests....................................... 36
SECTION 9.5 Notices to Clearing Agency................................. 37
SECTION 9.6 Appointment of Successor Clearing Agency................... 37
SECTION 9.7 Definitive Preferred Security Certificates................. 37
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.......... 38
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................. 39
SECTION 10.2 Exculpation................................................ 39
SECTION 10.3 Fiduciary Duty............................................. 40
SECTION 10.4 Indemnification............................................ 41
ii
<PAGE>
Page
----
SECTION 10.5 Outside Businesses................................... 41
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.......................................... 42
SECTION 11.2 Certain Accounting Matters........................... 42
SECTION 11.3 Banking.............................................. 43
SECTION 11.4 Withholding.......................................... 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments............................................. 44
SECTION 12.2 Meetings of the Holders; Action by Written Consent..... 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee..... 47
SECTION 13.2 Representations and Warranties of Delaware Trustee..... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices................................................ 49
SECTION 14.2 Governing Law.......................................... 50
SECTION 14.3 Intention of the Parties............................... 50
SECTION 14.4 Headings............................................... 50
SECTION 14.5 Successors and Assigns................................. 50
SECTION 14.6 Partial Enforceability................................. 51
SECTION 14.7 Counterparts........................................... 51
ANNEX I TERMS OF SECURITIES.................................... I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE........................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.................... A2-1
EXHIBIT B SPECIMEN OF SUBORDINATED NOTE.......................... B-1
EXHIBIT C UNDERWRITING AGREEMENT................................. C-1
iii
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a)............................................ 5.3(a)
310(b)............................................ 5.3(c), 5.3(d)
310(c)............................................ Inapplicable
311(a)............................................ 2.2(b)
311(b)............................................ 2.2(b)
311(c)............................................ Inapplicable
312(a)............................................ 2.2(a)
312(b)............................................ 2.2(b)
313............................................... 2.3
314(a)............................................ 2.4
314(b)............................................ Inapplicable
314(c)............................................ 2.5
314(d)............................................ Inapplicable
314(e)............................................ 1.1, 2.5
314(f)............................................ Inapplicable
315(a)............................................ 3.9(b)
315(c)............................................ 3.9(a)
315(d)............................................ 3.9(a)
316(a)............................................ Annex I
316(c)............................................ 3.6(e)
317(a)............................................ 3.8(d)
317(b)............................................ 3.8(h)
_______________
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TCI COMMUNICATIONS FINANCING III
_________ __, ____
DECLARATION OF TRUST ("Declaration"), dated and effective as of
_________ __, ____, by the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial interests
in the Trust to be issued pursuant to this Declaration.
W I T N E S S E T H:
-------------------
WHEREAS, the Trustees and the Sponsor established TCI Communications
Financing III (the "Trust"), as a business trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 21, 1995 (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 21, 1995, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Subordinated Notes of the Subordinated Note Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference in this Declaration to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
------------------
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, a Sunday or any
------------
other day on which banking institutions in New York, New York are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S)3801 et seq., as it may be amended from time to time.
------------ -- ---
2
<PAGE>
"Certificate" means a Common Security Certificate or a Preferred
-----------
Security Certificate.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank or other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means , 1995.
------------ --------------
"Code" means the Internal Revenue Code of 1986 as amended from time to
----
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities Guarantee" means the guarantee agreement, dated as
---------------------------
of , , of the Sponsor in respect of the Common Securities.
------------ ----
"Common Security" has the meaning specified in Section 7.1.
---------------
"Common Security Certificate" means a definitive certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Definitive Preferred Security Certificates" has the meaning set forth
------------------------------------------
in Section 9.4.
"Direction" by a Person means a written direction signed:
---------
(a) if the Person is a natural Person, by that Person; or
3
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities
------------
in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
---
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Subordinated Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Global Certificate" has the meaning set forth in Section 9.4.
------------------
"Holder" means a Person in whose name a Certificate representing a
------
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
------------------
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of , 1995, as amended
--------- -------
and supplemented by a Supplemental Indenture, dated as of ,
------ -----------
, among the Subordinated Note Issuer and the Subordinated Note Trustee, and
- ----
any further indenture supplemental thereto relating to the Subordinated Notes.
"Investment Company" means an investment company (as defined in the
------------------
Investment Company Act) that is required to register as such under the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
------------------------
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided in the terms of the Preferred Securi-
4
<PAGE>
ties and by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
------------------
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
------------
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement, dated
------------------------------
as of , , of the Sponsor in respect of the Preferred Securities.
------ ----
5
<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
------------------
"Preferred Security Beneficial Owner" means, with respect to a Book
-----------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
------------------------------
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement among the Trust, the
-----------------
Subordinated Note Issuer and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Preferred Securities.
"Property Trustee" means the Trustee meeting the eligibility
----------------
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are
------
only two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee
---------------
and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
-------------------
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer in the corporate trust department
of the Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
---------
6
<PAGE>
"Securities" means the Common Securities and the Preferred Securities.
----------
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Securities Guarantees" means the Preferred Securities Guarantee and
---------------------
the Common Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
-------------
"Sponsor" means TCI Communications, Inc., a Delaware corporation, or
-------
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Subordinated Note Issuer" means the Sponsor in its capacity as issuer
------------------------
of the Subordinated Notes.
"Subordinated Note Trustee" means The Bank of New York, as trustee
-------------------------
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Subordinated Notes" means the % Subordinated Deferrable Interest
------------------ --
Notes Due ____ , ____ to be issued by the Subordinated Note Issuer under the
Indenture and held by the Property Trustee. A specimen certificate representing
a Subordinated Note is attached hereto as Exhibit B. The Subordinated Notes
will be subordinate and junior in right of payment to certain other indebtedness
of the Subordinated Note Issuer as set forth in the Indenture.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Securities" means, except as
-------------------------------------------
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated
7
<PAGE>
under the Code by the United States Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended to the date hereof.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that
-------------
8
<PAGE>
neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written request
therefor, a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
of Paying Agent (if acting in such capacity); provided that the Property Trustee
-------------
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after May 15 of each year or at such other time as
required under (S) 313(b) of the Trust Indenture Act, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
9
<PAGE>
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Notes (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities outstanding
that the relevant Super Majority represents of the aggregate principal
amount of the Subordinated Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------------
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as
10
<PAGE>
provided below in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities outstanding that the relevant Super
Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities known to the Property Trustee, unless such defaults have been cured
before the
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giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
-------------
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Subordinated Notes, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) the Property Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have received
written notice or a Responsible Officer charged with the administration of
the Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "TCI Communications Financing III," as such name
may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o TCI
Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado
80111-3000. On ten Business Days written notice to the Holders of the
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to purchase and hold the
Subordinated Notes and the Preferred Securities Guarantee, and (b) except as
otherwise limited herein, to engage in only those other activities neces-
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sary, or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Subordinated
Notes and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
-------- -------
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
-------- -------
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission the registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Preferred Securities;
(iv) execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Preferred Securities under Section
12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities;
(c) to acquire the Subordinated Notes and the Preferred Securities
Guarantee with the proceeds of the sale of the Preferred Securities and the
Common Securities; provided, however, that the Regular Trustees shall cause
-------- -------
legal title to the Subordinated Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Preferred Securities and
the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
-------- ----
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of (S)316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Subordinated Note Issuer of its election to
defer payments of interest on the Subordinated Notes by extending the interest
payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their discretion to
be necessary or desirable in carrying out the activities of the Trust as set out
in this Section 3.6, including, but not limited to:
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(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Subordinated Note Issuer to ensure that the
Subordinated Notes will be treated as indebtedness of the Subordinated Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
-------- ----
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Notes or the Preferred Securities Guarantee, but shall
distribute all such proceeds to Holders of Securities pursuant to the terms
of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Notes;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration, (A) direct the time,
method and place of exercising any trust or power conferred upon the
Subordinated Note Trustee with respect to the Subordinated Notes, (B) waive
any past default that is waivable under Section 6.04 of the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal
of all the Subordinated Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or the
Subordinated Notes where such consent shall be required unless the Trust
shall have received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Subordinated Notes shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Notes shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 5.6.
Such vesting (and cessation as to the resigning Property Trustee) of title shall
be effective whether or not conveyancing documents with regard to the
Subordinated Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Subordinated Notes held by the Property Trustee, deposit such
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funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Notes are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect the distribution
of the Subordinated Notes to Holders of Securities upon the occurrence of
certain special events (as may be defined in the terms of the Securities)
arising from a change in law or a change in legal interpretation or other
specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated Notes under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for
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<PAGE>
the benefit of Holders of the Securities, enforce its rights as holder of the
Subordinated Notes subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Property Trustee at any time and a successor Paying
Agent or additional Paying Agents may be appointed at any time by the Property
Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and the
Property Trustee
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shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee, unless it
shall be proved that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property Trustee
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of any of its duties or in the exercise of any of its rights
or powers, if it shall have reasonable grounds for believing that the repayment
of such funds or liability is not reasonably assured to it under the terms of
this Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Subordinated Notes and the Property
Trustee Account shall be to deal with such property in a similar manner as the
Property Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property Trustee under
this Declaration, the Trust Indenture Act and Rule 3a-7;
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(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the Subordinated
Notes or the payment of any taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Trustee Account maintained
by the Property Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their respective duties
under this Declaration, nor shall the Property Trustee be liable for the default
or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Property Trustee.
--------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any
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filing under tax or securities laws) or any rerecording, refiling or
reregistration thereof;
(v) the Property Trustee may consult with counsel or other experts
of its selection and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of the
Sponsor's or its Affiliates' employees. The Property Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the request
or direction of any Holder, unless such Holder shall have provided to the
Property Trustee adequate security and indemnity, which would satisfy a
reasonable person in the position of the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Property
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to relieve the Property Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders, and the signature of the
Property Trustee or its agents alone
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shall be sufficient and effective to perform any such action and no third
party shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in acting in accordance with such
instructions; and
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities, of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of (S) 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a
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majority of or, if there are only two, any Regular Trustee or, if there is only
one, such Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute
pursuant to Section 3.6; provided that, the registration statement referred to
-------- ----
in Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
-------- ----
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
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and payments upon liquidation, redemption and otherwise;
(ii) the Subordinated Note Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the
Property Trustee as the Holder of the Subordinated Notes;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with an other organization on which
the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of such Holders' interests in the
Preferred Securities as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Preferred Securities Guarantee.
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(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Expenses.
--------
(a) The Sponsor shall be responsible for and shall pay for all debts
and obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees, the 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), duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) The Sponsor will pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements
as may be necessary or desirable in order to give full effect to the provisions
of this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided that, if the Property Trustee does not also act as Delaware Trustee,
- -------- ----
the number of Trustees shall be at least three (3).
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
- -------- ----
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The Delaware Trustee may be an Affiliate of the
Property Trustee.
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published;
and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires a
trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Property Trustee shall possess those
qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
-----------------------------------------------------------------
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Initial Trustees.
----------------
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The initial Regular Trustees shall be:
Bernard W. Schotters
Stephen M. Brett
[___________________________]
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
The initial Property Trustee shall be:
The Bank of New York
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities or by unanimous
written consent.
(b)(i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon
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such delivery or upon such later date as is specified therein; provided,
--------
however, that:
- -------
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor
and the resigning Property Trustee; or
(B) if the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, until the assets of the Trust have
been completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive evi-
30
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dence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
--------
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before such meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence
(whether in person or by telephone) of a Regular Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Regular Trustee
attends a meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including
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any registration statement or amendment thereto filed with the Commission, or
making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Subordinated Note Issuer makes a payment of interest
(including Additional Interest (as defined in the Indenture)), premium and/or
principal on the Subordinated Notes held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities.") The Trust shall not issue
any securities or other interests in respect of the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed
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any of the Certificates shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities may be
listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor; the
filing of a certificate of cancellation with respect to the Trust or the
revocation of the Holder of the Common Securities or the Sponsor's charter
and the expiration of 90 days after the date of revocation without a
reinstatement thereof;
33
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Subordinated Notes in accordance with the
terms thereof shall have been distributed to the Holders of Securities in
exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration and these Securities shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, (x) the Sponsor may only transfer
Common Securities to a Related Party and (y) a Related Party may only transfer
Common Securities to the Sponsor or another Related Party; provided that, any
-------- ----
such transfer is subject to the condition precedent that the transferor obtain
the written opinion of nationally recognized independent counsel experienced in
such matters that such transfer would not cause more than an insubstantial risk
that:
34
<PAGE>
(i) the Trust would no longer be classified for United States
federal income tax purposes as a grantor trust; or
(ii) the Trust would become an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the terms of the Securities represented by such Certificate.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of
35
<PAGE>
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests in
such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
36
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SECTION 9.7 Definitive Preferred Security Certificates.
------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such election pursuant to Section
9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to the Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery of
such instructions and each of them may conclusively rely on and shall be
protected in relying on, said instructions of the Clearing Agency. The
Definitive Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
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<PAGE>
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders, which shall be made solely
from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
38
<PAGE>
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provide terms that are, fair and reasonable to the Trust or any
Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term
39
<PAGE>
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a). The indemnification shall survive the termination of this Declaration.
40
<PAGE>
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents which shall reflect, in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders, within 90 days after the
41
<PAGE>
end of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each Holder, any annual United States federal income tax information
statement, required by the Code, containing such information with regard to the
Securities held by such Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
-------- -------
respect of the Subordinated Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
-------- -------
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to such
Holder to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the
42
<PAGE>
amount of the withholding to such Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
43
<PAGE>
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) If the Trust has any Securities outstanding, any amendment that
would adversely affect the rights, privileges or preferences of any Holder of
such Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) in the event the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, conform to any change in Rule 3a-7 or
written change in interpretation or application of Rule 3a-7 by any
legislative body, court,
44
<PAGE>
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) cause the trust to continue to be classified for purposes of
United States federal income taxation as a grantor trust; provided, such
--------
amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security Certificates
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of any
class of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of Holders is permitted or required under this Declaration or the
rules of any stock exchange on which the Preferred Securities are listed
or admitted for trading, such vote, consent or approval may be given at a
meeting of such Holders. Any action that may be taken at a meeting of
Holders may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by Holders owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present
45
<PAGE>
and voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any written
consent submitted to Holders for the purpose of taking any action without
a meeting shall be returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on
all matters in which such Holder is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. No
proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder, as
if the Trust were a Delaware corporation and the Holders were stockholders
of a Delaware corporation;
(iii) each meeting of Holders shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders, including
notice of the time, place or purpose of any meeting at which any matter is
to be voted on by any Holders, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time
46
<PAGE>
of the successor Property Trustee's acceptance of its appointment as Property
Trustee, that:
(a) the Property Trustee is a banking corporation or association with
trust powers, duly organized, validly existing and in good standing under the
laws of a state of the United States or of the United States, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or federal banking authority is required for the execution,
delivery or performance by the Property Trustee of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the
47
<PAGE>
Declaration. The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the Declaration; and
(d) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders):
TCI Communications Financing III
c/o TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:
(b) agent to transfer this Common
The Bank of New York (Delaware)
400 White Clay Center, Route 273
Newark, Delaware 19711
Attention:
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<PAGE>
(c) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice of to
the Holders):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
49
<PAGE>
SECTION 14.5 Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
50
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Declaration to be
executed as of the day and year first above written.
[ ],
as Regular Trustee
__________________________
[ ],
as Regular Trustee
__________________________
[ ],
as Regular Trustee
__________________________
THE BANK OF NEW YORK
(DELAWARE),
as Delaware Trustee
By: _______________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By: _______________________
Name:
Title:
51
<PAGE>
TCI COMMUNICATIONS, INC.,
as Sponsor
By: _______________________
Name:
Title:
52
<PAGE>
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Further to Section 7.1 of the Declaration of Trust, dated as of
, 1995 (as amended from time to time, the "Declaration"), the
- --------- --
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Preferred Securities. [ ] Preferred Securities of
--------------------
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are hereby
designated for the purposes of identification only as " % Trust Originated
-----
Preferred Securities/SM/ ('TOPrS'/SM/)" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. [ ] Common Securities of the
-----------------
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $25 per common security, are hereby
designated for the purposes of identification only as " % Trust Originated
------
Common Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
I-1
<PAGE>
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of % (the "Coupon Rate") of the stated liquidation amount of $25 per
------
Security, such rate being the rate of interest payable on the Subordinated Notes
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Subordinated Notes held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
March 31, 1996, except as otherwise described below. The Subordinated Note
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Subordinated
Notes for a period not exceeding 20 consecutive quarters (each an "Extension
Period"), provided that no Extension Period shall last beyond the date of
-------- ----
maturity of the Subordinated Notes. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Subordinated Note Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 20 consecutive quarters or last beyond the
date of maturity of the Subordinated Notes. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
on the first record date for the payment of Distributions after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Subordinated Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred
I-2
<PAGE>
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Subordinated Notes. Subject to
any applicable laws and regulations and the provisions of the Declaration, each
such payment in respect of the Preferred Securities will be made as described
under the heading "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus dated ,
--------- --
1995, (the "Prospectus"), included in the Registration Statement on Form S-3 of
the Sponsor (in its capacity as the Subordinated Note Issuer and the issuer of
the Preferred Securities Guarantee) and the Trust (Reg. No. 33- ). The
---
relevant record dates for the Common Securities shall be the same record dates
as for the Preferred Securities. If the Preferred Securities shall not continue
to remain in book-entry only form, the relevant record dates for the Preferred
Securities shall conform to the rules of any securities exchange on which such
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Subordinated Notes. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Subordinated Note Issuer having failed to make a payment under the
Subordinated Notes, will cease to be payable to the Person in whose name such
Securities are registered on the relevant regular record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture for the making of such payment. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders on the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive out
of the assets of the Trust available for distribution to Holders after
satisfaction of
I-3
<PAGE>
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $25 per Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Subordinated Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Subordinated Notes in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed at a redemption price of $25 per Security plus an
amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the procedure for redeeming Preferred Securities will be as
described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each as defined
below, and each a "Special Event") shall occur and be continuing the Regular
Trustees shall, except in certain limited circumstances in relation to a Tax
Event described in this Section 4(c), dissolve the Trust and, after satisfaction
of creditors, cause Subordinated Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment, as the Securities, to be distributed to the Holders in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, within
90 days following the occurrence of such Special Event (the "90 Day Period");
provided, however, that, as
- -------- -------
I-4
<PAGE>
a condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
Subordinated Notes, and provided, further, that, if at the time there is
-------- -------
available to the Trust the opportunity to eliminate, within the 90 Day Period,
the Special Event by taking some 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 Trust, the Subordinated Note Issuer, the Sponsor or the
Holders ("Ministerial Action"), the Trust will pursue such Ministerial Action in
lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax Event
Opinion (as defined hereinafter) by the Regular Trustees, the Subordinated Note
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that the Subordinated
Note Issuer would be precluded from deducting the interest on the Subordinated
Notes for United States federal income tax purposes even if the Subordinated
Notes were distributed to the Holders in liquidation of such Holders' interests
in the Trust as described in this Section 4(c), or (ii) in the event of any
Special Event, after receipt of a Tax Event Opinion or Investment Company Event
Opinion (as defined hereinafter), as the case may be, the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, the Subordinated Note Issuer shall have the right at any
time, upon not less than 30 nor more than 60 days notice, to redeem the
Subordinated Notes in whole or in part for cash within 90 days following the
occurrence of such Special Event, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Subordinated Notes so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at the time
-------- -------
there is available to the Trust the opportunity to eliminate, within such 90 day
period, the Special Event by taking some Ministerial Action, the Trust or the
Subordinated Note Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that on or after the date of the
Prospectus, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
I-5
<PAGE>
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of the Prospectus, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or received on
the Subordinated Notes, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable by the Subordinated Note Issuer
to the Trust on the Subordinated Notes is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Subordinated Note
Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is a more than an insubstantial risk that the Trust is
or will be considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of the Prospectus.
On and from the date fixed by the Regular Trustees for any
distribution of Subordinated Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) DTC (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Subordinated Notes to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by the Depository
or its nominee (or any successor Clearing Agency or its nominee), will be deemed
to represent beneficial interests in the Subordinated Notes having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such
certificates are surrendered or presented to the Subordinated Note Issuer or its
agent for transfer or reissue.
I-6
<PAGE>
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Subordinated Notes are distributed to holders of the
Securities, pursuant to the terms of the Indenture the Subordinated Note Issuer
will use its best efforts to have the Subordinated Notes listed on the New York
Stock Exchange or on such other exchange or the Nasdaq National Market as the
Preferred Securities were listed immediately prior to the distribution of the
Subordinated Notes.
(f) The following provisions shall apply to any call for redemption
of Securities or any distribution of Subordinated Notes to Holders:
(i) Notice of any redemption of, or notice of distribution of
Subordinated Notes in exchange for, Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Subordinated
Notes. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders. Each Redemption/Distribution Notice shall be addressed to each
Holder at the address of such Holder appearing in the books and records of
the Trust. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf such
Clearing Agency or nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Notes are redeemed as set
I-7
<PAGE>
out in this Section 4 (which notice will be irrevocable), then (A) while
the Preferred Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on the redemption
date, the Property Trustee will deposit irrevocably with the Depository or
its nominee (or successor Clearing Agency or its nominee) funds sufficient
to pay the applicable Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities, provided that the Subordinated Note Issuer has deposited with
--------
the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Subordinated Notes prior to such
time, and (B) with respect to Preferred Securities issued in definitive
form and Common Securities, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust on the redemption date, provided that the Subordinated Note Issuer
has deposited with the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Subordinated
Notes, prior to such mailing. If a Redemption/Distribution Notice shall
have been given and funds deposited with the Property Trustee on or before
the redemption date as required, then immediately prior to the close of
business on the redemption date distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer
of any Securities that have been so called for redemption. If any date
fixed for redemption of Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Securities is improperly withheld or
refused and not paid on the redemption date either by the Property Trustee
or by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will continue to accrue from
the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
I-8
<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof at their addresses appearing on the books and records of the Trust,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror
is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
5. Voting Rights - Preferred Securities.
------------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the Declaration,
including (i) directing the time, method, place of conducting any proceeding for
any remedy available to the Subordinated Note Trustee, or exercising any trust
or power conferred on the Subordinated Note Trustee with respect to the
Subordinated Notes, (ii) waive any past default and its consequences that is
waivable under Section 6.04 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Notes
shall be due and payable, provided, however, that, where a consent under the
-------- -------
Indenture would require the consent or act of the Holders of greater than a
majority in principal amount of Subordinated Notes affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take such action
at the direction of the Holders of at least the proportion in liquidation amount
of the Preferred Securities outstanding which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accor-
I-9
<PAGE>
dance with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel to
the effect that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust on account of such action.
If the Property Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may institute a legal proceeding directly against
any Person to enforce the Property Trustee's rights under the Declaration
without first instituting a legal proceeding against the Property Trustee or any
other Person. If an Event of Default occurs that results from the failure of the
Subordinated Note Issuer to pay principal of or interest on the Subordinated
Notes when due, then during the continuance of such Event of Default each Holder
of Preferred Securities may directly institute proceedings against the
Subordinated Note Issuer to obtain payment to such Holder of an amount equal to
the principal or interest so defaulted on with respect to Subordinated Notes in
a principal amount equal to the liquidation amount of the Preferred Securities
owned by such Holder. No Holder of Preferred Securities will be entitled to
exercise directly against the Subordinated Note Issuer any other remedy
available to the Property Trustee, as the record holder of the Subordinated
Notes, unless the Property Trustee first fails to exercise such remedy.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Notes in accordance with the Declaration and the
terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c) and 7 or as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
I-10
<PAGE>
(c) Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived, or otherwise eliminated and subject to the requirements of the
penultimate sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Subordinated Note Trustee, or exercising any trust or power conferred on the
Subordinated Note Trustee with respect to the Subordinated Notes, (ii) waive any
past default and its consequences that is waivable under Section 6.04 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Subordinated Notes shall be due and payable, provided
--------
that, where a consent or action under the Indenture would require the consent or
- ----
act of the Holders of a Super Majority, the Property Trustee may only give such
consent or take such action at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Notes outstanding. Notwithstanding any vote pursuant to this
Section 6(c), the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the Declaration, any Holder
of Common Securities may institute a legal proceeding directly against any
Person to enforce the Property Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
I-11
<PAGE>
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Notes in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than under the
circumstances described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as a single
class; provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the holder of
the Subordinated Notes is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Subordinated
Notes, the Property Trustee shall request the direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
-------- -------
the consent of the holders of a Super Majority, the Property Trustee may only
give such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding; provided, further, that the Property Trustee shall not take any
-------- -------
action in accordance with the directions of the Holders of the Securities under
this Section 7(b) unless the Property Trustee
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<PAGE>
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration in respect of the Preferred Securities has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, then to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
-------
The Preferred Securities rank pari passu, and payment thereon shall
---- -----
be made Pro Rata, with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Subordinated Notes held by the Property Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
-------
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
I-13
<PAGE>
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
TCI Communications Financing III
____% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
TCI Communications Financing III, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of _______ preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust designated the _____% Trust Originated Preferred Securities.
A1-1
<PAGE>
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of _______, 1996, as the same may be amended from time to
time (the "Declaration") including the designation of the terms of Preferred
Securities as set forth in Annex I to the Declaration. The Preferred Securities
and the Common Securities issued by the Trust pursuant to the Declaration
represent undivided beneficial interests in the assets of the Trust, including
the Subordinated Notes (as defined in the Declaration) issued by TCI
Communications, Inc., a Delaware corporation ("TCIC"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement of TCIC dated as of
_________________, 1996 (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture to
the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
The Holder of this certificate, by accepting this certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Subordinated Notes,
including that the Subordinated Notes are subordinate and junior in right to
payment to all Senior Indebtedness (as defined in the Indenture) as and to the
extent provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is (x) subordinate and junior in right to payment
to all other liabilities of TCIC, including the Subordinated Notes, except those
made pari passu or subordinated by their terms, and (y) pari passu with the most
senior preferred stock now or hereafter issued by TCIC and with any guarantee
now or hereafter entered into by TCIC in respect of any preferred or preference
stock of any affiliate of TCIC.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the regular Trustees of the Trust have executed
this certificate for and on behalf of the Trust.
Dated:
TCI COMMUNICATIONS FINANCING III
By: __________________________ By: _____________________
Regular Trustee
COUNTERSIGNED AND REGISTERED: TRANSFER AGENT AND
REGISTRAR
THE BANK OF NEW YORK
(NEW YORK, NEW YORK)
AUTHORIZED SIGNATURE
A1-2
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common UNIF GIFT ACT __________ Custodian __________
TEN ENT as tenants by the entireties (Cust) (Minor)
JT TEN as joint tenants with right of Under Uniform Gifts to Minors
survivorship and not as tenants Act _______________
in common (State)
Additional abbreviations may also be used though not in the above list.
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Please print or typewrite name(s) and address(es) including postal zip code(s)
of assignee(s)
of the Preferred Securities represented by this Certificate and irrevocably
appoints
_______________________________________________________________________________
_______________________________________________________________________________
___________________________________________________________ attorney to transfer
such Preferred Securities on the books of the Trust. The attorney may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
* IMPORTANT READ CAREFULLY:
The signature(s) to this assignment must correspond with the name(s) as
written upon the face of the certificate in every particular without alteration,
enlargement or change whatsoever. The signature(s) of the person(s) executing
this power must be guaranteed by an eligible guarantor institution which, at the
time of issuing the guarantee, is a member of, or a participant in the medallion
signature guarantee program recognized by the Securities Transfer
Association.
A1-3
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TCI Communications Financing III
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
TCI Communications Financing III, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the ______% Trust Originated Common Securities (liquidation amount
$25 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of _______,
1995, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Subordinated Notes as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Subordinated
Notes.
A2-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this day of
--
, 199 .
- ------------ --
TCI COMMUNICATIONS FINANCING III
By:
-----------------------------
Name:
Title:
A2-2
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's name and social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common
- ------------------------------------------------
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date:
-----------------------
Signature:
-------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
<PAGE>
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
Exhibit 4.12
====================================
AMENDED AND RESTATED DECLARATION
OF TRUST
TCI COMMUNICATIONS FINANCING IV
Dated as of _______ __, 1996
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions................................................ 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................... 8
SECTION 2.2 Lists of Holders of Securities............................. 8
SECTION 2.3 Reports by the Property Trustee............................ 9
SECTION 2.4 Periodic Reports to Property Trustee....................... 9
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................. 9
SECTION 2.6 Events of Default; Waiver.................................. 10
SECTION 2.7 Event of Default; Notice................................... 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name....................................................... 12
SECTION 3.2 Office..................................................... 12
SECTION 3.3 Purpose.................................................... 12
SECTION 3.4 Authority.................................................. 13
SECTION 3.5 Title to Property of the Trust............................. 13
SECTION 3.6 Powers and Duties of the Regular Trustees.................. 13
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees............................................... 16
SECTION 3.8 Powers and Duties of the Property Trustee.................. 17
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee....................................... 19
SECTION 3.10 Certain Rights of the Property Trustee..................... 21
SECTION 3.11 Delaware Trustee........................................... 23
SECTION 3.12 Execution of Documents..................................... 23
SECTION 3.13 Not Responsible for Recitals or Issuance
of Securities.............................................. 24
SECTION 3.14 Duration of Trust.......................................... 24
SECTION 3.15 Mergers.................................................... 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.................... 26
SECTION 4.2 Responsibilities of the Sponsor............................ 26
SECTION 4.3 Expenses................................................... 27
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees......................................... 27
i
<PAGE>
Page
----
SECTION 5.2 Delaware Trustee........................................... 28
SECTION 5.3 Property Trustee; Eligibility.............................. 28
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally................................. 29
SECTION 5.5 Initial Trustees........................................... 29
SECTION 5.6 Appointment, Removal and Resignation of
Trustees................................................... 30
SECTION 5.7 Vacancies among Trustees................................... 31
SECTION 5.8 Effect of Vacancies........................................ 31
SECTION 5.9 Meetings................................................... 32
SECTION 5.10 Delegation of Power........................................ 32
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.............................................. 33
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.................... 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust....................................... 34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities..................................... 35
SECTION 9.2 Transfer of Certificates................................... 35
SECTION 9.3 Deemed Security Holders.................................... 36
SECTION 9.4 Book Entry Interests....................................... 36
SECTION 9.5 Notices to Clearing Agency................................. 37
SECTION 9.6 Appointment of Successor Clearing Agency................... 37
SECTION 9.7 Definitive Preferred Security Certificates................. 37
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.......... 38
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................. 39
SECTION 10.2 Exculpation................................................ 39
SECTION 10.3 Fiduciary Duty............................................. 40
SECTION 10.4 Indemnification............................................ 41
ii
<PAGE>
Page
----
SECTION 10.5 Outside Businesses......................................... 41
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year................................................ 42
SECTION 11.2 Certain Accounting Matters................................. 42
SECTION 11.3 Banking.................................................... 43
SECTION 11.4 Withholding................................................ 43
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments................................................. 44
SECTION 12.2 Meetings of the Holders; Action by Written Consent......... 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee......... 47
SECTION 13.2 Representations and Warranties of Delaware Trustee......... 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.................................................... 49
SECTION 14.2 Governing Law.............................................. 50
SECTION 14.3 Intention of the Parties................................... 50
SECTION 14.4 Headings................................................... 50
SECTION 14.5 Successors and Assigns..................................... 50
SECTION 14.6 Partial Enforceability..................................... 51
SECTION 14.7 Counterparts............................................... 51
ANNEX I TERMS OF SECURITIES........................................ I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE.............................................. A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE........................ A2-1
EXHIBIT B SPECIMEN OF SUBORDINATED NOTE.............................. B-1
EXHIBIT C UNDERWRITING AGREEMENT..................................... C-1
iii
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(a)........................................... 5.3(a)
310(b)........................................... 5.3(c), 5.3(d)
310(c)........................................... Inapplicable
311(a)........................................... 2.2(b)
311(b)........................................... 2.2(b)
311(c)........................................... Inapplicable
312(a)........................................... 2.2(a)
312(b)........................................... 2.2(b)
313.............................................. 2.3
314(a)........................................... 2.4
314(b)........................................... Inapplicable
314(c)........................................... 2.5
314(d)........................................... Inapplicable
314(e)........................................... 1.1, 2.5
314(f)........................................... Inapplicable
315(a)........................................... 3.9(b)
315(c)........................................... 3.9(a)
315(d)........................................... 3.9(a)
316(a)........................................... Annex I
316(c)........................................... 3.6(e)
317(a)........................................... 3.8(d)
317(b)........................................... 3.8(h)
</TABLE>
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
iv
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TCI COMMUNICATIONS FINANCING IV
_________ __, ____
DECLARATION OF TRUST ("Declaration"), dated and effective as of
_________ __, ____, by the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial interests
in the Trust to be issued pursuant to this Declaration.
W I T N E S S E T H:
-------------------
WHEREAS, the Trustees and the Sponsor established TCI Communications
Financing IV (the "Trust"), as a business trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 21, 1995 (the
"Original Declaration") and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 21, 1995, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Subordinated Notes of the Subordinated Note Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
-----------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference in this Declaration to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
------------------
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, a Sunday or any
------------
other day on which banking institutions in New York, New York are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S)3801 et seq., as it may be amended from time to time.
------------ -- ---
2
<PAGE>
"Certificate" means a Common Security Certificate or a Preferred
-----------
Security Certificate.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank or other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means ______________, 1995.
------------
"Code" means the Internal Revenue Code of 1986 as amended from time to
----
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities Guarantee" means the guarantee agreement, dated as
---------------------------
of ____________, ____, of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
---------------
"Common Security Certificate" means a definitive certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Definitive Preferred Security Certificates" has the meaning set forth
------------------------------------------
in Section 9.4.
"Direction" by a Person means a written direction signed:
---------
(a) if the Person is a natural Person, by that Person; or
3
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities
------------
in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing Agency.
---
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Subordinated Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Global Certificate" has the meaning set forth in Section 9.4.
------------------
"Holder" means a Person in whose name a Certificate representing a
------
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
------------------
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of _______, 1995, as amended
---------
and supplemented by a ______ Supplemental Indenture, dated as of ___________,
____, among the Subordinated Note Issuer and the Subordinated Note Trustee, and
any further indenture supplemental thereto relating to the Subordinated Notes.
"Investment Company" means an investment company (as defined in the
------------------
Investment Company Act) that is required to register as such under the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I
------------------------
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided in the terms of the Preferred Securi-
4
<PAGE>
ties and by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
------------------
Securities as set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
------------
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement, dated
------------------------------
as of ______, ____, of the Sponsor in respect of the Preferred Securities.
5
<PAGE>
"Preferred Security" has the meaning specified in Section 7.1.
------------------
"Preferred Security Beneficial Owner" means, with respect to a Book
-----------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a certificate representing a
------------------------------
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement among the Trust, the
-----------------
Subordinated Note Issuer and the underwriters designated by the Regular Trustees
with respect to the offer and sale of the Preferred Securities.
"Property Trustee" means the Trustee meeting the eligibility
----------------
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c).
"Quorum" means a majority of the Regular Trustees or, if there are
------
only two Regular Trustees, both of them.
"Regular Trustee" means any Trustee other than the Property Trustee
---------------
and the Delaware Trustee.
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
-------------------
vice president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer in the corporate trust department
of the Property Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
---------
6
<PAGE>
"Securities" means the Common Securities and the Preferred Securities.
----------
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, or any successor legislation.
"Securities Guarantees" means the Preferred Securities Guarantee and
---------------------
the Common Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
-------------
"Sponsor" means TCI Communications, Inc., a Delaware corporation, or
-------
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Subordinated Note Issuer" means the Sponsor in its capacity as issuer
------------------------
of the Subordinated Notes.
"Subordinated Note Trustee" means The Bank of New York, as trustee
-------------------------
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Subordinated Notes" means the __% Subordinated Deferrable Interest
------------------
Notes Due ____, ____ to be issued by the Subordinated Note Issuer under the
Indenture and held by the Property Trustee. A specimen certificate representing
a Subordinated Note is attached hereto as Exhibit B. The Subordinated Notes
will be subordinate and junior in right of payment to certain other indebtedness
of the Subordinated Note Issuer as set forth in the Indenture.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Tax Event" has the meaning set forth in Annex I hereto.
---------
"10% in liquidation amount of the Securities" means, except as
-------------------------------------------
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated
7
<PAGE>
under the Code by the United States Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended to the date hereof.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a Trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that
-------------
8
<PAGE>
neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written request
therefor, a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
of Paying Agent (if acting in such capacity); provided that the Property Trustee
-------------
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
Within 60 days after May 15 of each year or at such other time as
required under (S) 313(b) of the Trust Indenture Act, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by (S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by (S) 314 (if any) and the compliance certificate required by (S) 314
of the Trust Indenture Act in the form, in the manner and at the times required
by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) may be given in the form of an Officers' Certificate.
9
<PAGE>
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Notes (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities outstanding
that the relevant Super Majority represents of the aggregate principal
amount of the Subordinated Notes outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------------
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as
10
<PAGE>
provided below in this Section 2.6(b), the Event of Default under the
Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities outstanding that the relevant Super
Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities known to the Property Trustee, unless such defaults have been cured
before the
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giving of such notice (the term "defaults" for the purposes of this Section
2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
-------------
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Subordinated Notes, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) the Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a) and 6.01(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or a Responsible Officer charged with the administration of
the Declaration shall have obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "TCI Communications Financing IV," as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of the Securities. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o TCI
Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado
80111-3000. On ten Business Days written notice to the Holders of the
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to purchase and hold the
Subordinated Notes and the Preferred Securities Guarantee, and (b) except as
otherwise limited herein, to engage in only those other activities neces-
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sary, or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Subordinated
Notes and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
-----------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
-------- -------
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
-------- -------
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
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(i) execute and file with the Commission the registration statement on
Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State in which
the Sponsor has determined to qualify or register such Preferred Securities
for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Preferred Securities;
(iv) execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Preferred Securities under Section
12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities;
(c) to acquire the Subordinated Notes and the Preferred Securities
Guarantee with the proceeds of the sale of the Preferred Securities and the
Common Securities; provided, however, that the Regular Trustees shall cause
-------- -------
legal title to the Subordinated Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Preferred Securities and
the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
-------- ----
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of (S)316(c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
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(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Subordinated Note Issuer of its election to defer
payments of interest on the Subordinated Notes by extending the interest payment
period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
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(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Subordinated Note Issuer to ensure that the
Subordinated Notes will be treated as indebtedness of the Subordinated Note
Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
-------- ----
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Notes or the Preferred Securities Guarantee, but shall
distribute all such proceeds to Holders of Securities pursuant to the terms
of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Notes;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration, (A) direct the time,
method and place of exercising any trust or power conferred upon the
Subordinated Note Trustee with respect to the Subordinated Notes, (B) waive
any past default that is waivable under Section 6.04 of the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal
of all the Subordinated Notes shall be due and payable, or (D) consent to
any amendment, modification or termination of the Indenture or the
Subordinated Notes where such consent shall be required unless the Trust
shall have received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial risk that for United
States federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Subordinated Notes shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Notes shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 5.6.
Such vesting (and cessation as to the resigning Property Trustee) of title shall
be effective whether or not conveyancing documents with regard to the
Subordinated Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Notes to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Subordinated Notes held by the Property Trustee, deposit such
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funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and Holders of the Common Securities from the
Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Preferred Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Notes are redeemed or
mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect the distribution
of the Subordinated Notes to Holders of Securities upon the occurrence of
certain special events (as may be defined in the terms of the Securities)
arising from a change in law or a change in legal interpretation or other
specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Subordinated Notes under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for
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<PAGE>
the benefit of Holders of the Securities, enforce its rights as holder of the
Subordinated Notes subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), the Property Trustee
shall exercise such of the rights and powers vested in it by this Declaration,
and use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be
construed to relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration and
the Property Trustee
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shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Subordinated Notes and the
Property Trustee Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Declaration, the Trust Indenture Act and
Rule 3a-7;
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(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Subordinated Notes or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
the default or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of the Property Trustee.
--------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any
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filing under tax or securities laws) or any rerecording, refiling or
reregistration thereof;
(v) the Property Trustee may consult with counsel or other experts of
its selection and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of the
Sponsor's or its Affiliates' employees. The Property Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have provided to the
Property Trustee adequate security and indemnity, which would satisfy a
reasonable person in the position of the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Property
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to relieve the Property Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders, and the signature of the Property
Trustee or its agents alone
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shall be sufficient and effective to perform any such action and no third
party shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in acting in accordance with such
instructions; and
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities, of
the Regular Trustees or the Property Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of (S) 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, a
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majority of or, if there are only two, any Regular Trustee or, if there is only
one, such Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute
pursuant to Section 3.6; provided that, the registration statement referred to
-------- ----
in Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have existence for fifty-five (55) years from the Closing
Date.
SECTION 3.15 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State; provided that:
-------- ----
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
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and payments upon liquidation, redemption and otherwise;
(ii) the Subordinated Note Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the
Property Trustee as the Holder of the Subordinated Notes;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of issuance,
on any national securities exchange or with an other organization on which
the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of such Holders' interests in the
Preferred Securities as a result of such merger, consolidation,
amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Preferred Securities Guarantee.
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(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount equal to 3% of the capital of the
Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing upon notice of issuance of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
26
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Expenses.
--------
(a) The Sponsor shall be responsible for and shall pay for all debts
and obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance and sale of the
Preferred Securities, the fees and expenses (including reasonable counsel fees
and expenses) of the Trustees, the 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), duplication, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) The Sponsor will pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be for the
benefit of, and shall be enforceable by, the Property Trustee and any Person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice hereof. The
Property Trustee and any such Creditor may enforce the Sponsor's obligations
under this Section 4.3 directly against the Sponsor and the Sponsor irrevocably
waives any right or remedy to require that the Property Trustee or any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements
as may be necessary or desirable in order to give full effect to the provisions
of this Section 4.3.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
------------------
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities,
provided that, if the Property Trustee does not also act as Delaware
- -------- ----
Trustee, the number of Trustees shall be at least three (3).
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
- -------- ----
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The Delaware Trustee may be an Affiliate of the
Property Trustee.
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
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(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published;
and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires a
trustee having certain qualifications to hold title to the "eligible
assets" of the Trust, the Property Trustee shall possess those
qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S) 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally.
-----------------------------------------------------------------
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Initial Trustees.
----------------
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The initial Regular Trustees shall be:
Bernard W. Schotters
Stephen M. Brett
[___________________________]
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
The initial Property Trustee shall be:
The Bank of New York
SECTION 5.6 Appointment, Removal and Resignation of
---------------------------------------
Trustees.
--------
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities or by unanimous
written consent.
(b)(i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such successor Property Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.6(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon
29
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such delivery or upon such later date as is specified therein; provided,
--------
however, that:
- -------
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) if the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the
holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive evi-
30
<PAGE>
dence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
--------
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before such meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence
(whether in person or by telephone) of a Regular Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Regular Trustee
attends a meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the Regular
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
-------------------
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including
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<PAGE>
any registration statement or amendment thereto filed with the Commission, or
making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and to
the extent that the Subordinated Note Issuer makes a payment of interest
(including Additional Interest (as defined in the Indenture)), premium and/or
principal on the Subordinated Notes held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities.") The Trust shall not issue
any securities or other interests in respect of the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed
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any of the Certificates shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Securities may be
listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor; the
filing of a certificate of cancellation with respect to the Trust or the
revocation of the Holder of the Common Securities or the Sponsor's charter
and the expiration of 90 days after the date of revocation without a
reinstatement thereof;
33
<PAGE>
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and all of the Subordinated Notes in accordance with the
terms thereof shall have been distributed to the Holders of Securities in
exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the consent of all of
the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the Securities. Any transfer or purported transfer of any Security not made in
accordance with this Declaration and these Securities shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, (x) the Sponsor may only transfer
Common Securities to a Related Party and (y) a Related Party may only transfer
Common Securities to the Sponsor or another Related Party; provided that, any
-------- ----
such transfer is subject to the condition precedent that the transferor obtain
the written opinion of nationally recognized independent counsel experienced in
such matters that such transfer would not cause more than an insubstantial risk
that:
34
<PAGE>
(i) the Trust would no longer be classified for United States federal
income tax purposes as a grantor trust; or
(ii) the Trust would become an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2 Transfer of Certificates.
------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the terms of the Securities represented by such Certificate.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of
35
<PAGE>
the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred
Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Beneficial Owner's interests in
such Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. The
Clearing Agency will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations to
the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
36
<PAGE>
SECTION 9.7 Definitive Preferred Security Certificates.
------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such election pursuant to Section
9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to the Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery of
such instructions and each of them may conclusively rely on and shall be
protected in relying on, said instructions of the Clearing Agency. The
Definitive Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificate should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
37
<PAGE>
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders, which shall be made
solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of
38
<PAGE>
the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence (or,
in the case of the Property Trustee, negligence) or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provide terms that are, fair and reasonable to the Trust or any
Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term
39
<PAGE>
so made, taken or provided by the Indemnified Person shall not constitute a
breach of this Declaration or any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.4(a). The indemnification shall survive the termination of this Declaration.
40
<PAGE>
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents which shall reflect, in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders, within 90 days after the
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<PAGE>
end of each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each Holder, any annual United States federal income tax information
statement, required by the Code, containing such information with regard to the
Securities held by such Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
-------- -------
respect of the Subordinated Notes held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
-------- -------
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to such
Holder to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the
42
<PAGE>
amount of the withholding to such Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from
actual Distributions made, the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two Regular
Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
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<PAGE>
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) If the Trust has any Securities outstanding, any amendment that
would adversely affect the rights, privileges or preferences of any Holder of
such Securities may be effected only with such additional requirements as may be
set forth in the terms of such Securities.
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) in the event the Trust is deemed not to be an Investment Company
solely by reason of Rule 3a-7, conform to any change in Rule 3a-7 or
written change in interpretation or application of Rule 3a-7 by any
legislative body, court,
44
<PAGE>
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders; and
(v) cause the trust to continue to be classified for purposes of
United States federal income taxation as a grantor trust; provided, such
--------
amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call
a meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security Certificates
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of any
class of Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of Holders is permitted or required under this Declaration or the
rules of any stock exchange on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of such Holders. Any action that may be taken at a meeting of
Holders may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by Holders owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present
45
<PAGE>
and voting. Prompt notice of the taking of action without a meeting shall
be given to the Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that any written
consent submitted to Holders for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on
all matters in which such Holder is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. No
proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder, as
if the Trust were a Delaware corporation and the Holders were stockholders
of a Delaware corporation;
(iii) each meeting of Holders shall be conducted by the Regular
Trustees or by such other Person that the Regular Trustees may designate;
and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders, including
notice of the time, place or purpose of any meeting at which any matter is
to be voted on by any Holders, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time
46
<PAGE>
of the successor Property Trustee's acceptance of its appointment as Property
Trustee, that:
(a) the Property Trustee is a banking corporation or association with
trust powers, duly organized, validly existing and in good standing under the
laws of a state of the United States or of the United States, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or federal banking authority is required for the execution,
delivery or performance by the Property Trustee of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a) the Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, the
Declaration;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the
47
<PAGE>
Declaration. The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of the Declaration; and
(d) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders):
TCI Communications Financing IV
c/o TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Holders):
The Bank of New York (Delaware)
400 White Clay Center, Route 273
Newark, Delaware 19711
Attention:
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<PAGE>
(c) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
49
<PAGE>
SECTION 14.5 Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
50
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Declaration to be
executed as of the day and year first above written.
[ ],
as Regular Trustee
--------------------------
[ ],
as Regular Trustee
--------------------------
[ ],
as Regular Trustee
--------------------------
THE BANK OF NEW YORK
(DELAWARE),
as Delaware Trustee
By: _______________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By: _______________________
Name:
Title:
51
<PAGE>
TCI COMMUNICATIONS, INC.,
as Sponsor
By: _______________________
Name:
Title:
52
<PAGE>
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Further to Section 7.1 of the Declaration of Trust, dated as of
_________ __, 1995 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Prospectus referred to below):
1. Designation and Number.
----------------------
(a) Preferred Securities. [ ] Preferred Securities of
--------------------
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount with
respect to the assets of the Trust of $25 per preferred security, are hereby
designated for the purposes of identification only as "_____% Trust Originated
Preferred Securities/SM/ ('TOPrS'/SM/)" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice or to conform to the rules of any stock exchange on
which the Preferred Securities are listed.
(b) Common Securities. [ ] Common Securities of the
-----------------
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $25 per common security, are hereby
designated for the purposes of identification only as "______% Trust Originated
Common Securities" (the "Common Securities"). The Common Security Certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
I-1
<PAGE>
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate per
annum of ______% (the "Coupon Rate") of the stated liquidation amount of $25 per
Security, such rate being the rate of interest payable on the Subordinated Notes
to be held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Subordinated Notes held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from the date of original issuance, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
March 31, 1996, except as otherwise described below. The Subordinated Note
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Subordinated
Notes for a period not exceeding 20 consecutive quarters (each an "Extension
Period"), provided that no Extension Period shall last beyond the date of
-------- ----
maturity of the Subordinated Notes. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Subordinated Note Issuer may further extend such Extension Period; provided
--------
that such Extension Period together with all such previous and further
- ----
extensions thereof may not exceed 20 consecutive quarters or last beyond the
date of maturity of the Subordinated Notes. Payments of accrued Distributions
will be payable to Holders as they appear on the books and records of the Trust
on the first record date for the payment of Distributions after the end of the
Extension Period. Upon the termination of any Extension Period and the payment
of all amounts then due, the Subordinated Note Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred
I-2
<PAGE>
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Subordinated Notes. Subject to
any applicable laws and regulations and the provisions of the Declaration, each
such payment in respect of the Preferred Securities will be made as described
under the heading "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus dated _________ __,
1995, (the "Prospectus"), included in the Registration Statement on Form S-3 of
the Sponsor (in its capacity as the Subordinated Note Issuer and the issuer of
the Preferred Securities Guarantee) and the Trust (Reg. No. 33-___). The
relevant record dates for the Common Securities shall be the same record dates
as for the Preferred Securities. If the Preferred Securities shall not continue
to remain in book-entry only form, the relevant record dates for the Preferred
Securities shall conform to the rules of any securities exchange on which such
securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
before the relevant payment dates, which payment dates correspond to the
interest payment dates on the Subordinated Notes. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Subordinated Note Issuer having failed to make a payment under the
Subordinated Notes, will cease to be payable to the Person in whose name such
Securities are registered on the relevant regular record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture for the making of such payment. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders on the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive out
of the assets of the Trust available for distribution to Holders after
satisfaction of
I-3
<PAGE>
liabilities of creditors an amount equal to the aggregate of the stated
liquidation amount of $25 per Security plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, Subordinated Notes in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Subordinated Notes in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed at a redemption price of $25 per Security plus an
amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the procedure for redeeming Preferred Securities will be as
described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each as defined
below, and each a "Special Event") shall occur and be continuing the Regular
Trustees shall, except in certain limited circumstances in relation to a Tax
Event described in this Section 4(c), dissolve the Trust and, after satisfaction
of creditors, cause Subordinated Notes held by the Property Trustee, having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on, and having the same
record date for payment, as the Securities, to be distributed to the Holders in
liquidation of such Holders' interests in the Trust on a Pro Rata basis, within
90 days following the occurrence of such Special Event (the "90 Day Period");
provided, however, that, as
- -------- -------
I-4
<PAGE>
a condition of such dissolution and distribution, the Regular Trustees shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
Subordinated Notes, and provided, further, that, if at the time there is
-------- -------
available to the Trust the opportunity to eliminate, within the 90 Day Period,
the Special Event by taking some 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 Trust, the Subordinated Note Issuer, the Sponsor or the
Holders ("Ministerial Action"), the Trust will pursue such Ministerial Action in
lieu of dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax Event
Opinion (as defined hereinafter) by the Regular Trustees, the Subordinated Note
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that the Subordinated
Note Issuer would be precluded from deducting the interest on the Subordinated
Notes for United States federal income tax purposes even if the Subordinated
Notes were distributed to the Holders in liquidation of such Holders' interests
in the Trust as described in this Section 4(c), or (ii) in the event of any
Special Event, after receipt of a Tax Event Opinion or Investment Company Event
Opinion (as defined hereinafter), as the case may be, the Regular Trustees shall
have been informed by such tax counsel that a No Recognition Opinion cannot be
delivered to the Trust, the Subordinated Note Issuer shall have the right at any
time, upon not less than 30 nor more than 60 days notice, to redeem the
Subordinated Notes in whole or in part for cash within 90 days following the
occurrence of such Special Event, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Subordinated Notes so redeemed shall be redeemed by the Trust at the
Redemption Price on a Pro Rata basis; provided, however, that, if at the time
-------- -------
there is available to the Trust the opportunity to eliminate, within such 90 day
period, the Special Event by taking some Ministerial Action, the Trust or the
Subordinated Note Issuer will pursue such Ministerial Action in lieu of
redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "Tax Event Opinion") to the effect that on or after the date of the
Prospectus, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations
I-5
<PAGE>
thereunder) of the United States or any political subdivision or taxing
authority therefor or therein, or (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of the Prospectus, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to interest accrued or received on
the Subordinated Notes, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable by the Subordinated Note Issuer
to the Trust on the Subordinated Notes is not, or within 90 days of the date
thereof will not be, deductible, in whole or in part, by the Subordinated Note
Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel experienced
in practice under the Investment Company Act (an "Investment Company Event
Opinion") that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is a more than an insubstantial risk that the Trust is
or will be considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of the Prospectus.
On and from the date fixed by the Regular Trustees for any
distribution of Subordinated Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding and (ii) DTC (the
"Depository") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Subordinated Notes to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by the Depository
or its nominee (or any successor Clearing Agency or its nominee), will be deemed
to represent beneficial interests in the Subordinated Notes having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities until such
certificates are surrendered or presented to the Subordinated Note Issuer or its
agent for transfer or reissue.
I-6
<PAGE>
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Subordinated Notes are distributed to holders of the
Securities, pursuant to the terms of the Indenture the Subordinated Note Issuer
will use its best efforts to have the Subordinated Notes listed on the New York
Stock Exchange or on such other exchange or the Nasdaq National Market as the
Preferred Securities were listed immediately prior to the distribution of the
Subordinated Notes.
(f) The following provisions shall apply to any call for redemption of
Securities or any distribution of Subordinated Notes to Holders:
(i) Notice of any redemption of, or notice of distribution of
Subordinated Notes in exchange for, Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Subordinated
Notes. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given on
the day such notice is first mailed by first-class mail, postage prepaid,
to Holders. Each Redemption/Distribution Notice shall be addressed to each
Holder at the address of such Holder appearing in the books and records of
the Trust. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata
from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the name of and held of
record by the Depository or its nominee (or any successor Clearing Agency
or its nominee), the distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or Person on whose behalf such
Clearing Agency or nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Notes are redeemed as set
I-7
<PAGE>
out in this Section 4 (which notice will be irrevocable), then (A) while
the Preferred Securities are in book-entry only form, with respect to the
Preferred Securities, by 12:00 noon, New York City time, on the redemption
date, the Property Trustee will deposit irrevocably with the Depository or
its nominee (or successor Clearing Agency or its nominee) funds sufficient
to pay the applicable Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities, provided that the Subordinated Note Issuer has deposited with
--------
the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Subordinated Notes prior to such
time, and (B) with respect to Preferred Securities issued in definitive
form and Common Securities, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust on the redemption date, provided that the Subordinated Note Issuer
has deposited with the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Subordinated
Notes, prior to such mailing. If a Redemption/Distribution Notice shall
have been given and funds deposited with the Property Trustee on or before
the redemption date as required, then immediately prior to the close of
business on the redemption date distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer
of any Securities that have been so called for redemption. If any date
fixed for redemption of Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Securities is improperly withheld or
refused and not paid on the redemption date either by the Property Trustee
or by the Sponsor as guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will continue to accrue from
the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
I-8
<PAGE>
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof at their addresses appearing on the books and records of the Trust,
and (B) in respect of the Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror
is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
5. Voting Rights - Preferred Securities.
------------------------------------
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under the Declaration,
including (i) directing the time, method, place of conducting any proceeding for
any remedy available to the Subordinated Note Trustee, or exercising any trust
or power conferred on the Subordinated Note Trustee with respect to the
Subordinated Notes, (ii) waive any past default and its consequences that is
waivable under Section 6.04 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Notes
shall be due and payable, provided, however, that, where a consent under the
-------- -------
Indenture would require the consent or act of the Holders of greater than a
majority in principal amount of Subordinated Notes affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or take such action
at the direction of the Holders of at least the proportion in liquidation amount
of the Preferred Securities outstanding which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accor-
I-9
<PAGE>
dance with the directions of the Holders of the Preferred Securities under this
paragraph unless the Property Trustee has obtained an opinion of tax counsel to
the effect that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust on account of such action.
If the Property Trustee fails to enforce its rights under the Declaration, any
Holder of Preferred Securities may institute a legal proceeding directly against
any Person to enforce the Property Trustee's rights under the Declaration
without first instituting a legal proceeding against the Property Trustee or any
other Person. If an Event of Default occurs that results from the failure of the
Subordinated Note Issuer to pay principal of or interest on the Subordinated
Notes when due, then during the continuance of such Event of Default each Holder
of Preferred Securities may directly institute proceedings against the
Subordinated Note Issuer to obtain payment to such Holder of an amount equal to
the principal or interest so defaulted on with respect to Subordinated Notes in
a principal amount equal to the liquidation amount of the Preferred Securities
owned by such Holder. No Holder of Preferred Securities will be entitled to
exercise directly against the Subordinated Note Issuer any other remedy
available to the Property Trustee, as the record holder of the Subordinated
Notes, unless the Property Trustee first fails to exercise such remedy.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Notes in accordance with the Declaration and the
terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), (c) and 7 or as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
I-10
<PAGE>
(c) Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived, or otherwise eliminated and subject to the requirements of the
penultimate sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Common Securities, voting separately as a class, may direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Subordinated Note Trustee, or exercising any trust or power conferred on the
Subordinated Note Trustee with respect to the Subordinated Notes, (ii) waive any
past default and its consequences that is waivable under Section 6.04 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Subordinated Notes shall be due and payable, provided
--------
that, where a consent or action under the Indenture would require the consent or
- ----
act of the Holders of a Super Majority, the Property Trustee may only give such
consent or take such action at the direction of the Holders of at least the
proportion in liquidation amount of the Common Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Notes outstanding. Notwithstanding any vote pursuant to this
Section 6(c), the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Subordinated Note Trustee as
set forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Property Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Property Trustee fails to enforce its rights under the Declaration, any Holder
of Common Securities may institute a legal proceeding directly against any
Person to enforce the Property Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
I-11
<PAGE>
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Notes in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than under the
circumstances described in Section 8.1 of the Declaration, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least a
Majority in liquidation amount of the Securities, voting together as a single
class; provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the holder of
the Subordinated Notes is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Subordinated
Notes, the Property Trustee shall request the direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
-------- -------
the consent of the holders of a Super Majority, the Property Trustee may only
give such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding; provided, further, that the Property Trustee shall not take any
-------- -------
action in accordance with the directions of the Holders of the Securities under
this Section 7(b) unless the Property Trustee
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<PAGE>
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as other than
a grantor trust on account of such action.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration in respect of the Preferred Securities has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, then to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
-------
The Preferred Securities rank pari passu, and payment thereon shall be
---- -----
made Pro Rata, with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Subordinated
Notes held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
10. Listing.
-------
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
I-13
<PAGE>
12. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-14
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - This
Preferred Security is a Global Certificate within the meaning of the Declaration
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
TCI Communications Financing IV
____% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
TCI Communications Financing IV, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of _______ preferred
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust designated the _____% Trust Originated Preferred Securities.
A1-1
<PAGE>
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of _______, 1996, as the same may be amended from time to
time (the "Declaration") including the designation of the terms of Preferred
Securities as set forth in Annex I to the Declaration. The Preferred Securities
and the Common Securities issued by the Trust pursuant to the Declaration
represent undivided beneficial interests in the assets of the Trust, including
the Subordinated Notes (as defined in the Declaration) issued by TCI
Communications, Inc., a Delaware corporation ("TCIC"), to the Trust pursuant to
the Indenture referred to in the Declaration. The Holder is entitled to the
benefits of the Preferred Securities Guarantee Agreement of TCIC dated as of
_________________, 1996 (the "Guarantee") to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture to
the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
The Holder of this certificate, by accepting this certificate, is deemed
to have (i) agreed to the terms of the Indenture and the Subordinated Notes,
including that the Subordinated Notes are subordinate and junior in right to
payment to all Senior Indebtedness (as defined in the Indenture) as and to the
extent provided in the Indenture and (ii) agreed to the terms of the Guarantee,
including that the Guarantee is (x) subordinate and junior in right to payment
to all other liabilities of TCIC, including the Subordinated Notes, except those
made pari passu or subordinated by their terms, and (y) pari passu with the most
senior preferred stock now or hereafter issued by TCIC and with any guarantee
now or hereafter entered into by TCIC in respect of any preferred or preference
stock of any affiliate of TCIC.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the regular Trustees of the Trust have executed
this certificate for and on behalf of the Trust.
Dated:
TCI COMMUNICATIONS FINANCING IV
By: __________________________ By: _____________________
Regular Trustee
COUNTERSIGNED AND REGISTERED: TRANSFER AGENT AND
REGISTRAR
THE BANK OF NEW YORK
(NEW YORK, NEW YORK)
AUTHORIZED SIGNATURE
A1-2
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM as tenants in common UNIF GIFT ACT __________ Custodian __________
TEN ENT as tenants by the entireties (Cust) (Minor)
JT TEN as joint tenants with right of Under Uniform Gifts to Minors
survivorship and not as tenants Act _______________
in common (State)
Additional abbreviations may also be used though not in the above list.
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Please print or typewrite name(s) and address(es) including postal zip code(s)
of assignee(s)
of the Preferred Securities represented by this Certificate and irrevocably
appoints
_______________________________________________________________________________
_______________________________________________________________________________
___________________________________________________________ attorney to transfer
such Preferred Securities on the books of the Trust. The attorney may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
* IMPORTANT READ CAREFULLY:
The signature(s) to this assignment must correspond with the name(s) as
written upon the face of the certificate in every particular without alteration,
enlargement or change whatsoever. The signature(s) of the person(s) executing
this power must be guaranteed by an eligible guarantor institution which, at the
time of issuing the guarantee, is a member of, or a participant in the medallion
signature guarantee program recognized by the Securities Transfer
Association.
A1-3
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TCI Communications Financing IV
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
TCI Communications Financing IV, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the ______% Trust Originated Common Securities (liquidation amount
$25 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of _______,
1995, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Subordinated Notes as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Subordinated
Notes.
A2-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this __ day of
____________, 199__.
TCI COMMUNICATIONS FINANCING IV
By: _________________________
Name:
Title:
A2-2
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's name and social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
-------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Common
- ----------------------------------------------
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-3
<PAGE>
EXHIBIT B
SPECIMEN OF SUBORDINATED NOTE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
EXHIBIT 4.14
------------
DRAFT 11/20/95
- --------------------------------------------------------------------------------
TCI COMMUNICATIONS, INC.
AND
THE BANK OF NEW YORK,
Trustee
----------------------
FIRST SUPPLEMENTAL
INDENTURE
TO
INDENTURE
Dated as of _____________, 1996
----------------------
___% Subordinated Deferable Interest Notes due __________, 2045
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
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..................... 8
Section 6.2. Default on Senior Indebtedness............... 9
Section 6.3. Liquidation; Dissolution; Bankruptcy......... 9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
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.......................... 13
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..................................... 21
Section 10.2. Covenants as to the Trust.................... 21
ARTICLE XI
CERTAIN EVENTS OF DEFAULT
Section 11.1. Additional Events of Default................. 21
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................................ 22
Section 12.4. Separability................................. 22
Section 12.5. Counterparts................................. 22
Section 12.6. Acknowledgement of Rights of Holders of
Preferred Securities......................... 22
</TABLE>
ii
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of _______ ___, 1996 (this
"First 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 ________ ___, 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 __% Subordinated Deferrable Interest Notes due ___________, 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 First
Supplemental Indenture; and
WHEREAS, TCI Communications Financing I, a Delaware statutory business
trust (the "Trust"), has offered to the public $ ____ million aggregate stated
liquidation amount of its __% Trust Originated Preferred Securities (the
"Preferred Securities") and has offered to the Company $ ____ million 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 $ ____ million
aggregate principal amount of the Notes; and
WHEREAS, the Company has requested the Trustee to execute and deliver
this First Supplemental Indenture, and all requirements necessary to make this
First 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 First 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 First Supplemental Indenture, (b) a term defined anywhere in this First
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
Preferred Securities Guarantee
Preferred Security Certificate
Pricing Agreement
Pro Rata
Property Trustee
Regular Trustee
Special Event
Tax Event
Tax Event Opinion
Trust Securities
Underwriting Agreement
In addition, the following terms have the following respective
meanings:
"Declaration" means the Amended and Restated Declaration of Trust of
TCI Communications Financing I, a Delaware business trust, dated as of
______________, 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
2
<PAGE>
payable arising in the 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 First
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 First Supplemental Indenture as
a whole. References to Articles and Sections are to the Articles and Sections
of this First Supplemental Indenture. The headings to the Articles and Sections
are for convenience of reference and shall not affect the meaning or
interpretation of this First 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 "__% Subordinated Deferrable
Interest Notes due ____________, 2045." The aggregate principal amount of Notes
which may be authenticated and delivered under the Indenture is limited to
$__________ million (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 __________________,
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
3
<PAGE>
terms and provisions at the office or agency of the Trustee in New York, New
York, 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 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 First 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
cancelled 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 cancelled, will be executed by the
Company and delivered to the Trustee for authentication and delivery
in accordance with the Indenture and this First 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 cancelled.
4
<PAGE>
Section 2.5. Interest. (a) Each Note will bear interest at the rate
of ___% per annum (the "Coupon Rate") from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue principal and
(to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the Coupon Rate, 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 March 31, 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:
5
<PAGE>
(a) the Company has received a Redemption Tax Opinion; or
(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 _________________, 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
6
<PAGE>
organization on which the Preferred Securities are then listed, the Company
shall not be permitted to effect such partial redemption and may only redeem the
Notes in whole.
Section 3.3. 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
7
<PAGE>
Payment Date, or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to the New York Stock Exchange
or other applicable self-regulatory organization or to Holders of the Notes.
(c) The 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 Underwriting Agreement and the Pricing 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 Underwriting Agreement and the Pricing
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 indemnificaiton 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
(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
8
<PAGE>
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 First 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 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
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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 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
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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 First
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 First Supplemental Indenture, subject to the rights, if any, under this
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
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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
First 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 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.
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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 First 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 First
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 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
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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.
____% SUBORDINATED DEFERRABLE INTEREST NOTE
DUE _______, 2044
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
________________, 2044, and to pay interest on said principal sum from
________________, ____, 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 March
31, 1996, at the rate of ____% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest,
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
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than fifteen (15) days prior to such special record date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and the interest on this Note shall be
payable at the office or agency of the Trustee maintained for that purpose in
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]
16
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Attest:
By
Secretary
(FORM OF CERTIFICATE OF AUTHENTICATION)
Dated:
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 " __% Subordinated Deferrable Interest Notes due
_________, 2045" (herein sometimes referred to as the "Notes"), issued under and
pursuant to an Indenture dated as of ________________, 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 First
Supplemental Indenture dated as of ________________, 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.
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The Notes are general unsecured obligations of the Company and are
limited (except as otherwise provided in the Indenture) to $___________ in
aggregate principal amount.
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 ___________, 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
18
<PAGE>
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 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
19
<PAGE>
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.
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 $________________ may, upon execution of this First
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.
20
<PAGE>
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 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,
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 dissolution, winding-up or termination 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.
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
21
<PAGE>
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 a 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 its covenant not to 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 under the
circumstances described in the first two paragraphs of Section 10.1. Section
6.02 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 First 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 First 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 subsequent supplemental indenture or resolution of the Board of
Directors. The Indenture, as supplemented by this First 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 First
Supplemental Indenture.
Section 12.3. Governing Law. This First 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 First 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 First Supplemental Indenture or of the Notes, but this First
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 First 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. Acknowledgement 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.
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
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
[Title]
(Corporate Seal]
Attest:
Secretary
THE BANK OF NEW YORK,
as Trustee
By:
[Title]
[Corporate Seal]
Attest:
[Title]
23
<PAGE>
STATE OF __________ )
COUNTY OF _________ ) ss:
On the day of , 1996 before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is the ______________________________ 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.
NOTARY PUBLIC
[seal] Commission expires
STATE OF _____________)
COUNTY OF _____________) :
On the day of , 1996 before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he is the _______________________ 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.
NOTARY PUBLIC
[seal] Commission expires
24
<PAGE>
EXHIBIT 4.15
------------
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of ________, 1995
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................. 5
SECTION 2.2 Lists of Holders of Securities............................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee................... 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...................................................... 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................... 6
SECTION 2.6 Events of Default; Waiver.................................... 6
SECTION 2.7 Events of Default; Notice.................................... 6
SECTION 2.8 Conflicting Interests........................................ 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee............................................ 7
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee...................................................... 9
SECTION 3.3. Not Responsible for Recitals or Issuance
of Guarantee................................................. 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility..................... 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees..................................................... 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.................................................... 13
SECTION 5.2 Waiver of Notice and Demand.................................. 13
SECTION 5.3 Obligations Not Affected..................................... 13
SECTION 5.4 Rights of Holders............................................ 14
SECTION 5.5 Guarantee of Payment......................................... 15
SECTION 5.6 Subrogation.................................................. 15
SECTION 5.7 Independent Obligations...................................... 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................... 15
SECTION 6.2 Ranking...................................................... 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................................. 16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................................. 16
SECTION 8.2 Indemnification.............................................. 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns....................................... 18
SECTION 9.2 Amendments................................................... 18
SECTION 9.3 Notices...................................................... 18
SECTION 9.4 Benefit...................................................... 19
SECTION 9.5 Governing Law................................................ 19
SECTION 9.6 No Recourse Against Certain Persons.......................... 19
</TABLE>
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of ________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of TCI Communications Financing I, a Delaware
statutory business trust (the "Issuer").
WITNESSETH:
-----------
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of ________, 1995, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof [ ] preferred securities, having an
aggregate liquidation amount of $[ ] designated the _____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
as this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which banking institutions in The City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
--------------
Securities.
2
<PAGE>
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds available therefore, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Subordinated Notes to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an Indenture Event of Default has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Preferred Securities; provided, however, that, in
-------- -------
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
------------------
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of _______, 1995, among the
---------
Guarantor and The Bank of New York, as trustee, and the First Supplemental
Indenture thereto pursuant to which certain subordinated debt securities of the
Guarantor are to be issued to the Property Trustee (as defined in the
Declaration).
"Indenture Event of Default" has the same meaning as that given to the
--------------------------
term "Event of Default" in the Indenture.
3
<PAGE>
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities
outstanding as of the date of determination.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities Guarantee
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, until a
---------------------------
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
-------------------
Trustee, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Preferred Guarantee Trustee customarily per-
4
<PAGE>
forming functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Subordinated Notes" means the series of subordinated debt securities
------------------
of the Guarantor designated the ___% Subordinated Deferrable Interest Notes due
[_______, 2044] held by the Property Trustee.
"Successor Preferred Guarantee Trustee" means a successor Preferred
-------------------------------------
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TCI" means Tele-Communications, Inc., a Delaware corporation.
-----
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") (i) as of January 1 and June 30 of each year, within one Business Day
thereafter, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request from the Preferred Guarantee Trustee for a List
of Holders, which shall be as of a date no more than 14 days before such List of
Holders is given to the Preferred Guarantee Trustee; provided, that the
--------
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
5
<PAGE>
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
------------------------------------------
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Events of Default; Notice
-------------------------
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have been
cured
6
<PAGE>
before the giving of such notice; provided, that the Preferred Guarantee Trustee
--------
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting (and cessation as to the Preferred Guarantee Trustee) of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
7
<PAGE>
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee,
8
<PAGE>
unless it shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
---------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.
9
<PAGE>
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such
adequate security and indemnity as would satisfy a reasonable person in the
position of the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Preferred Guarantee Trustee;
provided that, nothing contained in this Section 3.2(a)(vi) shall be taken
--------
to relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Preferred Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
10
<PAGE>
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
-----------------------------------------------------
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
----------------------------------------
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
11
<PAGE>
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
-----------------------------------------------------------
Trustees
--------
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been
12
<PAGE>
appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counter-claim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
13
<PAGE>
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Pre-
14
<PAGE>
ferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Preferred
Guarantee Trustee or any other Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Preferred
Securities may directly institute proceedings against the Guarantor to obtain
Guarantee Payments in respect of the Preferred Securities owned by such Holder,
without first waiting to determine if the Preferred Guarantee Trustee has
enforced this Preferred Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
SECTION 5.5 Guarantee of Payment
--------------------
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
(a) So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or Indenture Event of Default, then (a)
the Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued
15
<PAGE>
by the Guarantor which rank pari passu with or junior to the Subordinated
Notes and (c) the Company shall not make any guarantee payments (other than
pursuant to this Preferred Securities Guarantee) with respect to the foregoing;
provided, however, that the foregoing restrictions do not apply to any dividend,
redemption, interest, principal or guarantee payments by the Company where the
payment is made by way of (i) securities (including capital stock) that rank
junior to the securities on which such dividend, redemption, interest, principal
or guarantee payment is being made or (ii) securities (including capital stock)
of Tele-Communications, Inc.
(b) Notwithstanding subsection 6.1(a) or any other language to the
contrary contained in this Preferred Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 6.2 Ranking
-------
This Preferred Securities Guarantee constitutes an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock issued by the Guarantor from time to time
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Preferred Securities Guarantee shall terminate upon the earliest
to occur of (i) the full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Subordinated Notes to the Holder's of all
of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
16
<PAGE>
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Preferred Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination
of this Preferred Securities Guarantee.
SECTION 8.2 Indemnification
---------------
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person in accordance with this Preferred
Securities Guarantee, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The provisions of this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
17
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10256
Attention: Corporate Trust Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
TCI Communications, Inc.
5629 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
18
<PAGE>
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
-------------
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6 No Recourse Against Certain Persons.
-----------------------------------
No past, present or future director, officer, employee or stockholder,
as such, of the Guarantor or any successor thereof shall have any liability for
any obligations of the Guarantor under this Preferred Securities Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or
their creation and all such liability is hereby waived and released. Such
waiver and release are part of the consideration for the issue of this Preferred
Securities Guarantee and the Preferred Securities.
19
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC., as
Guarantor
By:______________________
Name:
Title:
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By:______________________
Name:
Title:
20
<PAGE>
EXHIBIT 4.16
------------
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of ________, 1995
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................. 5
SECTION 2.2 Lists of Holders of Securities............................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee................... 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...................................................... 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................... 6
SECTION 2.6 Events of Default; Waiver.................................... 6
SECTION 2.7 Events of Default; Notice.................................... 6
SECTION 2.8 Conflicting Interests........................................ 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee............................................ 7
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee...................................................... 9
SECTION 3.3. Not Responsible for Recitals or Issuance
of Guarantee................................................. 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility..................... 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees..................................................... 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.................................................... 13
SECTION 5.2 Waiver of Notice and Demand.................................. 13
SECTION 5.3 Obligations Not Affected..................................... 13
SECTION 5.4 Rights of Holders............................................ 14
SECTION 5.5 Guarantee of Payment......................................... 15
SECTION 5.6 Subrogation.................................................. 15
SECTION 5.7 Independent Obligations...................................... 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................... 15
SECTION 6.2 Ranking...................................................... 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................................. 16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................................. 16
SECTION 8.2 Indemnification.............................................. 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns....................................... 18
SECTION 9.2 Amendments................................................... 18
SECTION 9.3 Notices...................................................... 18
SECTION 9.4 Benefit...................................................... 19
SECTION 9.5 Governing Law................................................ 19
SECTION 9.6 No Recourse Against Certain Persons.......................... 19
</TABLE>
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of ________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of TCI Communications Financing II, a Delaware
statutory business trust (the "Issuer").
WITNESSETH:
-----------
WHEREAS, pursuant to an Amended and Restated Declara tion of Trust
(the "Declaration"), dated as of ________, 1995, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof [ ] preferred securities, having an
aggregate liquidation amount of $[ ] designated the _____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
as this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the con text otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which banking institutions in The City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
--------------
Securities.
2
<PAGE>
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds available therefore, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Subordinated Notes to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an Indenture Event of Default has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Preferred Securities; provided, however, that, in
-------- -------
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
------------------
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of _______, 1995, among the
---------
Guarantor and The Bank of New York, as trustee, and the First Supplemental
Indenture thereto pursuant to which certain subordinated debt securities of the
Guarantor are to be issued to the Property Trustee (as defined in the
Declaration).
"Indenture Event of Default" has the same meaning as that given to the
--------------------------
term "Event of Default" in the Indenture.
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"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities
outstanding as of the date of determination.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities Guarantee
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, until a
---------------------------
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
-------------------
Trustee, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Preferred Guarantee Trustee customarily per-
4
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forming functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Subordinated Notes" means the series of subordinated debt securities
------------------
of the Guarantor designated the ___% Subordinated Deferrable Interest Notes due
[_______, 2044] held by the Property Trustee.
"Successor Preferred Guarantee Trustee" means a successor Preferred
-------------------------------------
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TCI" means Tele-Communications, Inc., a Delaware corporation.
-----
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") (i) as of January 1 and June 30 of each year, within one Business Day
thereafter, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request from the Preferred Guarantee Trustee for a List
of Holders, which shall be as of a date no more than 14 days before such List of
Holders is given to the Preferred Guarantee Trustee; provided, that the
--------
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
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(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
------------------------------------------
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Events of Default; Notice
-------------------------
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have been
cured
6
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before the giving of such notice; provided, that the Preferred Guarantee Trustee
--------
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting (and cessation as to the Preferred Guarantee Trustee) of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
7
<PAGE>
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee,
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<PAGE>
unless it shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
---------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.
9
<PAGE>
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the position
of the Preferred Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
--------
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it
by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Preferred Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
10
<PAGE>
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
-----------------------------------------------------
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
----------------------------------------
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
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(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
-----------------------------------------------------------
Trustees
--------
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instru ment
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been
12
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appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
13
<PAGE>
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Pre-
14
<PAGE>
ferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Preferred
Guarantee Trustee or any other Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Preferred
Securities may directly institute proceedings against the Guarantor to obtain
Guarantee Payments in respect of the Preferred Securities owned by such Holder,
without first waiting to determine if the Preferred Guarantee Trustee has
enforced this Preferred Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
SECTION 5.5 Guarantee of Payment
--------------------
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
(a) So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or Indenture Event of Default, then (a)
the Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued
15
<PAGE>
by the Guarantor which rank pari passu with or junior to the Subordinated
Notes and (c) the Company shall not make any guarantee payments (other than
pursuant to this Preferred Securities Guarantee) with respect to the foregoing;
provided, however, that the foregoing restrictions do not apply to any dividend,
redemption, interest, principal or guarantee payments by the Company where the
payment is made by way of (i) securities (including capital stock) that rank
junior to the securities on which such dividend, redemption, interest, principal
or guarantee payment is being made or (ii) securities (including capital stock)
of Tele-Communications, Inc.
(b) Notwithstanding subsection 6.1(a) or any other language to the
contrary contained in this Preferred Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 6.2 Ranking
-------
This Preferred Securities Guarantee constitutes an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock issued by the Guarantor from time to time
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Preferred Securities Guarantee shall terminate upon the earliest
to occur of (i) the full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Subordinated Notes to the Holder's of all
of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
16
<PAGE>
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Preferred Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination
of this Preferred Securities Guarantee.
SECTION 8.2 Indemnification
---------------
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person in accordance with this Preferred
Securities Guarantee, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by
the Guarantor prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The provisions of this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
17
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10256
Attention: Corporate Trust Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
TCI Communications, Inc.
5629 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
18
<PAGE>
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
-------------
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6 No Recourse Against Certain Persons.
-----------------------------------
No past, present or future director, officer, employee or stockholder,
as such, of the Guarantor or any successor thereof shall have any liability for
any obligations of the Guarantor under this Preferred Securities Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or
their creation and all such liability is hereby waived and released. Such
waiver and release are part of the consideration for the issue of this Preferred
Securities Guarantee and the Preferred Securities.
19
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC., as
Guarantor
By:_______________________
Name:
Title:
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By:_______________________
Name:
Title:
20
<PAGE>
EXHIBIT 4.17
------------
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of ________, 1995
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............................. 5
SECTION 2.2 Lists of Holders of Securities............................... 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee................... 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee...................................................... 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.................................................... 6
SECTION 2.6 Events of Default; Waiver.................................... 6
SECTION 2.7 Events of Default; Notice.................................... 6
SECTION 2.8 Conflicting Interests........................................ 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee............................................ 7
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee...................................................... 9
SECTION 3.3. Not Responsible for Recitals or Issuance
of Guarantee................................................. 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility..................... 11
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................................. 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.................................................... 13
SECTION 5.2 Waiver of Notice and Demand.................................. 13
SECTION 5.3 Obligations Not Affected..................................... 13
SECTION 5.4 Rights of Holders............................................ 14
SECTION 5.5 Guarantee of Payment......................................... 15
SECTION 5.6 Subrogation.................................................. 15
SECTION 5.7 Independent Obligations...................................... 15
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................... 15
SECTION 6.2 Ranking...................................................... 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................................. 16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................................. 16
SECTION 8.2 Indemnification.............................................. 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns....................................... 18
SECTION 9.2 Amendments................................................... 18
SECTION 9.3 Notices...................................................... 18
SECTION 9.4 Benefit...................................................... 19
SECTION 9.5 Governing Law................................................ 19
SECTION 9.6 No Recourse Against Certain Persons.......................... 19
</TABLE>
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of ________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of TCI Communications Financing III, a Delaware
statutory business trust (the "Issuer").
WITNESSETH:
-----------
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of ________, 1995, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided benefi cial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof [ ] preferred securities, having an
aggregate liquidation amount of $[ ] designated the _____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
as this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1 ;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which banking institutions in The City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
--------------
Securities.
2
<PAGE>
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds available therefore, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Subordinated Notes to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an Indenture Event of Default has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Preferred Securities; provided, however, that, in
-------- -------
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
------------------
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of _______, 1995, among the
---------
Guarantor and The Bank of New York, as trustee, and the First Supplemental
Indenture thereto pursuant to which certain subordinated debt securities of the
Guarantor are to be issued to the Property Trustee (as defined in the
Declaration).
"Indenture Event of Default" has the same meaning as that given to the
--------------------------
term "Event of Default" in the Indenture.
3
<PAGE>
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities
outstanding as of the date of determination.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities Guarantee
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, until a
---------------------------
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
-------------------
Trustee, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Preferred Guarantee Trustee customarily per-
4
<PAGE>
forming functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Subordinated Notes" means the series of subordinated debt securities
------------------
of the Guarantor designated the ___% Subordinated Deferrable Interest Notes due
[_______, 2044] held by the Property Trustee.
"Successor Preferred Guarantee Trustee" means a successor Preferred
-------------------------------------
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TCI" means Tele-Communications, Inc., a Delaware corporation.
-----
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") (i) as of January 1 and June 30 of each year, within one Business Day
thereafter, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request from the Preferred Guarantee Trustee for a List
of Holders, which shall be as of a date no more than 14 days before such List of
Holders is given to the Preferred Guarantee Trustee; provided, that the
--------
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
5
<PAGE>
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
------------------------------------------
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Events of Default; Notice
-------------------------
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have been
cured
6
<PAGE>
before the giving of such notice; provided, that the Preferred Guarantee Trustee
--------
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting (and cessation as to the Preferred Guarantee Trustee) of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
7
<PAGE>
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Preferred Securities
Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee,
8
<PAGE>
unless it shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or adequate
indemnity against such risk or liability is not reasonably assured to it .
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
---------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may rely, and shall be fully
protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Guarantor.
9
<PAGE>
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in the position
of the Preferred Guarantee Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee; provided
--------
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it
by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Preferred Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
10
<PAGE>
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
-----------------------------------------------------
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
----------------------------------------
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
11
<PAGE>
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
-----------------------------------------------------------
Trustees
--------
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been
12
<PAGE>
appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counter-claim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
13
<PAGE>
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Pre-
14
<PAGE>
ferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Preferred
Guarantee Trustee or any other Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Preferred
Securities may directly institute proceedings against the Guarantor to obtain
Guarantee Payments in respect of the Preferred Securities owned by such Holder,
without first waiting to determine if the Preferred Guarantee Trustee has
enforced this Preferred Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
SECTION 5.5 Guarantee of Payment
--------------------
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
(a) So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or Indenture Event of Default, then (a)
the Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued
15
<PAGE>
by the Guarantor which rank pari passu with or junior to the Subordinated
Notes and (c) the Company shall not make any guarantee payments (other than
pursuant to this Preferred Securities Guarantee) with respect to the foregoing;
provided, however, that the foregoing restrictions do not apply to any dividend,
redemption, interest, principal or guarantee payments by the Company where the
payment is made by way of (i) securities (including capital stock) that rank
junior to the securities on which such dividend, redemption, interest, principal
or guarantee payment is being made or (ii) securities (including capital stock)
of Tele-Communications, Inc.
(b) Notwithstanding subsection 6.1(a) or any other language to the
contrary contained in this Preferred Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 6.2 Ranking
-------
This Preferred Securities Guarantee constitutes an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock issued by the Guarantor from time to time
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Preferred Securities Guarantee shall terminate upon the earliest
to occur of (i) the full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Subordinated Notes to the Holder's of all
of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
16
<PAGE>
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Preferred Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination
of this Preferred Securities Guarantee.
SECTION 8.2 Indemnification
---------------
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person in accordance with this Preferred
Securities Guarantee, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The provisions of this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
17
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10256
Attention: Corporate Trust Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
TCI Communications, Inc.
5629 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
18
<PAGE>
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
-------------
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6 No Recourse Against Certain Persons.
-----------------------------------
No past, present or future director, officer, employee or stockholder,
as such, of the Guarantor or any successor thereof shall have any liability for
any obligations of the Guarantor under this Preferred Securities Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or
their creation and all such liability is hereby waived and released. Such
waiver and release are part of the consideration for the issue of this Preferred
Securities Guarantee and the Preferred Securities.
19
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC., as
Guarantor
By:_______________________
Name:
Title:
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By:_______________________
Name:
Title:
20
<PAGE>
EXHIBIT 4.18
------------
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of ________, 1995
====================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................................ 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................. 5
SECTION 2.2 Lists of Holders of Securities................................ 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee.................... 6
SECTION 2.4 Periodic Reports to Preferred Guarantee
Trustee....................................................... 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent..................................................... 6
SECTION 2.6 Events of Default; Waiver..................................... 6
SECTION 2.7 Events of Default; Notice..................................... 6
SECTION 2.8 Conflicting Interests......................................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred
Guarantee Trustee............................................. 7
SECTION 3.2 Certain Rights of Preferred Guarantee
Trustee....................................................... 9
SECTION 3.3. Not Responsible for Recitals or Issuance
of Guarantee.................................................. 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility...................... 11
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustees.................................. 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee..................................................... 13
SECTION 5.2 Waiver of Notice and Demand................................... 13
SECTION 5.3 Obligations Not Affected...................................... 13
SECTION 5.4 Rights of Holders............................................. 14
SECTION 5.5 Guarantee of Payment.......................................... 15
SECTION 5.6 Subrogation................................................... 15
SECTION 5.7 Independent Obligations....................................... 15
</TABLE>
<PAGE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 6.1 Limitation of Transactions............................... 15
SECTION 6.2 Ranking.................................................. 16
</TABLE>
ARTICLE VII
TERMINATION
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 7.1 Termination.............................................. 16
</TABLE>
ARTICLE VIII
INDEMNIFICATION
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 8.1 Exculpation.............................................. 16
SECTION 8.2 Indemnification.......................................... 17
</TABLE>
ARTICLE IX
MISCELLANEOUS
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 9.1 Successors and Assigns................................... 18
SECTION 9.2 Amendments............................................... 18
SECTION 9.3 Notices.................................................. 18
SECTION 9.4 Benefit.................................................. 19
SECTION 9.5 Governing Law............................................ 19
SECTION 9.6 No Recourse Against Certain Persons...................... 19
</TABLE>
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of ________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), and The Bank of New York, a New York
banking corporation, as trustee (the "Preferred Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of TCI Communications Financing IV, a Delaware
statutory business trust (the "Issuer").
WITNESSETH:
-----------
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ________, 1995, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [ ] preferred securities, having an
aggregate liquidation amount of $[ ] designated the _____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") with substantially identical terms
as this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
------------------------------
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the con text otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, Sunday or other
------------
day on which banking institutions in The City of New York, New York are
authorized or required by any applicable law to close.
"Common Securities" means the securities representing common undivided
-----------------
beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
--------------
Securities.
2
<PAGE>
"Event of Default" means a default by the Guarantor on any of its
----------------
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
------------------
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds available therefore, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Subordinated Notes to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an Indenture Event of Default has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
------
of the Issuer, of any Preferred Securities; provided, however, that, in
-------- -------
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
------------------
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of _______, 1995, among the
---------
Guarantor and The Bank of New York, as trustee, and the First Supplemental
Indenture thereto pursuant to which certain subordinated debt securities of the
Guarantor are to be issued to the Property Trustee (as defined in the
Declaration).
"Indenture Event of Default" has the same meaning as that given to the
--------------------------
term "Event of Default" in the Indenture.
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"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Preferred Securities
outstanding as of the date of determination.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Preferred Securities Guarantee
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means The Bank of New York, until a
---------------------------
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
-------------------
Trustee, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Preferred Guarantee Trustee customarily per-
4
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forming functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Subordinated Notes" means the series of subordinated debt securities
------------------
of the Guarantor designated the ___% Subordinated Deferrable Interest Notes due
[_______, 2044] held by the Property Trustee.
"Successor Preferred Guarantee Trustee" means a successor Preferred
-------------------------------------
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TCI" means Tele-Communications, Inc., a Delaware corporation.
-----
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
--------------------------------
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
------------------------------
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") (i) as of January 1 and June 30 of each year, within one Business Day
thereafter, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request from the Preferred Guarantee Trustee for a List
of Holders, which shall be as of a date no more than 14 days before such List of
Holders is given to the Preferred Guarantee Trustee; provided, that the
--------
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
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(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
------------------------------------------
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
-----------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
------------------------------------------------
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
-------------------------
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Events of Default; Notice
-------------------------
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have been
cured
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before the giving of such notice; provided, that the Preferred Guarantee Trustee
--------
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.
SECTION 2.8 Conflicting Interests
---------------------
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting (and cessation as to the Preferred Guarantee Trustee) of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
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<PAGE>
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that :
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee shall
not be liable except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Preferred Securities
Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee,
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<PAGE>
unless it shall be proved that the Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in liquidation
amount of the Preferred Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee, or exercising any trust or power conferred upon the Preferred Guarantee
Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Preferred Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Preferred
Securities Guarantee or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
---------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may rely, and shall be fully
protected in acting or refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a Direction
(as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any action
hereunder, the Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
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<PAGE>
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees. The
Preferred Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Preferred Securities
Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless such Holder shall
have provided to the Preferred Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the Preferred
Guarantee Trustee, against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that, nothing contained in this
--------
Section 3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Preferred Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
10
<PAGE>
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the signature
of the Preferred Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the Preferred Guarantee Trustee to so act or as
to its compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by the
Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Preferred Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (iii) shall be protected
in acting in accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
------------------------------------------------------
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
----------------------------------------
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
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(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
-----------------------------------------------------------
Trustees
--------
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been
12
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appointed and has accepted such appointment by instrument in writing executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor and
the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counter-claim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by the Issuer;
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(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Pre-
14
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ferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Preferred
Guarantee Trustee or any other Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Preferred
Securities may directly institute proceedings against the Guarantor to obtain
Guarantee Payments in respect of the Preferred Securities owned by such Holder,
without first waiting to determine if the Preferred Guarantee Trustee has
enforced this Preferred Securities Guarantee or first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.
SECTION 5.5 Guarantee of Payment
--------------------
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
(a) So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or Indenture Event of Default, then (a)
the Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock, (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued
15
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by the Guarantor which rank pari passu with or junior to the Subordinated
Notes and (c) the Company shall not make any guarantee payments (other than
pursuant to this Preferred Securities Guarantee) with respect to the foregoing;
provided, however, that the foregoing restrictions do not apply to any dividend,
redemption, interest, principal or guarantee payments by the Company where the
payment is made by way of (i) securities (including capital stock) that rank
junior to the securities on which such dividend, redemption, interest, principal
or guarantee payment is being made or (ii) securities (including capital stock)
of Tele-Communications, Inc.
(b) Notwithstanding subsection 6.1(a) or any other language to the
contrary contained in this Preferred Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 6.2 Ranking
-------
This Preferred Securities Guarantee constitutes an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior preferred or preference stock issued by the Guarantor from time to time
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Preferred Securities Guarantee shall terminate upon the earliest
to occur of (i) the full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Subordinated Notes to the Holder's of all
of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omission.
16
<PAGE>
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions, the Redemption Price or the Liquidation Distribution to
Holders of Preferred Securities might properly be paid.
(c) The provisions of this Section 8.1 shall survive the termination
of this Preferred Securities Guarantee.
SECTION 8.2 Indemnification
---------------
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person in accordance with this Preferred
Securities Guarantee, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be ad vanced by
the Guarantor prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as autho rized in Section
8.2(a).
(c) The provisions of this Section 8.2 shall survive the termination
of this Preferred Securities Guarantee.
17
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount of the Preferred
Securities. The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
-------
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10256
Attention: Corporate Trust Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
TCI Communications, Inc.
5629 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
18
<PAGE>
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
-------------
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6 No Recourse Against Certain Persons.
-----------------------------------
No past, present or future director, officer, employee or stockholder,
as such, of the Guarantor or any successor thereof shall have any liability for
any obligations of the Guarantor under this Preferred Securities Guarantee or
for any claim based on, in respect of, or by reason of, such obligations or
their creation and all such liability is hereby waived and released. Such
waiver and release are part of the consideration for the issue of this Preferred
Securities Guarantee and the Preferred Securities.
19
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
TCI COMMUNICATIONS, INC., as
Guarantor
By:-------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By:-------------------------
Name:
Title:
20
<PAGE>
EXHIBIT 4.19
------------
_______________________________
COMMON SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of __________, 1995
_______________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION........................... 1
SECTION 1.1 Definitions Interpretation................. 1
ARTICLE II GUARANTEE............................................... 3
SECTION 2.1 Guarantee.................................. 3
SECTION 2.2 Waiver of Notice and Demand................ 3
SECTION 2.3 Obligations Not Affected................... 3
SECTION 2.4 Rights of Holders.......................... 4
SECTION 2.5 Guarantee of Payment....................... 4
SECTION 2.6 Subrogation................................ 4
SECTION 2.7 Independent Obligations.................... 5
ARTICLE III LIMITATION OF TRANSACTIONS; SUBORDINATION.............. 5
SECTION 3.1 Limitation of Transactions................. 5
SECTION 3.2 Ranking.................................... 5
ARTICLE IV TERMINATION............................................. 6
SECTION 4.1 Termination................................ 6
ARTICLE V MISCELLANEOUS............................................ 6
SECTION 5.1 Successors and Assigns..................... 6
SECTION 5.2 Amendments................................. 6
SECTION 5.3 Notices.................................... 6
SECTION 5.4 Benefit.................................... 7
SECTION 5.5 Governing Law.............................. 7
</TABLE>
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated
as of __________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of TCI Communications Financing I, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 1995, among the Trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] common securities, having an aggregate stated
liquidation amount of $[__________] designated the [_____]% Trust Originated
Common Securities (the "Common Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
such term is defined in the Indenture) has occurred and is continuing, the
rights of Holders of the Common Securities to receive Guarantee Payments under
this Common Securities Guarantee are subordinated to the rights of holders of
Preferred Securities to receive Guarantee Payments under the Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions Interpretation
--------------------------
In this Common Securities Guarantee, unless the context otherwise
requires:
<PAGE>
(a) Capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution
of this Common Securities Guarantee have the same meaning when used in
this Common Securities Guarantee unless otherwise defined in this
Common Securities Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee
has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the plural and vice
versa.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such Common Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Common Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Common Securities to the date of payment, to the
extent the Issuer has funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of Default
(as defined in the Indenture) has occurred and is continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Common Securities.
"Preferred Securities" shall mean the securities representing
preferred undivided beneficial interests in the assets of the Issuer.
-2-
<PAGE>
"TCI" shall mean Tele-Communications, Inc., a Delaware corporation.
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 2.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy
-3-
<PAGE>
conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 2.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4 Rights of Holders
-----------------
The Guarantor expressly acknowledges that any Holder of Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person.
SECTION 2.5 Guarantee of Payment
--------------------
This Common Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 2.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Common Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Common Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence,
-4-
<PAGE>
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 2.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions
--------------------------
(a) So long as any Common Securities remain outstanding, if (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
obligations hereunder, or (ii) there shall have occurred any Event of Default
then (a) the Guarantor shall not declare or pay any dividend on, or make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock and (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Subordinated Notes and (c) the
Company shall not make any guarantee payments (other than pursuant to this
Preferred Securities Guarantee) with respect to the foregoing. However, the
foregoing restriction will not apply to any dividend, redemption, interest,
principal or guarantee payments by the Company where the payment is made by way
of (i) securities (including capital stock) that rank junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made or (ii) securities (including capital stock) of Tele-Communications,
Inc., a Delaware corporation (or any successor to such corporation).
(b) Notwithstanding subsection 3.1(a) or any other language to the
contrary contained in this Common Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 3.2 Ranking
-------
This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the Subordinated
Notes and the Preferred Securities Guarantee, except those liabilities of the
Guarantor made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred stock issued from time to time by the Guarantor and
with any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred stock of any Subsidiary or Affiliate of the Guarantor, except the
Preferred Securities Guarantee, and (iii) senior to the Guarantor's common
stock.
-5-
<PAGE>
ARTICLE IV
TERMINATION
SECTION 4.1 Termination
-----------
This Common Securities Guarantee shall terminate upon the first to
occur of (i) full payment of the Redemption Price of all Common Securities, (ii)
the distribution of Subordinated Notes to the Holders of all of the Common
Securities or (iii) the full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Common Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common Securities
must restore payment of any sums paid under the Common Securities or under this
Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.
SECTION 5.2 Amendments
----------
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a majority in liquidation amount of all the outstanding
Common Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 5.3 Notices
-------
All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders of the Common
Securities):
-6-
<PAGE>
c/o TCI Communications Financing I
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:_______________
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Common Securities):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) if given to any Holder of Common Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 5.4 Benefit
-------
This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.
SECTION 5.5 Governing Law
-------------
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
-7-
<PAGE>
This Common Securities Guarantee is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC.
By:______________________________
Name:
Title:
-8-
<PAGE>
EXHIBIT 4.20
------------
________________________________
COMMON SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of __________, 1995
________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION........................... 1
SECTION 1.1 Definitions Interpretation................. 1
ARTICLE II GUARANTEE............................................... 3
SECTION 2.1 Guarantee.................................. 3
SECTION 2.2 Waiver of Notice and Demand................ 3
SECTION 2.3 Obligations Not Affected................... 3
SECTION 2.4 Rights of Holders.......................... 4
SECTION 2.5 Guarantee of Payment....................... 4
SECTION 2.6 Subrogation................................ 4
SECTION 2.7 Independent Obligations.................... 5
ARTICLE III LIMITATION OF TRANSACTIONS; SUBORDINATION.............. 5
SECTION 3.1 Limitation of Transactions................. 5
SECTION 3.2 Ranking.................................... 5
ARTICLE IV TERMINATION............................................. 6
SECTION 4.1 Termination................................ 6
ARTICLE V MISCELLANEOUS............................................ 6
SECTION 5.1 Successors and Assigns..................... 6
SECTION 5.2 Amendments................................. 6
SECTION 5.3 Notices.................................... 6
SECTION 5.4 Benefit.................................... 7
SECTION 5.5 Governing Law.............................. 7
</TABLE>
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated
as of __________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of TCI Communications Financing II, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 1995, among the Trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] common securities, having an aggregate stated
liquidation amount of $[__________] designated the [_____]% Trust Originated
Common Securities (the "Common Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
such term is defined in the Indenture) has occurred and is continuing, the
rights of Holders of the Common Securities to receive Guarantee Payments under
this Common Securities Guarantee are subordinated to the rights of holders of
Preferred Securities to receive Guarantee Payments under the Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions Interpretation
--------------------------
In this Common Securities Guarantee, unless the context otherwise
requires:
<PAGE>
(a) Capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution
of this Common Securities Guarantee have the same meaning when used in
this Common Securities Guarantee unless otherwise defined in this
Common Securities Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee
has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the plural and vice
versa.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such Common Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Common Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Common Securities to the date of payment, to the
extent the Issuer has funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of Default
(as defined in the Indenture) has occurred and is continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Common Securities.
"Preferred Securities" shall mean the securities representing
preferred undivided beneficial interests in the assets of the Issuer.
-2-
<PAGE>
"TCI" shall mean Tele-Communications, Inc., a Delaware corporation.
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 2.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy
-3-
<PAGE>
conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 2.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4 Rights of Holders
-----------------
The Guarantor expressly acknowledges that any Holder of Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person.
SECTION 2.5 Guarantee of Payment
--------------------
This Common Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 2.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Common Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Common Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence,
-4-
<PAGE>
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 2.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions
--------------------------
(a) So long as any Common Securities remain outstanding, if (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
obligations hereunder, or (ii) there shall have occurred any Event of Default
then (a) the Guarantor shall not declare or pay any dividend on, or make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock and (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Subordinated Notes and (c) the
Company shall not make any guarantee payments (other than pursuant to this
Preferred Securities Guarantee) with respect to the foregoing. However, the
foregoing restriction will not apply to any dividend, redemption, interest,
principal or guarantee payments by the Company where the payment is made by way
of (i) securities (including capital stock) that rank junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made or (ii) securities (including capital stock) of Tele-Communications,
Inc., a Delaware corporation (or any successor to such corporation).
(b) Notwithstanding subsection 3.1(a) or any other language to the
contrary contained in this Common Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 3.2 Ranking
-------
This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the Subordinated
Notes and the Preferred Securities Guarantee, except those liabilities of the
Guarantor made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred stock issued from time to time by the Guarantor and
with any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred stock of any Subsidiary or Affiliate of the Guarantor, except the
Preferred Securities Guarantee, and (iii) senior to the Guarantor's common
stock.
-5-
<PAGE>
ARTICLE IV
TERMINATION
SECTION 4.1 Termination
-----------
This Common Securities Guarantee shall terminate upon the first to
occur of (i) full payment of the Redemption Price of all Common Securities, (ii)
the distribution of Subordinated Notes to the Holders of all of the Common
Securities or (iii) the full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Common Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common Securities
must restore payment of any sums paid under the Common Securities or under this
Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.
SECTION 5.2 Amendments
----------
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a majority in liquidation amount of all the outstanding
Common Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 5.3 Notices
-------
All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders of the Common
Securities):
-6-
<PAGE>
c/o TCI Communications Financing II
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:_______________
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Common Securities):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) if given to any Holder of Common Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 5.4 Benefit
-------
This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.
SECTION 5.5 Governing Law
-------------
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
-7-
<PAGE>
This Common Securities Guarantee is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC.
By:______________________________
Name:
Title:
-8-
<PAGE>
EXHIBIT 4.21
------------
__________________________________
COMMON SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of __________, 1995
__________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION........................... 1
SECTION 1.1 Definitions Interpretation................. 1
ARTICLE II GUARANTEE............................................... 3
SECTION 2.1 Guarantee.................................. 3
SECTION 2.2 Waiver of Notice and Demand................ 3
SECTION 2.3 Obligations Not Affected................... 3
SECTION 2.4 Rights of Holders.......................... 4
SECTION 2.5 Guarantee of Payment....................... 4
SECTION 2.6 Subrogation................................ 4
SECTION 2.7 Independent Obligations.................... 5
ARTICLE III LIMITATION OF TRANSACTIONS; SUBORDINATION.............. 5
SECTION 3.1 Limitation of Transactions................. 5
SECTION 3.2 Ranking.................................... 5
ARTICLE IV TERMINATION............................................. 6
SECTION 4.1 Termination................................ 6
ARTICLE V MISCELLANEOUS............................................ 6
SECTION 5.1 Successors and Assigns..................... 6
SECTION 5.2 Amendments................................. 6
SECTION 5.3 Notices.................................... 6
SECTION 5.4 Benefit.................................... 7
SECTION 5.5 Governing Law.............................. 7
</TABLE>
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated
as of __________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of TCI Communications Financing III, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 1995, among the Trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] common securities, having an aggregate stated
liquidation amount of $[__________] designated the [_____]% Trust Originated
Common Securities (the "Common Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
such term is defined in the Indenture) has occurred and is continuing, the
rights of Holders of the Common Securities to receive Guarantee Payments under
this Common Securities Guarantee are subordinated to the rights of holders of
Preferred Securities to receive Guarantee Payments under the Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions Interpretation
--------------------------
In this Common Securities Guarantee, unless the context otherwise
requires :
<PAGE>
(a) Capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution
of this Common Securities Guarantee have the same meaning when used in
this Common Securities Guarantee unless otherwise defined in this
Common Securities Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee
has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the plural and vice
versa.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such Common Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Common Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Common Securities to the date of payment, to the
extent the Issuer has funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of Default
(as defined in the Indenture) has occurred and is continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Common Securities.
"Preferred Securities" shall mean the securities representing
preferred undivided beneficial interests in the assets of the Issuer.
-2-
<PAGE>
"TCI" shall mean Tele-Communications, Inc., a Delaware corporation.
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 2.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy
-3-
<PAGE>
conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 2.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4 Rights of Holders
-----------------
The Guarantor expressly acknowledges that any Holder of Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person.
SECTION 2.5 Guarantee of Payment
--------------------
This Common Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 2.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Common Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Common Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence,
-4-
<PAGE>
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 2.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions
--------------------------
(a) So long as any Common Securities remain outstanding, if (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
obligations hereunder, or (ii) there shall have occurred any Event of Default
then (a) the Guarantor shall not declare or pay any dividend on, or make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock and (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Subordinated Notes and (c) the
Company shall not make any guarantee payments (other than pursuant to this
Preferred Securities Guarantee) with respect to the foregoing. However, the
foregoing restriction will not apply to any dividend, redemption, interest,
principal or guarantee payments by the Company where the payment is made by way
of (i) securities (including capital stock) that rank junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made or (ii) securities (including capital stock) of Tele-Communications,
Inc., a Delaware corporation (or any successor to such corporation).
(b) Notwithstanding subsection 3.1(a) or any other language to the
contrary contained in this Common Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 3.2 Ranking
-------
This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the Subordinated
Notes and the Preferred Securities Guarantee, except those liabilities of the
Guarantor made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred stock issued from time to time by the Guarantor and
with any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred stock of any Subsidiary or Affiliate of the Guarantor, except the
Preferred Securities Guarantee, and (iii) senior to the Guarantor's common
stock.
-5-
<PAGE>
ARTICLE IV
TERMINATION
SECTION 4.1 Termination
-----------
This Common Securities Guarantee shall terminate upon the first to
occur of (i) full payment of the Redemption Price of all Common Securities, (ii)
the distribution of Subordinated Notes to the Holders of all of the Common
Securities or (iii) the full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Common Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common Securities
must restore payment of any sums paid under the Common Securities or under this
Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.
SECTION 5.2 Amendments
----------
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a majority in liquidation amount of all the outstanding
Common Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 5.3 Notices
-------
All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders of the Common
Securities):
-6-
<PAGE>
c/o TCI Communications Financing III
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:_______________
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Common Securities):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) if given to any Holder of Common Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 5.4 Benefit
-------
This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.
SECTION 5.5 Governing Law
-------------
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
-7-
<PAGE>
This Common Securities Guarantee is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC.
By:______________________________
Name:
Title:
-8-
<PAGE>
EXHIBIT 4.22
------------
___________________________________
COMMON SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of __________, 1995
___________________________________
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION.............................. 1
SECTION 1.1 Definitions Interpretation.................... 1
ARTICLE II GUARANTEE.................................................. 3
SECTION 2.1 Guarantee..................................... 3
SECTION 2.2 Waiver of Notice and Demand................... 3
SECTION 2.3 Obligations Not Affected...................... 3
SECTION 2.4 Rights of Holders............................. 4
SECTION 2.5 Guarantee of Payment.......................... 4
SECTION 2.6 Subrogation................................... 4
SECTION 2.7 Independent Obligations....................... 5
ARTICLE III LIMITATION OF TRANSACTIONS; SUBORDINATION................. 5
SECTION 3.1 Limitation of Transactions.................... 5
SECTION 3.2 Ranking....................................... 5
ARTICLE IV TERMINATION................................................ 6
SECTION 4.1 Termination................................... 6
ARTICLE V MISCELLANEOUS............................................... 6
SECTION 5.1 Successors and Assigns........................ 6
SECTION 5.2 Amendments.................................... 6
SECTION 5.3 Notices....................................... 6
SECTION 5.4 Benefit....................................... 7
SECTION 5.5 Governing Law................................. 7
</TABLE>
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated
as of __________, 1995, is executed and delivered by TCI Communications, Inc., a
Delaware corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of TCI Communications Financing IV, a Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 1995, among the Trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [_____] common securities, having an aggregate stated
liquidation amount of $[__________] designated the [_____]% Trust Originated
Common Securities (the "Common Securities");
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
such term is defined in the Indenture) has occurred and is continuing, the
rights of Holders of the Common Securities to receive Guarantee Payments under
this Common Securities Guarantee are subordinated to the rights of holders of
Preferred Securities to receive Guarantee Payments under the Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions Interpretation
--------------------------
In this Common Securities Guarantee, unless the context otherwise
requires:
<PAGE>
(a) Capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution
of this Common Securities Guarantee have the same meaning when used in
this Common Securities Guarantee unless otherwise defined in this
Common Securities Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee
has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this
Common Securities Guarantee" are to this Common Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the plural and vice
versa.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions that are required to be paid on such Common Securities, to the
extent the Issuer has funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Common Securities as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Common Securities to the date of payment, to the
extent the Issuer has funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of Default
(as defined in the Indenture) has occurred and is continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Common Securities.
"Preferred Securities" shall mean the securities representing
preferred undivided beneficial interests in the assets of the Issuer.
-2-
<PAGE>
"TCI" shall mean Tele-Communications, Inc., a Delaware corporation.
ARTICLE II
GUARANTEE
SECTION 2.1 Guarantee
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of set-
off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.2 Waiver of Notice and Demand
---------------------------
The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 2.3 Obligations Not Affected
------------------------
The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of
Distributions or other sum payable that results from the extension of
any interest payment period on the Subordinated Notes permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy
-3-
<PAGE>
conferred on the Holders pursuant to the terms of the Common
Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition
or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 23 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4 Rights of Holders
-----------------
The Guarantor expressly acknowledges that any Holder of Common
Securities may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Common Securities Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person.
SECTION 2.5 Guarantee of Payment
--------------------
This Common Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 2.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Common Securities against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Common Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
- -------- -------
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Common
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Common Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence,
-4-
<PAGE>
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 2.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1 Limitation of Transactions
--------------------------
(a) So long as any Common Securities remain outstanding, if (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
obligations hereunder, or (ii) there shall have occurred any Event of Default
then (a) the Guarantor shall not declare or pay any dividend on, or make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock and (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by the Guarantor
which rank pari passu with or junior to the Subordinated Notes and (c) the
Company shall not make any guarantee payments (other than pursuant to this
Preferred Securities Guarantee) with respect to the foregoing. However, the
foregoing restriction will not apply to any dividend, redemption, interest,
principal or guarantee payments by the Company where the payment is made by way
of (i) securities (including capital stock) that rank junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made or (ii) securities (including capital stock) of Tele-Communications,
Inc., a Delaware corporation (or any successor to such corporation).
(b) Notwithstanding subsection 3.1(a) or any other language to the
contrary contained in this Common Securities Guarantee, nothing shall prevent
the Guarantor from: (i) declaring or paying any dividend on, or making any
distribution with respect to, or redeeming, purchasing, acquiring or making a
liquidation payment with respect to, any of its capital stock in or with (x)
securities of the Guarantor (including capital stock) that rank junior to such
capital stock or (y) securities (including capital stock) of TCI or (ii) paying
any interest, principal or premium on, or repaying, repurchasing or redeeming,
any debt securities issued by the Guarantor which rank pari passu with or junior
to the Subordinated Notes, with (x) securities of the Guarantor (including
capital stock) that rank junior to such debt securities or (y) securities
(including capital stock) of TCI.
SECTION 3.2 Ranking
-------
This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, including the Subordinated
Notes and the Preferred Securities Guarantee, except those liabilities of the
Guarantor made pari passu or subordinate by their terms, (ii) pari passu with
the most senior preferred stock issued from time to time by the Guarantor and
with any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred stock of any Subsidiary or Affiliate of the Guarantor, except the
Preferred Securities Guarantee, and (iii) senior to the Guarantor's common
stock.
-5-
<PAGE>
ARTICLE IV
TERMINATION
SECTION 4.1 Termination
-----------
This Common Securities Guarantee shall terminate upon the first to
occur of (i) full payment of the Redemption Price of all Common Securities, (ii)
the distribution of Subordinated Notes to the Holders of all of the Common
Securities or (iii) the full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Common Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Common Securities
must restore payment of any sums paid under the Common Securities or under this
Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding.
SECTION 5.2 Amendments
----------
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a majority in liquidation amount of all the outstanding
Common Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 5.3 Notices
-------
All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice of to the Holders of the Common
Securities):
-6-
<PAGE>
c/o TCI Communications Financing IV
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention:_______________
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Common Securities):
TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Attention: Chief Financial Officer
(c) if given to any Holder of Common Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 5.4 Benefit
-------
This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.
SECTION 5.5 Governing Law
-------------
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
-7-
<PAGE>
This Common Securities Guarantee is executed as of the day and year
first above written.
TCI COMMUNICATIONS, INC.
By:______________________________
Name:
Title:
-8-
<PAGE>
[BAKER & BOTTS]
January 23, 1996
EXHIBIT 5.1
-----------
TCI Communications, Inc.
TCI Communications Financing I
TCI Communications Financing II
TCI Communications Financing III
TCI Communications Financing IV
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Dear Sirs:
As counsel for TCI Communications, Inc., a Delaware corporation (the
"Company"), and TCI Communications Financing I, TCI Communications Financing II,
TCI Communications Financing III, and TCI Communications Financing IV, each a
Delaware business trust (collectively the "Trusts"), we have examined and are
familiar with the Registration Statement on Form S-3, File No. 33-64525, filed
by the Company and the Trusts under the Securities Act of 1933, as amended (the
"Securities Act"), on November 22, 1995, as amended by Amendment No.s 1 and 2
(as so amended, the "Registration Statement"). The Registration Statement
relates to the registration under the Securities Act of the offer and sale of
(i) subordinated debt securities of the Company (the "Subordinated Debt
Securities"), (ii) Preferred Securities of the Trusts (the "Preferred
Securities"), (ii) guarantees of the Preferred Securities, as set forth in four
Preferred Securities Guarantee Agreements (the "Guarantees") to be entered into
by the Company on behalf of the holders of the Preferred Securities and (iv)
certain back-up undertakings of the Company in connection with the Preferred
Securities, such securities to have an aggregate public offering price not to
exceed $1,000,000,000.
As described in the Registration Statement, the Company may offer
Subordinated Debt Securities in series under an Indenture (the "Indenture") to
be entered into by the Company with The Bank of New York, as Trustee (the "Debt
Trustee"). Each Trust that issues Preferred Securities will use the gross
proceeds from such Preferred Securities and from the sale of its common
securities to purchase an issue of Subordinated Debt Securities from the
Company. In connection therewith, the Company will enter into a Preferred
Securities Guarantee Agreement (a "Preferred Securities Guarantee Agreement")
with The Bank of New York, as Trustee (the "Preferred Securities Trustee"),
pursuant to which the Company will guarantee the Preferred Securities issued by
a Trust to the extent set forth in such Preferred Securities Guarantee
<PAGE>
January 23, 1996
Page 2
Agreement. We have participated in the preparation and qualification of each
Preferred Securities Guarantee Agreement and the Indenture under the Trust
Indenture Act of 1939, as amended.
In connection herewith, we have examined, among other things, (i) the
Certificates of Trust of the Trusts, all filed with the Delaware Secretary of
State on November 21, 1995; (ii) the Declarations of Trust of the Trusts, all
dated as of November 21, 1995; (iii) the forms of Amended Declarations of Trust
of the Trusts, which will be entered into prior to the closing of the offering
of the Preferred Securities of each Trust described in the Registration
Statement and will supersede the Declarations of Trust; (iv) a form of the
Purchase Agreement to be entered into by each Trust, the Company and the
underwriters for the offering of the Preferred Securities to be offered by such
Trust (the "Underwriting Agreement"); (v) originals, certified copies or copies
otherwise identified to our satisfaction as being copies of originals, of the
Restated Certificate of Incorporation, as amended, and Bylaws, as amended, of
the Company; (vi) records of proceedings of the Company's Board of Directors,
including committees thereof, with respect to the filing of the Registration
Statement, the authorization of the Indenture and the Guarantees and related
matters; (vii) the Registration Statement; (viii) the form of Indenture and
First Supplemental Indenture filed as exhibits to the Registration Statement;
(ix) the form of Preferred Securities Guarantee Agreement with respect to the
Preferred Securities of each Trust filed as an exhibit to the Registration
Statement; and (x) such other documents, records, certificates of public
officials and questions of law as we deemed necessary or appropriate for the
purpose of this opinion. In rendering this opinion, we have relied, to the
extent we deem such reliance appropriate, on certificates of officers or
trustees, as appropriate, of the Company and the Trusts, respectively, as to
factual matters.
In rendering the opinions expressed herein, we have assumed (1) the
authenticity of all documents submitted to us as original documents and the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or reproduction copies, (2) that the signatures on all
documents examined by us are genuine, (3) that upon the execution of the
Indenture by the Debt Trustee such Indenture will be a valid and binding
obligation of the Debt Trustee and (4) that upon the execution of a Preferred
Securities Guarantee Agreement by the Preferred Securities Trustee such
Preferred Securities Guarantee Agreement will be a valid and binding obligation
of the Preferred Securities Trustee.
Based upon the foregoing, we are of the opinion that:
<PAGE>
January 23, 1996
Page 3
1. Each series of Subordinated Debt Securities, when (i) issued
under the Indenture (assuming (A) the due execution of the Indenture by the
Company and the Debt Trustee and (B) the creation of such series of
Subordinated Debt Securities in accordance with the provisions of Sections
2.01 and 2.02 of the Indenture), (ii) executed and authenticated in
accordance with the terms of the Indenture and (iii) delivered to and paid
for by a Trust as contemplated by the base prospectus included in the
Registration Statement, will be legal, valid and binding obligations of the
Company, except (x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other
laws affecting creditors' rights generally and (y) 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; and
2. The Guarantees issued with respect to the Preferred
Securities issued by each Trust, when (i) the Preferred Securities
Guarantee Agreement that sets forth the terms of such Guarantees are
executed by the Company and the Preferred Securities Trustee and (ii) such
Guarantees and the related Preferred Securities are delivered pursuant to
the Underwriting Agreement and paid for by the underwriters named therein
in accordance with the terms thereof, will constitute legal, valid and
binding obligations of the Company, enforceable in accordance with the
terms of the applicable Preferred Securities Guarantee Agreement, except
(a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws affecting
creditors' rights generally and (y) 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.
The opinions expressed herein are limited to the laws of the State of
New York, Delaware corporate law and the Federal laws of the United States of
America. The opinions expressed herein are rendered solely for your benefit and
may not be furnished or quoted to, or relied upon by, any other person, for any
purpose, without our prior written consent.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to us contained therein under the
heading "Legal Matters." In giving the foregoing consent, we do not admit that
we are in the category of persons whose
<PAGE>
January 23, 1996
Page 4
consent is required under Section 7 of the Securities Act or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
As you are aware, Jerome H. Kern, a partner of this Firm, is a
director of the Tele-Communications, Inc., a Delaware corporation which owns all
of the common stock of the Company.
Very truly yours,
/s/ Baker & Botts, L.L.P.
-------------------------
BAKER & BOTTS, L.L.P.
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF RICHARD LAYTON & FINGER]
January 22, 1996
TCI Communications Financing I
c/o TCI Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Re: TCI Communications Financing I
-----------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for TCI Communications,
Inc., a Delaware corporation ("TCI"), and TCI Communications Financing I, 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 Trust of the Trust, dated as of November
21, 1995, among TCI and the trustees of the Trust named therein;
(c) Amendment No. 1 to the Registration Statement (the
"Registration Statement") on Form S-3, including a preliminary Prospectus and
preliminary Prospectus Supplement (as so supplemented, the "Prospectus"),
relating to the ___% Trust Originated Preferred Securities of the Trust
representing preferred undivided beneficial interests in the
<PAGE>
TCI Communications Financing I
c/o TCI Communications, Inc.
January 22, 1996
Page 2
assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"), as proposed to be filed by TCI and the Trust with the
Securities and Exchange Commission on January 22, 1996; and
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into 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 (the "Trust Agreement"), attached as an exhibit to the
Registration Statement;
(e) A Certificate of Good Standing for the Trust, dated January
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 (e) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (e) 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 soley 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 a 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
<PAGE>
TCI Communications Financing I
c/o TCI Communications, Inc.
January 22, 1996
Page 3
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 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
Registration Statement. We have not participated in the preparation of the
Registration Statement 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 law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
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 may be obligated to make payments as set forth in the Trust Agreement.
<PAGE>
TCI Communications Financing I
c/o TCI Communications, Inc.
January 22, 1996
Page 4
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. 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 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
CDK/jmb
<PAGE>
[LETTERHEAD OF BAKER & BOTTS]
Exhibit 8
---------
January 23, 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 I,
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"). 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 contained in the Registration
Statement (the "Prospectus Supplement").
<PAGE>
TCI Communications, Inc.
January 23, 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 Registration Statement, including
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.
January 23, 1996
Page 3
2. The summary in the Registration Statement 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.
