-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L6yJu1hj1nGElMCk9YKFxDxQIERkg+l0bv18OqbOy7Mc5tqwZjbEwkb8d4E4iq4z tB4gZXa1g8rVMo1qVb9eZg== 0000940180-96-000629.txt : 19961202 0000940180-96-000629.hdr.sgml : 19961202 ACCESSION NUMBER: 0000940180-96-000629 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 27 FILED AS OF DATE: 19961127 SROS: NASD SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCI COMMUNICATIONS INC CENTRAL INDEX KEY: 0000096903 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 840588868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16985 FILM NUMBER: 96673727 BUSINESS ADDRESS: STREET 1: TERRACE TOWER II STREET 2: 5619 DTC PKWY CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3032675500 MAIL ADDRESS: STREET 1: TERRACE TOWER II STREET 2: 5619 DTC PKWY CITY: ENGLEWOOD STATE: CO ZIP: 80111 FORMER COMPANY: FORMER CONFORMED NAME: TELE COMMUNICATIONS INC DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCI COMMUNICATIONS FINANCING III CENTRAL INDEX KEY: 0001003824 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16985-01 FILM NUMBER: 96673728 BUSINESS ADDRESS: STREET 1: TERRANCE TOWER II STREET 2: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 BUSINESS PHONE: 3032675300 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCI COMMUNICATIONS FINANCING IV CENTRAL INDEX KEY: 0001003825 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16985-02 FILM NUMBER: 96673729 BUSINESS ADDRESS: STREET 1: TERRANCE TOWER II STREET 2: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 BUSINESS PHONE: 3032675300 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCI COMMUNICATIONS FINANCING V CENTRAL INDEX KEY: 0001026665 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16985-03 FILM NUMBER: 96673730 BUSINESS ADDRESS: STREET 1: TERRANCE TOWER II STREET 2: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 BUSINESS PHONE: 3032675300 MAIL ADDRESS: STREET 1: TERRACE TOWER II STREET 2: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TCI COMMUNICATIONS FINANCING VI CENTRAL INDEX KEY: 0001026666 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16985-04 FILM NUMBER: 96673731 BUSINESS ADDRESS: STREET 1: TERRANCE TOWER II STREET 2: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 BUSINESS PHONE: 3032675300 MAIL ADDRESS: STREET 1: TERRACE TOWER II STREET 2: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 S-3 1 FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 27, 1996 (REGISTRATION NO. 333- ) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------- TCI COMMUNICATIONS, INC. DELAWARE 84-0588868 TCI COMMUNICATIONS FINANCING III DELAWARE 84-6289177 TCI COMMUNICATIONS FINANCING IV DELAWARE 84-6289178 TCI COMMUNICATIONS FINANCING V DELAWARE APPLIED FOR TCI COMMUNICATIONS FINANCING VI DELAWARE APPLIED FOR (EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
-------------- 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, AND PRINCIPAL EXECUTIVE OFFICES) TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE FOR EACH REGISTRANT) -------------- COPIES TO: ROBERT W. MURRAY JR., ESQ. BAKER & BOTTS, L.L.P. 599 LEXINGTON AVENUE NEW YORK, NEW YORK 10022 -------------- 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] -------------- CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PROPOSED PROPOSED AGGREGATE MAXIMUM MAXIMUM TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF SECURITIES TO BE TO BE PRICE PER OFFERING REGISTRATION REGISTERED REGISTERED(1) UNIT(1)(2)(3) PRICE(1)(2)(3) FEE(1) - --------------------------------------------------------------------------------- Subordinated Debt Securities of TCI Communications, Inc. ................. TCI Communications Financing III Preferred Securities............ TCI Communications Financing IV Preferred Securities............ TCI Communications Financing V Preferred Securities............ TCI Communications Financing VI Preferred Securities............ $500,000,000 100% $500,000,000 $151,516 Guarantees of Preferred Securities of TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V and TCI Communications Financing VI by TCI Communications, Inc.(4)...............
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 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. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Footnotes to table on previous page) (1) Includes such indeterminate number of Preferred Securities of TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V and TCI Communications Financing VI and such indeterminate principal amount of Subordinated Debt Securities of TCI Communications, Inc. as may from time to time be issued at indeterminate prices. Subordinated Debt Securities may be issued and sold to TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V or TCI Communications Financing VI. Such Subordinated Debt Securities may later be distributed to the holders of Preferred Securities upon a termination of TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V or TCI Communications Financing VI and the distribution of the assets thereof. (2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457. The aggregate public offering price of the Preferred Securities of TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V and TCI Communications Financing VI and the Subordinated Debt Securities of TCI Communications, Inc. registered hereby will not exceed $500,000,000. (3) Exclusive of accrued interest and distributions, if any. (4) Includes the obligations of TCI Communications, Inc. under (i) the Amended Declaration of Trust of each of TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V and TCI Communications Financing VI, (ii) the Guarantees issued with respect to the Preferred Securities issued by such Trust, (iii) the Subordinated Debt Securities purchased by such Trust and the related Indenture, including the agreement of TCI Communications, Inc. (contained in each Amended Declaration of Trust and contained in the Supplemental Indenture) to pay all trust obligations other than the Preferred Securities and the Common Securities, all as described in the Base Prospectus and the Prospectus Supplement included in this Registration Statement. No separate consideration will be received for these obligations or for the Guarantees. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED NOVEMBER 27, 1996 PROSPECTUS SUPPLEMENT - --------------------- (TO PROSPECTUS DATED , 1996) PREFERRED SECURITIES TCI COMMUNICATIONS FINANCING III % TRUST PREFERRED SECURITIES (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY) GUARANTEED TO THE EXTENT SET FORTH HEREIN BY TCI COMMUNICATIONS, INC. ----------- The % trust preferred securities (the "Preferred Securities") offered hereby evidence preferred undivided beneficial interests in the assets of TCI Communications Financing III, a statutory business trust formed under the laws of the State of Delaware (the "Trust"). TCI Communications, Inc., a Delaware corporation (the "Company"), will directly or indirectly own all the common securities (the "Common Securities" and, together with the Preferred Securities, the (continued on next page) SEE "RISK FACTORS" COMMENCING ON PAGE S-6 OF THIS PROSPECTUS SUPPLEMENT FOR CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL. An application will be filed to list the Preferred Securities on the New York Stock Exchange, Inc. (the "New York Stock Exchange"). If such application is approved, trading of the Preferred Securities on the New York Stock Exchange is expected to commence within a 30-day period after the initial delivery of the Preferred Securities. See "Underwriting." ----------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE (1) COMMISSION (2) TRUST (3)(4) - -------------------------------------------------------------------------------- Per Preferred Security.......... $25.00 (3) $25.00 - -------------------------------------------------------------------------------- Total........................... $ (3) $
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Plus accrued distributions, if any, from , 199 . (2) The Company and the Trust have agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (3) 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 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." (4) Expenses of the offering which are payable by the Company are estimated to be $ . ----------- The Preferred Securities offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that delivery of the Preferred Securities will be made only in book- entry form through the facilities of The Depository Trust Company on or about , 199 . ----------- LEHMAN BROTHERS MERRILL LYNCH & CO. ----------- The date of this Prospectus Supplement is , 1996. (continued from previous page) "Trust Securities") representing common undivided beneficial interests in the assets of the Trust. The Trust exists for the exclusive purposes of issuing and selling the Trust Securities and investing the proceeds thereof in an equivalent principal amount of % Subordinated Deferrable Interest Notes due , 20 (the "Subordinated Debt Securities") of the Company. The Subordinated Debt Securities will be unsecured obligations of the Company and will be subordinate and junior in right of payment to certain other indebtedness of the Company, as described herein. Upon an event of default under the Declaration (as defined herein), the holders of the Preferred Securities will have a preference over the holder of the Common Securities with respect to payments in respect of distributions and payments upon liquidation, redemption and otherwise. Holders of the Preferred Securities are entitled to receive cumulative cash distributions at an annual rate of % of the liquidation amount of $25 per Preferred Security, accruing from , 199 and payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing , 199 ("distributions"). The distribution rate and the distribution and other payment dates for the Preferred Securities will correspond to the interest rate and interest and other payment dates on the Subordinated Debt Securities, which will be the sole assets of the Trust. As a result, if principal or interest is not paid on the Subordinated Debt Securities, no amounts will be paid on the Preferred Securities. The payment of distributions out of moneys held by the Trust, and payments on liquidation of the Trust or the redemption of Preferred Securities, as set forth below, are guaranteed by the Company (the "Preferred Securities Guarantee") if and to the extent the Trust has funds available therefor. The Company's obligations under the Preferred Securities Guarantee, taken together with its other obligations described herein, constitute a full and unconditional guarantee by the Company of payments due on the Preferred Securities. See "Effect of Obligations Under the Subordinated Debt Securities and the Preferred Securities Guarantee" and "Description of the Preferred Securities Guarantee." The obligations of the Company under the Preferred Securities Guarantee are subordinate and junior in right of payment to all other liabilities of the Company and will rank pari passu with the most senior preferred stock issued by the Company from time to time and with any guarantee that may be entered into by the Company in respect of any preferred stock of any subsidiary or affiliate of the Company. If the Company does not make principal or interest payments on the Subordinated Debt Securities, the Trust will not have sufficient funds to redeem or make distributions on the Preferred Securities, in which event the Preferred Securities Guarantee will not apply to such redemptions or distributions until the Trust has sufficient funds available therefor. The obligations of the Company under the Subordinated Debt Securities are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of the Company. The Senior Indebtedness of the Company aggregated approximately $9,234 million at September 30, 1996. In addition, because the Company is primarily a holding company, its obligations under the Preferred Securities Guarantee and the Subordinated Debt Securities will be effectively subordinated to all existing and future liabilities of its subsidiaries. At September 30, 1996, the subsidiaries of the Company had total debt (excluding debt owed to the Company) of approximately $5,257 million. The Company has the right to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period on the Subordinated Debt Securities, at any time, for up to 20 consecutive quarters (each an "Extension Period"). If interest payments are so deferred, distributions on the Preferred Securities will also be deferred. Despite such deferral, during an Extension Period distributions will continue to accrue with interest thereon (to the extent permitted by applicable law) at an annual rate of % per annum, compounded quarterly, and holders of Preferred Securities will be required to include deferred interest income in their gross income for United States federal income tax purposes in advance of receipt of the cash interest payments attributable to such deferred income. There could be multiple Extension Periods of varying lengths throughout the term of the Subordinated Debt Securities. See "Description of the Subordinated Debt Securities--Option to Extend Interest Payment Period," "Risk Factors--Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Original Issue Discount, Premium and Market Discount." In the event of any such deferral, the holders of the Preferred Securities do not have the right to appoint a special representative or trustee or otherwise act to protect their interests. S-2 The Subordinated Debt Securities are redeemable by the Company (in whole or in part) from time to time, on or after , 200 , or at any time in certain circumstances upon the occurrence of a Tax Event (as defined herein). If the Company redeems Subordinated Debt Securities, the Trust must redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so redeemed at $25 per Trust Security plus accrued and unpaid distributions thereon (the "Redemption Price") to the date fixed for redemption. See "Description of the Preferred Securities--Mandatory Redemption." The Preferred Securities will be redeemed upon maturity of the Subordinated Debt Securities. The Subordinated Debt Securities mature on , 20 . In addition, upon the occurrence of a Special Event (as defined herein) arising from a change in law or a change in legal interpretation, unless the Subordinated Debt Securities are redeemed in the limited circumstances described below, the Trust shall be terminated with the result that the Subordinated Debt Securities will be distributed to the holders of the Preferred Securities, on a pro rata basis, in lieu of any cash distribution. In the case of the occurrence of a Special Event that is a Tax Event, the Company will have the right in certain circumstances to redeem the Subordinated Debt Securities, which would result in the redemption by the Trust of the Trust Securities in the same amount on a pro rata basis. If the Subordinated Debt Securities are distributed to the holders of the Preferred Securities, the Company will use its best efforts to have the Subordinated Debt Securities listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. See "Description of the Preferred Securities--Special Event Redemption or Distribution" and "Description of the Subordinated Debt Securities." In the event of the voluntary or involuntary dissolution, winding-up or termination of the Trust, the holders of the Preferred Securities will be entitled to receive, for each Preferred Security, a liquidation amount of $25 plus accrued and unpaid distributions thereon (including interest, if any, thereon) to the date of payment, unless in connection with such dissolution, winding-up or termination the Subordinated Debt Securities are distributed to the holders of the Preferred Securities. See "Description of the Preferred Securities--Liquidation Distribution Upon Termination." The Company is a subsidiary of Tele-Communications, Inc. ("TCI"). See "The Company." The Company will be the sole obligor under the Subordinated Debt Securities and the Preferred Securities Guarantee and with respect to the other obligations of the Company described herein, and TCI has no obligation or liability, contingent or otherwise, to pay any amounts due pursuant to the Subordinated Debt Securities, the Preferred Securities Guarantee or the Preferred Securities. ---------------- IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. S-3 PROSPECTUS SUMMARY The following summary is qualified in its entirety by reference to the detailed information appearing elsewhere in this Prospectus Supplement and in the accompanying Prospectus. Reference is made to "Definitions" on page S-44 for the location in this Prospectus Supplement of the definitions of certain capitalized terms used herein. PREFERRED SECURITIES OFFERED % trust preferred securities evidencing preferred undivided beneficial interests in the assets of the Trust are offered hereby. Holders of the Preferred Securities are entitled to receive cumulative cash distributions at an annual rate of % of the liquidation amount of $25 per Preferred Security, accruing from , 199 and payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on , 199 . The distribution payable on , 199 , which will be calculated at the above rate and based on a period that is shorter than a full quarter, will be in the amount of $ per Preferred Security. The distribution rate and the distribution and other payment dates for the Preferred Securities will correspond to the interest rate and interest and other payment dates on the Subordinated Debt Securities, which will be the sole assets of the Trust. As a result, if principal or interest is not paid on the Subordinated Debt Securities, no amounts will be paid on the Preferred Securities. See "Description of the Preferred Securities." SUBORDINATED DEBT SECURITIES The Trust will invest the proceeds from the issuance of the Preferred Securities and Common Securities in an equivalent amount of % Subordinated Deferrable Interest Notes due , 20 of the Company. The Subordinated Debt Securities will be subordinate and junior in right of payment to all Senior Indebtedness of the Company. See "Description of the Subordinated Debt Securities--Subordination." PREFERRED SECURITIES GUARANTEE Payment of distributions out of moneys held by the Trust, and payments on liquidation of the Trust or the redemption of Preferred Securities, are guaranteed by the Company if and to the extent the Trust has funds available therefor. If the Company does not make principal or interest payments on the Subordinated Debt Securities, the Trust will not have sufficient funds to redeem or make distributions on the Preferred Securities, in which event the Preferred Securities Guarantee will not apply to such redemptions or distributions until the Trust has sufficient funds available therefor. The Company's obligations under the Preferred Securities Guarantee, taken together with its other obligations described herein, constitute a full and unconditional guarantee by the Company of payments due on the Preferred Securities. See "Effect of Obligations Under the Subordinated Debt Securities and the Preferred Securities Guarantee" and "Description of the Preferred Securities Guarantee." The obligations of the Company under the Preferred Securities Guarantee are subordinate and junior in right of payment to all other liabilities of the Company and will rank pari passu with the most senior preferred stock issued by the Company from time to time and with any guarantee that may be entered into by the Company in respect of any preferred stock of any subsidiary or affiliate of the Company. See "Risk Factors--Ranking of Obligations under Preferred Securities Guarantee and Subordinated Debt Securities" and "--Rights under the Preferred Securities Guarantee" and "Description of the Preferred Securities Guarantee." INTEREST DEFERRAL The Company has the right to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period on the Subordinated Debt Securities, at any time and from time to time, for up to 20 S-4 consecutive quarters. If interest payments on the Subordinated Debt Securities are so deferred, distributions on the Preferred Securities will also be deferred. During any deferral, distributions will continue to accrue with interest thereon compounded quarterly (to the extent permitted by law) as described herein. There could be multiple Extension Periods of varying lengths throughout the term of the Subordinated Debt Securities. During an Extension Period, holders of Preferred Securities will be required to include deferred interest income in their gross income in advance of receipt of the cash interest payments attributable thereto. See "Description of the Preferred Securities--Voting Rights," "Description of the Subordinated Debt Securities-- Option to Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--Original Issue Discount, Premium and Market Discount." MANDATORY REDEMPTION OF PREFERRED SECURITIES Unless previously redeemed pursuant to the optional or special redemption provisions described below, each of the outstanding Preferred Securities will be redeemed by the Trust, in cash, on , 20 , which is the maturity date of the Subordinated Debt Securities, at the Redemption Price, which is equal to (a) $25 per Preferred Security plus (b) accrued and unpaid distributions thereon to the date of redemption. See "Description of the Preferred Securities--Mandatory Redemption." OPTIONAL AND SPECIAL REDEMPTION The Subordinated Debt Securities are redeemable by the Company in whole or in part, from time to time, on or after , 200 , or at any time in certain circumstances upon the occurrence of a Tax Event, in each case at a price equal to (a) 100% of the principal amount of Subordinated Debt Securities to be redeemed plus (b) accrued and unpaid interest thereon to the date of redemption. If the Company redeems Subordinated Debt Securities, the Trust must redeem Trust Securities, including the Preferred Securities, having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so redeemed at the Redemption Price. See "Description of the Preferred Securities--Mandatory Redemption" and "--Special Event Redemption or Distribution." VOTING RIGHTS Holders of Preferred Securities will have limited voting rights and will not be entitled to vote to appoint, remove or replace, or to increase or decrease the number of, Company Trustees (as defined herein), which voting rights are vested exclusively in the holder of the Common Securities. See "Description of the Preferred Securities--Voting Rights." USE OF PROCEEDS The Trust will invest the proceeds from the sale of the Preferred Securities offered hereby in the Subordinated Debt Securities, the proceeds of which will be used by the Company to repay indebtedness outstanding under its commercial paper program. The weighted average interest rate of indebtedness outstanding under such commercial paper program as of November 25, 1996 was approximately 5.7632%. See "Use of Proceeds." LISTING An application will be filed to list the Preferred Securities on the New York Stock Exchange ("NYSE") under the symbol "TFI PrB." If such application is approved, trading of the Preferred Securities on the NYSE is expected to commence within a 30-day period after the initial delivery of the Preferred Securities. See "Underwriting." S-5 RISK FACTORS Prospective purchasers of Preferred Securities should carefully review the information contained in other sections of this Prospectus Supplement and in the accompanying Prospectus and should particularly consider the following matters. RANKING OF OBLIGATIONS UNDER PREFERRED SECURITIES GUARANTEE AND SUBORDINATED DEBT SECURITIES The Company's obligations under the Preferred Securities Guarantee are subordinate and junior in right of payment to all liabilities of the Company and pari passu with the most senior preferred stock issued by the Company from time to time and with any guarantee that may be entered into by the Company in respect of any preferred stock of any subsidiary or affiliate of the Company. The obligations of the Company under the Subordinated Debt Securities are subordinate and junior in right of payment to all present and future Senior Indebtedness (as defined herein) of the Company. No payment of principal of (including redemption payments), premium, if any, or interest on the Subordinated Debt Securities may be made if (a) any Senior Indebtedness of the Company is not paid when due and any applicable grace period with respect to such default has ended with such default not being cured or waived or ceasing to exist, or (b) the maturity of any Senior Indebtedness has been accelerated because of a default. At September 30, 1996, Senior Indebtedness of the Company aggregated approximately $9,234 million. In addition, because the Company is primarily a holding company, its obligations under the Preferred Securities Guarantee and the Subordinated Debt Securities will be effectively subordinated to all existing and future liabilities of its subsidiaries. At September 30, 1996, the subsidiaries of the Company had total debt (excluding debt owed to the Company) of approximately $5,257 million. See "Holding Company Structure" below. There are no terms in the Preferred Securities, the Subordinated Debt Securities or the Preferred Securities Guarantee that limit the Company's ability to incur additional indebtedness, including indebtedness that ranks senior to the Subordinated Debt Securities or the Preferred Securities Guarantee. See "Description of the Preferred Securities Guarantee" and "Description of the Subordinated Debt Securities--Subordination." Although the Company is a subsidiary of TCI, TCI will have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Subordinated Debt Securities, the Preferred Securities Guarantee or the Preferred Securities. RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE The Preferred Securities Guarantee guarantees to the holders of the Preferred Securities the payment of (i) any accrued and unpaid distributions which are required to be paid on the Preferred Securities, to the extent the Trust shall have funds available therefor, (ii) the Redemption Price, which includes all accrued and unpaid distributions to the date of the redemption, to the extent the Trust has funds available therefor, with respect to any Preferred Securities called for redemption by the Trust and (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (other than in connection with the distribution of Subordinated Debt Securities to the holders of Preferred Securities), 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 thereof, to the extent the Trust has funds available therefor, and (b) the amount of assets of the Trust remaining available for distribution to holders of Preferred Securities in liquidation of the Trust. Holders of the Preferred Securities have the right to proceed directly against the Company to enforce the Company's obligations to make payments under the Preferred Securities Guarantee, without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee (as defined herein) or any other person or entity. If the Company were to default in its obligation to pay amounts payable on the Subordinated Debt Securities, the Trust would lack available funds for the payment of distributions or amounts payable on redemption of the Preferred Securities or otherwise, and in such event holders of the Preferred Securities would not be able to rely upon the Preferred Securities Guarantee for payment of such amounts. Instead, holders of the Preferred Securities would rely on the enforcement by the Property Trustee (as defined herein) of its rights as registered holder of the Subordinated Debt Securities against the Company, pursuant to the terms of the Subordinated Debt Securities. See "Description of the Preferred Securities Guarantee--Status of the Preferred Securities Guarantee" and "Description of the Subordinated Debt Securities-- Subordination." The Declaration (as defined herein) provides that each holder of Preferred Securities by acceptance thereof agrees to the provisions of the Preferred Securities Guarantee and the Indenture (as defined herein). S-6 ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES If a Declaration Event of Default (as defined herein) occurs and is continuing, then the holders of Preferred Securities would rely on the enforcement by the Property Trustee of its rights as the holder of the Subordinated Debt Securities against the Company. In addition, the holders of a majority in aggregate liquidation amount of the Preferred Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Subordinated Debt Securities. If a Declaration Event of Default occurs that results from the failure of the Company to pay principal of or interest on the Subordinated Debt Securities when due, during the continuance of such an event of default a holder of Preferred Securities may institute a legal proceeding directly against the Company to obtain payment of such principal or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The holders of Preferred Securities will not be able to exercise directly against the Company any other remedy available to the Property Trustee unless the Property Trustee first fails to do so. See "Description of the Preferred Securities--Voting Rights." OPTION TO EXTEND INTEREST PAYMENT PERIOD The Company has the right under the Indenture to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period at any time, and from time to time, on the Subordinated Debt Securities. As a consequence of such an extension, quarterly distributions on the Preferred Securities would be deferred (but despite such deferral would continue to accrue with interest thereon compounded quarterly) by the Trust during any such extended interest payment period. Such right to extend the interest payment period for the Subordinated Debt Securities is limited to a period not exceeding 20 consecutive quarters for any such extension. In the event that the Company exercises this right to defer payments of interest, 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 Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the 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 TCI. Prior to the termination of any such Extension Period, the Company may further defer payments of interest by further extending the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the maturity of the Subordinated Debt Securities. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new Extension Period, as if no Extension Period had previously been declared, subject to the above requirements. See "Description of the Preferred Securities--Distributions" and "--Voting Rights" and "Description of the Subordinated Debt Securities--Option to Extend Interest Payment Period." Should the Company exercise its right to defer payments of interest by extending the interest payment period, each holder of Preferred Securities will continue to accrue income (as original issue discount) for United States federal income tax purposes in respect of the deferred interest allocable to its Preferred Securities, which will be allocated, but not distributed, to holders of record of Preferred Securities. As a result, holders of Preferred Securities will recognize income for United States federal income tax purposes in advance of the receipt of cash and will not receive cash from the Trust related to such income if such holder disposes of its Preferred Securities prior to the record date for the date on which distributions of such amounts are made. The Company has no current intention of exercising its right to defer payments of interest by extending the interest payment period on the Subordinated Debt Securities. However, should the Company determine to exercise such right in the future, the market price of the Preferred Securities is likely to be affected. A holder that disposes of its Preferred Securities during an Extension Period, therefore, might not receive the same return on its investment as a holder that continues to hold its Preferred Securities. In addition, as a result of the existence of the Company's right to S-7 defer interest payments, the market price of the Preferred Securities (which represent a preferred undivided beneficial interest in the Subordinated Debt Securities) may be more volatile than other securities on which original issue discount accrues that are not subject to such right. See "Certain Federal Income Tax Consequences--Original Issue Discount, Premium and Market Discount." SPECIAL EVENT DISTRIBUTION Upon the occurrence of a Special Event, the Trust will be terminated, except in the limited circumstances described below, with the result that the Subordinated Debt Securities would be distributed to the holders of the Trust Securities in connection with the liquidation of the Trust. In the case of a Special Event that is a Tax Event, in certain circumstances the Company shall have the right to redeem the Subordinated Debt Securities, in whole or in part, in which event the Trust will redeem the Trust Securities on a pro rata basis to the same extent as the Subordinated Debt Securities are redeemed. See "Description of the Preferred Securities--Special Event Redemption or Distribution" and "Certain Federal Income Tax Consequences." Under current United States federal income tax law, a distribution of the Subordinated Debt Securities upon the termination of the Trust would not be a taxable event to holders of the Preferred Securities. Upon occurrence of a Tax Event, however, a termination of the Trust in which holders of the Preferred Securities receive cash would be a taxable event to such holders. See "Certain Federal Income Tax Consequences--Receipt of Subordinated Debt Securities or Cash upon Liquidation of the Trust." There can be no assurance as to the market prices for the Preferred Securities, or the Subordinated Debt Securities that may be distributed in exchange for Preferred Securities if a termination of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, or the Subordinated Debt Securities that the investor may receive on dissolution and liquidation of the Trust, may trade at a discount to the price that the investor paid to purchase the Preferred Securities offered hereby. Because holders of Preferred Securities may receive Subordinated Debt Securities upon the occurrence of a Special Event, prospective purchasers of Preferred Securities are also making an investment decision with regard to the Subordinated Debt Securities and should carefully review all the information regarding the Subordinated Debt Securities and the Company contained herein. See "Description of the Preferred Securities--Special Event Redemption or Distribution" and "Description of the Subordinated Debt Securities." PROPOSED TAX LAW CHANGES On December 7, 1995, the U.S. Treasury Department proposed a series of tax law changes that would, among other things, prevent companies from deducting interest on debt instruments with a maturity of more than 40 years and on instruments with a maximum term of more than 20 years which are not shown as indebtedness on the consolidated balance sheet of the issuer. Either of these proposals, if enacted, would prevent the Company from deducting interest paid on the Subordinated Debt Securities. The Company cannot predict whether the proposed tax law changes will become law. However, the Chairmen of the House Ways and Means and Senate Finance Committees issued a joint statement on March 29, 1996 stating that the effective date of these proposals, if enacted, would be no earlier than the date of appropriate Congressional action. In addition, subsequent to the publication of such joint statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials concurring with the view expressed in such joint statement. If legislation is enacted limiting, in whole or in part, the deductibility by the Company of interest on the Subordinated Debt Securities for United States federal income tax purposes, such enactment would be a Tax Event. Under certain circumstances following a Tax Event, the Company may cause the Subordinated Debt Securities to be redeemed, in which event the Trust would redeem the Trust Securities. The December 7, 1995 proposed tax law changes would not alter the United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities. See "Certain Federal Income Tax Consequences." LIMITED VOTING RIGHTS Holders of Preferred Securities will have limited voting rights, primarily in connection with directing the activities of the Property Trustee as the holder of the Subordinated Debt Securities. Such holders will not be entitled to vote to appoint, remove or replace, or to increase or decrease the number of, Company Trustees, which voting rights are vested exclusively in the Company as the holder of the Common Securities. See "Description of the Preferred Securities--Voting Rights." S-8 TRADING PRICE OF PREFERRED SECURITIES The Preferred Securities may trade at a price that does not fully reflect the value of accrued but unpaid interest with respect to the underlying Subordinated Debt Securities. A holder who disposes of his Preferred Securities between record dates for payments of distributions thereon will be required to include accrued but unpaid interest on the Subordinated Debt Securities through the date of disposition in income as ordinary income (i.e., OID (as defined herein)), and to add such amount to his adjusted tax basis in his pro rata share of the underlying Subordinated Debt Securities deemed disposed of. To the extent the selling price is less than the holder's adjusted tax basis (which will include, in the form of OID, all accrued but unpaid interest), a holder will recognize a capital loss. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. See "Certain Federal Income Tax Consequences--Original Issue Discount, Premium and Market Discount" and "--Sale of Preferred Securities." HOLDING COMPANY STRUCTURE The Trust's ability to make distributions and other payments on the Preferred Securities is solely dependent upon the Company's making interest and other payments on the Subordinated Debt Securities. The Company is a holding company and its assets consist almost entirely of investments in its subsidiaries. A substantial portion of the consolidated liabilities have been incurred by its subsidiaries. Therefore, the Company's rights and the rights of its creditors, including holders of Subordinated Debt Securities, to participate in the distribution of assets of any subsidiary upon the latter's liquidation or reorganization will be subject to prior claims of the subsidiary's creditors, including trade creditors, except to the extent that the Company may itself be a creditor with recognized claims against the subsidiary (in which case the claims of the Company would still be subject to the prior claims of any secured creditor of such subsidiary and of any holder of indebtedness of such subsidiary that is senior to that held by the Company). Accordingly, the holders of Subordinated Debt Securities may be effectively subordinated to such claims. At September 30, 1996, the subsidiaries of the Company had total debt (excluding debt owed to the Company) of approximately $5,257 million. The Company's ability to service its indebtedness, including the Subordinated Debt Securities, and to perform under the Preferred Securities Guarantee, is dependent upon the earnings of the Company's subsidiaries and the distribution or other payment of such earnings to the Company in the form of dividends, loans or advances, payment or reimbursement for management fees and expenses, and repayment of loans and advances from the Company. The subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the Subordinated Debt Securities or the Preferred Securities Guarantee or to make any funds available therefor, whether by dividends, loans or other payments. The payment of dividends or the making of loans and advances to the Company by its subsidiaries may be subject to statutory or regulatory restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business considerations. Further, certain of the Company's subsidiaries are subject to loan agreements that prohibit or limit the transfer of funds by such subsidiaries to the Company in the form of loans, advances or dividends and require that such subsidiaries' indebtedness to the Company be subordinate to the indebtedness under such loan agreements. The amount of net assets of subsidiaries subject to such restrictions exceeds the Company's consolidated net assets. LOSSES INCURRED BY THE COMPANY The Company incurred net losses of $120 million and $5 million for the years ended December 31, 1995 and 1993, respectively, and net losses of $260 million and $50 million for the nine months ended September 30, 1996 and 1995, respectively. The Company had net earnings of $94 million for the year ended December 31, 1994. Notwithstanding the losses it has incurred, the Company has been able to, and expects to continue to be able to, satisfy its debt service and other obligations as and when they become due. The Company's operating cash flow (operating income before depreciation, amortization and other non- cash credits or charges) ($2,043 million, $1,801 million and $1,858 million for the years ended December 31, 1995, 1994 and 1993, respectively, and $1,642 million and $1,541 million for the nine months ended September 30, 1996 and 1995, respectively) has S-9 historically been sufficient to cover its interest expense ($962 million, $777 million and $731 million for the years ended December 31, 1995, 1994 and 1993, respectively, and $760 million and $713 million for the nine months ended September 30, 1996 and 1995, respectively). The Company's interest coverage ratios for the years ended December 31, 1995, 1994 and 1993 were 212%, 232% and 254%, respectively, and for each of the nine month periods ended September 30, 1996 and 1995 were 216%. Operating cash flow is a measure of value and borrowing capacity within the cable television industry and is not intended to be a substitute for cash flows provided by operating activities, a measure of performance prepared in accordance with generally accepted accounting principles, and should not be relied upon as such. Operating cash flow, as defined, does not take into consideration substantial costs of doing business, such as interest expense, and should not be considered in isolation to other measures of performance. Another measure of liquidity is net cash provided by operating activities as reflected in the Company's consolidated statements of cash flows. Net cash provided by operating activities ($1,263 million, $1,142 million and $1,251 million for the years ended December 31, 1995, 1994 and 1993, respectively, and $783 million and $854 million for the nine months ended September 30, 1996 and 1995, respectively) reflects net cash from the operations of the Company available for the Company's liquidity needs after taking into consideration the aforementioned substantial costs of doing business not reflected in operating cash flow. Amounts expended by the Company for its investing activities exceed net cash provided by operating activities. CREDIT RATING ON DEBT On October 18, 1996, Standard & Poor's Securities, Inc. ("Standard & Poor's"), a national statistical rating agency, issued a press release stating that the Company's senior debt would be placed on its CreditWatch with negative implications. The Company's senior debt is currently rated BBB- by Standard & Poor's (the last level of investment grade). A downgrade by Standard & Poor's of the Company's senior debt would lower such debt to the first level below investment grade. The action described above and any downgrade which may occur in the future may adversely affect the Company's overall cost of future borrowings. On November 8, 1996, Standard & Poor's held a conference call with investors about the Company's debt during which Standard & Poor's stated that before making a determination about the Company's debt ratings, it would wait to review the Company's plan to lower the ratio of debt to operating cash flow. The Company's debt is also rated by Moody's Investors Service, Inc., Fitch Investors Service, L.P. and Duff & Phelps Credit Rating Co. Such rating agencies have not changed (or indicated to the Company that they may change) their rating of the Company's debt. THE COMPANY The Company is principally engaged in the construction, acquisition, development, ownership and operation of cable television systems. The Company is the largest provider of basic cable television services in the United States based on the number of basic subscribers served by the Company and its subsidiaries and affiliates at September 30, 1996. The Company is a subsidiary of Tele-Communications, Inc. ("TCI") which, in addition to the operations of the Company, is engaged in the provision of satellite-delivered programming services to various distribution media, principally cable television systems. In addition, TCI has interests in cable and telecommunications operations and television programming in certain international markets and has investments in companies and joint ventures involved in developing and providing programming for new television and telecommunications technologies. TCI will have no obligation or liability, contingent or otherwise, under the Subordinated Debt Securities, the Preferred Securities Guarantees or the Preferred Securities. The Company is a Delaware corporation incorporated in 1968. Its executive offices are located at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. THE TRUST The Trust is a statutory business trust formed under Delaware law pursuant to the filing of a certificate of trust with the Delaware Secretary of State on November 21, 1995. The Trust's business is defined in a S-10 Declaration of Trust, dated as of November 21, 1995, executed by the Company, as sponsor (the "Sponsor"), and the Company Trustees as of that date. The Declaration of Trust will be amended and restated in its entirety (as so amended and restated, the "Declaration") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus form a part. The Declaration will be qualified as an indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of the Preferred Securities, the purchasers thereof will own all of the Preferred Securities. See "Description of the Preferred Securities--Book-Entry Issuance Only--The Depository Trust Company." The Company will directly or indirectly acquire all of the Common Securities in an aggregate liquidation amount equal to 3% of the total capital of the Trust. The Trust exists for the exclusive purposes of (i) issuing and selling the Trust Securities, representing undivided beneficial interests in the assets of the Trust, (ii) investing the gross proceeds of the Trust Securities in the Subordinated Debt Securities and (iii) engaging in only those other activities necessary or incidental thereto. The Trust has a term of approximately 55 years, but may terminate earlier as provided in the Declaration. The Trust's business and affairs will be conducted by the trustees (the "Company Trustees") appointed by the Company, as holder of the Common Securities. The duties and obligations of the Company Trustees shall be governed by the Declaration, the Trust Indenture Act and the Trust Act (as defined below). Pursuant to the Declaration, the number of Company Trustees will initially be five. Three of the Company Trustees (the "Regular Trustees") will be persons who are employees or officers of, or affiliated with, the Company. A fourth trustee will be a financial institution unaffiliated with the Company that will serve as property trustee (the "Property Trustee") under the Declaration and as indenture trustee for purposes of the Trust Indenture Act. The Bank of New York will act as the Property Trustee until removed or replaced by the holder of the Common Securities. The Bank of New York will also act as indenture trustee under the Preferred Securities Guarantee (the "Preferred Guarantee Trustee"). See "Description of the Preferred Securities Guarantee." The fifth trustee will be a financial institution or an affiliate thereof which maintains a principal place of business in the State of Delaware (the "Delaware Trustee") and meets any other requirements of applicable law. The Bank of New York (Delaware) will act as the Delaware Trustee. The Property Trustee will hold title to the Subordinated Debt Securities for the benefit of the Trust and holders of the Trust Securities and will have the power to exercise all rights, powers and privileges under the Indenture (as defined herein) as the holder of the Subordinated Debt Securities. In addition, the Property Trustee will maintain exclusive control of a segregated non-interest bearing bank account (the "Property Account") to hold all payments made in respect of the Subordinated Debt Securities for the benefit of the Trust and holders of the Trust Securities. The Property Trustee will make payments of distributions and payments on liquidation, redemption and otherwise to the holders of the Trust Securities out of funds from the Property Account. The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the holders of the Preferred Securities. The Company, as the holder of all the Common Securities, will have the right to appoint, remove or replace any Company Trustee and to increase or decrease the number of Company Trustees, provided that the number of Company Trustees shall be at least three, a majority of which shall be Regular Trustees. The Company will pay all fees, expenses, debts and obligations (other than the Trust Securities) related to the Trust and the offering of the Trust Securities. The Company has agreed that the Property Trustee and any person to whom such fees, expenses, debts and obligations are owed will have the right to enforce the Company's obligations in respect of such fees, expenses, debts and obligations directly against the Company without first proceeding against the Trust. See "Description of the Preferred Securities-- Expenses and Taxes." The rights of the holders of the Preferred Securities, including economic rights, rights to information and voting rights, are as set forth in the Declaration, the Delaware Business Trust Act, as amended (the "Trust Act"), and the Trust Indenture Act. See "Description of the Preferred Securities." The principal place of business of the Trust shall be c/o TCI Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. S-11 SELECTED FINANCIAL DATA OF THE COMPANY The following table sets forth selected historical financial data for the Company for each of the five fiscal years in the period ended December 31, 1995 and for the nine months ended September 30, 1996 and 1995. The selected financial data for each of the five fiscal years in the period ended December 31, 1995 are derived from the audited consolidated financial statements of the Company. The selected financial data for the interim periods are derived from the unaudited consolidated financial statements of the Company, which have been prepared on the same basis as the Company's audited consolidated financial statements and, in the opinion of management, contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations of the Company for those periods. The following information is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto of the Company incorporated by reference herein.
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, -------------- -------------------------------------- 1996 1995 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ ------ ------ (IN MILLIONS, EXCEPT RATIO AMOUNTS) SUMMARY OF OPERATIONS DATA: Revenue................ $4,554 $3,741 $5,118 $4,318 $4,153 $3,574 $3,214 Operating income....... 615 660 803 818 916 864 674 Earnings (loss) from: Continuing operations.. (260) (50) (120) 94 (5) 8 (77) Discontinued operations............ -- -- -- -- -- (15) (19) ------ ------ ------ ------ ------ ------ ------ (260) (50) (120) 94 (5) (7) (96) Dividend requirement on redeemable preferred stocks................ (7) -- -- -- (2) (15) -- ------ ------ ------ ------ ------ ------ ------ Net earnings (loss) attributable to common stockholders.......... $ (267) $ (50) $ (120) $ 94 $ (7) $ (22) $ (96) ====== ====== ====== ====== ====== ====== ====== OTHER DATA: Ratio of earnings to combined fixed charges and preferred stock dividends(1).......... -- -- -- 1.21x 1.22x 1.00x -- Operating income before depreciation, amortization and non- cash operating expenses(2)........... $1,642 $1,541 $2,043 $1,801 $1,858 $1,637 $1,430 Consolidated basic cable subscribers..... 13.9 12.2 12.4 11.1 10.3 9.9 8.9
DECEMBER 31, SEPTEMBER 30, --------------------------------------- 1996 1995 1994 1993 1992 1991 ------------- ------- ------- ------- ------- ------- (IN MILLIONS) SUMMARY BALANCE SHEET DATA: Property and equipment, net.................... $ 8,368 $ 6,988 $ 5,579 $ 4,935 $ 4,562 $ 4,081 Franchise costs, net.... 14,624 11,563 9,297 9,197 9,300 8,104 Net assets of discontinued operations............. -- -- -- -- -- 242 Total assets............ 25,305 20,364 15,880 16,527 16,315 15,169 Debt.................... 14,491 12,635 10,712 9,900 10,285 9,455 Stockholders' equity.... 1,822 1,729 683 2,116 1,728 1,571 Shares outstanding (net of treasury shares)(3): Class A Common Stock.... 1 1 1 403 382 370 Class B Common Stock.... -- -- -- 47 48 49
- -------- (1) The ratio of earnings to combined fixed charges and preferred stock dividends of the Company was 1.21, 1.22, and 1.00 for the years ended December 31, 1994, 1993 and 1992, respectively. The ratio of earnings to combined fixed charges and preferred stock dividends of the Company was less than 1.00 for the years ended December 31, 1995 and 1991, and for the nine months ended September 30, 1996 and 1995; thus, earnings available for combined fixed charges and preferred stock dividends were inadequate to cover combined fixed charges and preferred stock dividends for such periods. The amounts of the coverage deficiencies were $170 million and $177 million for the years ended December 31, 1995 and 1991, respectively, and $388 million and $63 million for the nine months ended September 30, 1996 and 1995, respectively. For the ratio calculations, earnings available for combined fixed charges and preferred stock dividends consists of earnings (losses) before income taxes plus fixed charges (minus capitalized interest), distributions from and losses of less than 50%-owned affiliates with debt not guaranteed by the Company (footnotes continued on following page) S-12 (footnotes continued from preceding page) (net of earnings not distributed of less than 50%-owned affiliates), minority interests in earnings (losses) of consolidated subsidiaries, the elimination of preferred stock dividend requirements of consolidated subsidiaries to 50%-owned affiliates, and preferred stock dividend requirements of 50%-owned affiliates, other than amounts to the Company. Combined fixed charges and preferred stock dividends consist of (i) interest (including capitalized interest) on debt, including interest of less than 50%-owned affiliates with debt guaranteed by the Company, (ii) the elimination of interest of consolidated subsidiaries to 50%-owned affiliates, (iii) the Company's proportionate share of interest of 50%-owned affiliates, (iv) that portion of rental expense the Company believes to be representative of interest (one-third of rental expense), (v) amortization of debt expense, (vi) that portion of minority interests in earnings (losses) of consolidated subsidiaries that represent the amount of pretax earnings that would be required to cover preferred stock dividend requirements of consolidated subsidiaries, (vii) that portion of the Company's earnings (losses) that represent the amount of pretax earnings that would be required to cover preferred stock dividend requirements of the Company, (viii) the elimination of preferred stock dividend requirements of consolidated subsidiaries to 50%-owned affiliates, and (ix) the preferred stock dividend requirements of 50%-owned affiliates, other than amounts to the Company. The Company has guaranteed the debt of certain less than 50%- owned affiliates and certain other entities in which it has an interest. Fixed charges of $5 million, $5 million, $14 million, $3 million and $1 million relating to such guarantees for the years ended December 31, 1995, 1994, 1993, 1992 and 1991, respectively, and fixed charges of $3 million and $3 million relating to such guarantees for the nine months ended September 30, 1996 and 1995, respectively, have not been included in fixed charges. (2) Operating income before depreciation, amortization and non-cash operating expenses should not be considered as an alternative to net income or to cash flows provided by operating activities or to any other measure of performance or liquidity as an indicator of an entity's operating performance. (3) On August 4, 1994, each 500.3735 shares of Class A Common Stock and 500.3735 shares of Class B Common Stock issued and outstanding on that date were reclassified and changed into one share of Class A Common Stock and one share of Class B Common Stock, respectively. S-13 CAPITALIZATION OF THE COMPANY The following table sets forth the unaudited consolidated capitalization of the Company at September 30, 1996, and as adjusted to reflect the offering of the Preferred Securities and the application of the estimated net proceeds to repay indebtedness outstanding under the Company's commercial paper program as set forth under "Use of Proceeds." The following should be read in conjunction with the Company's consolidated financial statements and the notes thereto incorporated by reference herein.
SEPTEMBER 30, 1996 ----------------------- AS AS REPORTED ADJUSTED --------- --------- (IN MILLIONS) Total Debt........................................... $ 14,491 $ --------- -------- Minority interests in equity of consolidated subsidiaries........................................ 821 821 Redeemable preferred stock........................... 232 232 Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debt securities of the Company(1)...... 1,000(1) (2) --------- -------- Stockholders' equity: Class A Common Stock............................... 1 1 Class B Common Stock............................... -- -- Additional paid-in capital......................... 3,679 3,679 Unrealized holding gains for available-for-sale securities........................................ 4 4 Accumulated deficit................................ (630) (630) Investment in Tele-Communications, Inc. ........... (1,143) (1,143) Due from Tele-Communications, Inc.................. (89) (89) --------- -------- Total stockholders' equity........................ 1,822 1,822 --------- -------- Total capitalization............................. $ 18,366 $ ========= ========
- -------- (1) On January 29, 1996, TCI Communications Financing I, a Delaware business trust ("Trust I") sponsored by the Company, issued preferred securities with an aggregate liquidation amount of $500 million. The sole asset of Trust I is $515.5 million principal amount of 8.72% Subordinated Deferrable Interest Notes of the Company due January 31, 2045. Upon redemption of such debt, the preferred securities of Trust I will be mandatorily redeemable. On May 17, 1996, TCI Communications Financing II, a Delaware business trust ("Trust II") sponsored by the Company, issued preferred securities with an aggregate liquidation amount of $500 million. The sole asset of Trust II is $515.5 million principal amount of 10% Subordinated Deferrable Interest Notes of the Company due May 31, 2045. Upon redemption of such debt, the preferred securities of Trust II will be mandatorily redeemable. (2) As described in this Prospectus Supplement, the sole asset of the Trust will be the % Subordinated Deferrable Interest Notes due , 20 of the Company with a principal amount of $ million. Upon redemption of such debt, the Preferred Securities will be mandatorily redeemable. S-14 ACCOUNTING TREATMENT The financial statements of the Trust will be consolidated with the Company's financial statements, with the Preferred Securities shown on the Company's consolidated financial statements as Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely subordinated debt securities of the Company. The sole asset of the Trust will be the % Subordinated Deferrable Interest Notes due , 20 in the principal amount of $ million, which will eliminate upon consolidation of the Trust. USE OF PROCEEDS The proceeds of the sale of the Preferred Securities will be invested by the Trust in the Subordinated Debt Securities of the Company. The Company will use the net proceeds from the sale of such Subordinated Debt Securities to repay indebtedness outstanding under its commercial paper program. The weighted average interest rate of indebtedness outstanding under such commercial paper program as of November 25, 1996 was approximately 5.7632%. DESCRIPTION OF THE PREFERRED SECURITIES The Preferred Securities will be issued pursuant to the terms of the Declaration. The Declaration will be qualified as an indenture under the Trust Indenture Act. The Property Trustee will act as the indenture trustee for purposes of compliance with the provisions of the Trust Indenture Act. The terms of the Preferred Securities will include those stated in the Declaration and those made part of the Declaration by the Trust Act and the Trust Indenture Act. The following summary of the principal terms and provisions of the Preferred Securities does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Declaration (a copy of which is filed as an exhibit to the Registration Statement, of which this Prospectus Supplement and the accompanying Prospectus are a part), the Trust Act and the Trust Indenture Act. GENERAL The Declaration authorizes the Regular Trustees, on behalf of the Trust, to issue the Preferred Securities, which represent preferred undivided beneficial interests in the assets of the Trust, and the Common Securities, which represent common undivided beneficial interests in the assets of the Trust. All of the Common Securities will be owned directly or indirectly by the Company. The Common Securities rank pari passu, and payments will be made thereon on a pro rata basis with the Preferred Securities, except that upon the occurrence and during the continuation of a Declaration Event of Default, the rights of the holders of the Common Securities to receive payment of periodic distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights to payment of the holders of the Preferred Securities. The Declaration does not permit the issuance by the Trust of any securities other than the Trust Securities or the incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the Property Trustee will own and hold the Subordinated Debt Securities for the benefit of the Trust and the holders of the Trust Securities. The payment of distributions out of money held by the Trust, and payments upon redemption of the Preferred Securities or liquidation of the Trust, are guaranteed by the Company to the extent described under "Description of the Preferred Securities Guarantee." The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the holders of the Preferred Securities. The Preferred Securities Guarantee does not cover payment of distributions on the Preferred Securities when the Trust does not have sufficient available funds in the Property Account to make such distributions. DISTRIBUTIONS Distributions on the Preferred Securities will be fixed at a rate per annum of % of the stated liquidation amount of $25 per Preferred Security (equivalent to $ per Preferred Security). Distributions in arrears for S-15 more than one quarter will bear interest at the rate of % per annum compounded quarterly (to the extent permitted by applicable law). The term "distributions" as used herein includes any such interest payable unless otherwise stated. Distributions on the Preferred Securities will be cumulative, will accrue from , 199 , and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year to the holders of record on the applicable record date, commencing , 199 , when, as and if available for payment by the Property Trustee, except as otherwise described below. The amount of distributions payable for any full quarterly period will be computed on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full quarter, on the basis of the actual number of days elapsed in such a 90-day quarter. The Company has the right under the Indenture to defer payments of interest on the Subordinated Debt Securities by extending the interest payment period from time to time on the Subordinated Debt Securities which, if exercised, would defer quarterly distributions on the Preferred Securities (though such distributions would continue to accrue interest since interest would continue to accrue on the Subordinated Debt Securities) during any such extended interest payment period. In the event that the Company exercises this right, 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 Subordinated Debt Securities, and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing; provided, however, that the foregoing restrictions do not apply to any dividend, redemption, liquidation, 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 TCI. Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period, together with all such previous and further extensions thereof, may not exceed 20 consecutive quarters or extend beyond the maturity of the Subordinated Debt Securities. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new Extension Period as if no Extension Period had previously been declared, subject to the above requirements. See "--Voting Rights" below and "Description of the Subordinated Debt Securities--Interest" and "--Option to Extend Interest Payment Period." If distributions are deferred, the deferred distributions and accrued interest thereon shall be paid to holders of record of the Preferred Securities, if funds are available therefor, as they appear on the books and records of the Trust on the record date next following the termination of such Extension Period. Distributions on the Preferred Securities must be paid on the dates payable to the extent that the Trust has funds available for the payment of such distributions in the Property Account. The Trust's funds available for distribution to the holders of the Preferred Securities will be limited to payments received under the Subordinated Debt Securities. See "Description of the Subordinated Debt Securities." The payment of distributions out of moneys held by the Trust is guaranteed by the Company to the extent set forth under "Description of the Preferred Securities Guarantee." Distributions on the Preferred Securities will be payable to the holders thereof as they appear on the books and records of the Trust on the relevant record dates, which, as long as the Preferred Securities remain in book-entry only form, will be one Business Day (as defined herein) prior to the relevant payment dates, which payment dates correspond to the interest payment dates on the Subordinated Debt Securities. Such distributions will be paid through the Property Trustee, who will hold amounts received in respect of the Subordinated Debt Securities in the Property Account for the benefit of the Trust and the holders of the Trust Securities. Subject to any applicable laws and regulations and the provisions of the Declaration, each such payment will be made as described under "--Book-Entry Only Issuance--The Depository Trust Company" below. In the event the Preferred Securities shall not continue to remain in book-entry only form, the Regular Trustees shall have the right to select relevant record dates which shall be at least one Business Day, but less than 60 Business Days, prior to the relevant payment dates. In the event that any date on which distributions are to be made on the S-16 Preferred Securities is not a Business Day, then payment of the distributions 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. A "Business Day" shall mean any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close. MANDATORY REDEMPTION The Subordinated Debt Securities will mature on , 20 and may be redeemed, in whole or in part, at any time on or after , 200 , or at any time in certain circumstances upon the occurrence of a Tax Event. Upon the repayment of the Subordinated Debt Securities, whether at maturity or upon acceleration, redemption or otherwise, the proceeds from such repayment or payment shall simultaneously be applied to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so repaid or redeemed at the Redemption Price; provided, that except in the case of payments upon maturity, holders of Trust Securities shall be given not less than 30 nor more than 60 days notice of such redemption. See "Description of the Subordinated Debt Securities." In the event that fewer than all of the outstanding Preferred Securities are to be redeemed, the Preferred Securities will be redeemed pro rata as described under "--Book-Entry Only Issuance--The Depository Trust Company" below. SPECIAL EVENT REDEMPTION OR DISTRIBUTION A "Tax Event" means that the Regular Trustees shall have received an opinion from independent tax counsel experienced in such matters (a "Dissolution Tax Opinion") to the effect that, on or after the date of this Prospectus Supplement, as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority, in each case which amendment or change is enacted, promulgated, issued or announced or which interpretation is issued or announced or which action is taken, on or after the date of this Prospectus Supplement, there is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date thereof, subject to United States federal income tax with respect to interest accrued or received on the Subordinated Debt Securities, (ii) interest payable to the Trust on the Subordinated Debt Securities is not, or will not be within 90 days of the date thereof, deductible in whole or in part by the Company for United States federal income tax purposes or (iii) the Trust is, or will be within 90 days of the date thereof, subject to more than a de minimis amount of other taxes, duties or other governmental charges, which change or amendment becomes effective on or after the date of this Prospectus Supplement. An "Investment Company Event" means that the Regular Trustees shall have received an opinion from independent counsel experienced in practice under the 1940 Act (as hereinafter defined) to the effect that, as a result of the occurrence of a change in law or regulation or a written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an "investment company" which is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law becomes effective on or after the date of this Prospectus Supplement. If, at any time, a Tax Event or an Investment Company Event (each, as defined above, a "Special Event") shall occur and be continuing, the Trust shall, except in the circumstances described below, be terminated and dissolved with the result that Subordinated Debt Securities, with an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accrued and unpaid distributions on, the Trust Securities, would be distributed to the holders of the Trust Securities, in liquidation of such holders' interests in the Trust on a pro rata basis, within 90 S-17 days following the occurrence of such Special Event; provided, however, that in the case of the occurrence of a Tax Event, as a condition of such termination, dissolution and distribution, the Regular Trustees shall have received an opinion from 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 neither the Trust nor the holders of the Trust Securities will recognize any gain or loss for United States federal income tax purposes as a result of such termination and dissolution of the Trust and the distribution of the Subordinated Debt Securities; and, provided, further, that, if there is available to the Trust the opportunity to eliminate, within such 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, which has no adverse effect on the Trust, the Company or the holders of the Trust Securities, the Trust will pursue such measure in lieu of termination and dissolution. Furthermore, if in the case of the occurrence of a Tax Event (i) the Company has received an opinion (a "Redemption Tax Opinion") from independent tax counsel experienced in such matters that, as a result of a Tax Event, there is more than an insubstantial risk that the Company would be precluded from deducting the interest on the Subordinated Debt Securities for United States federal income tax purposes even after the Subordinated Debt Securities were distributed to the holders of Trust Securities in liquidation of such holders' interests in the Trust as described above or (ii) the Regular Trustees shall have been informed by such tax counsel that a No Recognition Opinion cannot be delivered, the Company shall have the right, upon not less than 30 nor more than 60 days' notice, to redeem the Subordinated Debt Securities in whole or in part for cash within 90 days following the occurrence of such Tax Event, and, following such redemption, Trust Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Subordinated Debt Securities so redeemed shall be redeemed by the Trust at the Redemption Price on a pro rata basis; provided, however, that, if there is available to the Company or the Trust the opportunity to eliminate, within such 90-day period, the Tax Event by taking some ministerial action, such as filing a form or making an election, or pursuing some other similar reasonable measure which has no adverse effect on the Trust, the Company or the holders of the Trust Securities, the Company or the Trust will pursue such measure in lieu of redemption. If Subordinated Debt Securities are distributed to the holders of the Preferred Securities, the Company will use its best efforts to have the Subordinated Debt Securities listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. After the date for any distribution of Subordinated Debt Securities upon termination of the Trust, (i) the Preferred Securities and Preferred Securities Guarantee will no longer be deemed to be outstanding, (ii) the depositary or its nominee, as the record holder of the Preferred Securities, will receive a registered global certificate or certificates representing the Subordinated Debt Securities to be delivered upon such distribution and (iii) any certificates representing Preferred Securities and the Preferred Securities Guarantee not held by the depositary or its nominee will be deemed to represent Subordinated Debt Securities having an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accrued and unpaid distributions on, such Preferred Securities, until such certificates are presented to the Company or its agent for transfer or reissuance. There can be no assurance as to the market prices for the Preferred Securities or the Subordinated Debt Securities that may be distributed in exchange for the Preferred Securities if a termination and liquidation of the Trust were to occur. Accordingly, the Preferred Securities that an investor may purchase, whether pursuant to the offer hereby or in the secondary market, or the Subordinated Debt Securities that the investor may receive on termination and liquidation of the Trust, may trade at a discount to the price that the investor paid to purchase the Preferred Securities offered hereby. On December 7, 1995, the U.S. Treasury Department proposed a series of tax law changes that would, among other things, prevent companies from deducting interest on debt instruments with a maturity of more than 40 years and on instruments with a maximum term of more than 20 years which are not shown as indebtedness on the consolidated balance sheet of the issuer. Either of these proposals, if enacted, would prevent the Company from deducting interest paid on the Subordinated Debt Securities. The Company cannot predict whether the proposed tax law changes will become law. However, the Chairmen of the House Ways and Means and Senate S-18 Finance Committees issued a joint statement on March 29, 1996 stating that the effective date of these proposals, if enacted, would be no earlier than the date of appropriate Congressional action. In addition, subsequent to the publication of such joint statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials concurring with the view expressed in such joint statement. If legislation is enacted limiting, in whole or in part, the deductibility by the Company of interest on the Subordinated Debt Securities for United States federal income tax purposes, such enactment would be a Tax Event and the Subordinated Debt Securities would be subject to redemption as described above. Were the Subordinated Debt Securities redeemed in connection with such a Tax Event, the Trust would be required to redeem the Trust Securities. The December 7, 1995 proposed tax law changes would not alter the United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities. See "Certain Federal Income Tax Consequences." REDEMPTION PROCEDURES The Trust may not redeem fewer than all of the outstanding Preferred Securities unless all accrued and unpaid distributions have been paid on all Trust Securities for all quarterly distribution periods terminating on or prior to the date of redemption. If the Trust gives a notice of redemption in respect of Preferred Securities (which notice will be irrevocable), then, by 12:00 noon, New York City time, on the redemption date, provided that the Company has paid to the Property Trustee a sufficient amount of cash in connection with the related redemption or maturity of the Subordinated Debt Securities, the Trust will irrevocably deposit with the depositary funds sufficient to pay the applicable Redemption Price and will give the depositary irrevocable instructions and authority to pay the Redemption Price to the holders of the Preferred Securities. See "--Book-Entry Only Issuance--The Depository Trust Company." If notice of redemption shall have been given and funds deposited as required, then immediately prior to the close of business on the date of such deposit, distributions will cease to accrue and all rights of holders of such Preferred Securities so called for redemption will cease, except the right of the holders of such Preferred Securities to receive the Redemption Price, but without interest on such Redemption Price. In the event that any date fixed for redemption of Preferred Securities is not a Business Day, then payment of the Redemption Price 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 falls in the next calendar year, such payment will be made on the immediately preceding Business Day. In the event that payment of the Redemption Price in respect of Preferred Securities is improperly withheld or refused and not paid either by the Trust or by the Company pursuant to the Preferred Securities Guarantee, distributions on such Preferred 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. In the event that fewer than all of the outstanding Preferred Securities are to be redeemed, the Preferred Securities will be redeemed pro rata as described under "--Book-Entry Only Issuance--The Depository Trust Company" below. Subject to the foregoing and to applicable law (including, without limitation, United States federal securities laws), the Company or its affiliates may, at any time and from time to time, purchase outstanding Preferred Securities by tender, in the open market or by private agreement. LIQUIDATION DISTRIBUTION UPON TERMINATION In the event of any voluntary or involuntary termination, dissolution or winding-up of the Trust, the holders of the Preferred Securities at that time will be entitled to receive out of the assets of the Trust, after satisfaction of liabilities to creditors, distributions in an amount equal to the aggregate of the stated liquidation amount of $25 per Preferred Security plus accrued and unpaid distributions thereon to the date of payment (the "Liquidation Distribution"), unless, in connection with such termination, dissolution or winding-up S-19 Subordinated Debt Securities in an aggregate principal amount equal to the aggregate stated liquidation amount of, with an interest rate identical to the distribution rate of, and accrued and unpaid interest equal to accrued and unpaid distributions on, the Preferred Securities, have been distributed on a pro rata basis to the holders of Preferred Securities in exchange for such Preferred Securities. If, upon any such termination, dissolution or winding-up 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 Preferred Securities shall be paid on a pro rata basis. The holders of the Common Securities will be entitled to receive distributions upon any such dissolution pro rata with the holders of the Preferred Securities, except that if a Declaration Event of Default has occurred and is continuing, the Preferred Securities shall have a preference over the Common Securities with regard to such distributions. Pursuant to the Declaration, the Trust shall terminate (i) on , 20 , the expiration of the term of the Trust, (ii) upon the bankruptcy of the Company or the holder of the Common Securities, (iii) upon the filing of a certificate of dissolution or its equivalent with respect to the Company or the holder of the Common Securities, the filing of a certificate of cancellation with respect to the Trust, or the revocation of the charter of the Company or the holder of the Common Securities and the expiration of 90 days after the date of revocation without a reinstatement thereof, (iv) upon the distribution of the Subordinated Debt Securities following the occurrence of a Special Event, (v) upon the entry of a decree of a judicial dissolution of the Company or the holder of the Common Securities or the Trust or (vi) upon the redemption of all of the Trust Securities. DECLARATION EVENTS OF DEFAULT An event of default under the Indenture (an "Indenture Event of Default") (see "Description of the Subordinated Debt Securities--Indenture Events of Default") constitutes an event of default under the Declaration with respect to the Trust Securities (a "Declaration Event of Default"); provided, that pursuant to the Declaration, the holder of the Common Securities will be deemed to have waived any Declaration Event of Default with respect to the Common Securities or its consequences until all Declaration Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated. Until such Declaration Events of Default with respect to the Preferred Securities 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 with respect to certain matters under the Declaration, and therefore the Indenture. Upon the occurrence of a Declaration Event of Default, the Property Trustee, as the sole holder of the Subordinated Debt Securities, will have the right under the Indenture to declare the principal of, and interest on, the Subordinated Debt Securities to be immediately due and payable. If a Declaration Event of Default occurs that results from the failure of the Company to pay principal of or interest on the Subordinated Debt Securities when due, during the continuance of such an event of default a holder of Preferred Securities may institute a legal proceeding directly against the Company to obtain payment of such principal or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The holders of Preferred Securities will not be able to exercise directly against the Company any other remedy available to the Property Trustee unless the Property Trustee first fails to do so. See "--Voting Rights." VOTING RIGHTS Except as provided below and except as provided under the Trust Act, the Trust Indenture Act and under "Description of the Preferred Securities Guarantee--Amendments and Assignment" below, and except as otherwise required by law and the Declaration, the holders of the Preferred Securities will have no voting rights. In the event that the Company elects to defer payments of interest on the Subordinated Debt Securities as S-20 described above under "--Distributions," the holders of the Preferred Securities do not have the right to appoint a special representative or trustee or otherwise act to protect their interests. Subject to the requirement of the Property Trustee obtaining a tax opinion as set forth in the last sentence of this paragraph, the holders of a majority in aggregate liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee, or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee, as the holder of the Subordinated Debt Securities, to (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debt Trustee (as hereinafter defined) under the Indenture with respect to the Subordinated Debt Securities, (ii) waive any past Indenture Event of Default which is waivable under the Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Subordinated Debt Securities shall be due and payable, or (iv) consent to any amendment, modification or termination of the Indenture or the Subordinated Debt Securities, where such consent shall be required, provided that where a consent under the Indenture would require the consent of the holders of greater than a majority in principal amount of Subordinated Debt Securities affected thereby (a "Super-Majority"), only the holders of at least the proportion in liquidation amount of the Preferred Securities which the relevant Super-Majority represents of the aggregate principal amount of the Subordinated Debt Securities may direct the Property Trustee to give such consent. If the Property Trustee fails to enforce its rights under the Declaration (including, without limitation, its rights, powers and privileges as the holder of the Subordinated Debt Securities under the Indenture), a holder of Preferred Securities may to the extent permitted by applicable law institute a legal proceeding directly against any person to enforce the Property Trustee's rights under the Declaration without first instituting any legal proceeding against the Property Trustee or any other person or entity. Following and during the continuance of a Declaration Event of Default that results from the failure of the Company to pay principal of or interest on the Subordinated Debt Securities when due, a holder may also proceed directly against the Company, without first waiting to determine if the Property Trustee has enforced its rights under the Declaration, to obtain payment of such principal or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The Property Trustee shall notify all holders of the Preferred Securities of any notice of default received from the Debt Trustee with respect to the Subordinated Debt Securities. Such notice shall state that such Indenture Event of Default also constitutes a Declaration Event of Default. The Property Trustee shall not take any action described in clauses (i), (ii), (iii) or (iv) above unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes and each holder of Trust Securities will be treated as owning an undivided beneficial interest in the Subordinated Debt Securities. In the event the consent of the Property Trustee, as the holder of the Subordinated Debt Securities, is required under the Indenture with respect to any amendment, modification or termination of the Indenture, the Property Trustee shall request the direction of the holders of the Trust Securities with respect to such amendment, modification or termination. The Property Trustee shall vote with respect to such amendment, modification or termination as directed by a majority in liquidation amount of the Preferred Securities and, if no Declaration Event of Default has occurred and is continuing, a majority in liquidation amount of the Common Securities, voting together as a single class, provided that where a consent under the Indenture would require the consent 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 Preferred Securities and Common Securities, respectively, which the relevant Super-Majority represents of the aggregate principal amount of the Subordinated Debt Securities outstanding. The Property Trustee shall not take any such action in accordance with the directions of the holders of the Trust Securities unless the Property Trustee has obtained an opinion of independent tax counsel to the effect that, as a result of such action, the Trust will not be classified as other than a grantor trust for United States federal income tax purposes. A waiver of an Indenture Event of Default will constitute a waiver of the corresponding Declaration Event of Default. S-21 Any required 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 Trust Securities 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 Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or distribute Subordinated Debt Securities in accordance with the Declaration. 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 at such time by the Company or any entity directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Company, 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. The procedures by which holders of Preferred Securities may exercise their voting rights are described below. See "--Book-Entry Only Issuance--The Depository Trust Company." Holders of the Preferred Securities will have no rights to appoint or remove the Company Trustees, who may be appointed, removed or replaced solely by the Company, as the direct or indirect holder of all the Common Securities. MODIFICATION OF THE DECLARATION The Declaration may be amended or modified if approved and executed by a majority of the Regular Trustees, provided that if any proposed amendment 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 Trust Securities, whether by way of amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or termination of the Trust other than pursuant to the terms of the Declaration, then the holders of the Trust Securities as a single 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 the Trust Securities affected thereby, provided that a reduction of the principal amount or the distribution rate, or a change in the payment dates or maturity of the Preferred Securities, shall not be permitted without the consent of each holder of Preferred Securities. In the event any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or the Common Securities, then only the affected class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of a majority in liquidation amount of such class of Trust Securities. Notwithstanding the foregoing, no amendment or modification may be made to the Declaration if such amendment or modification would (i) cause the Trust to be classified for purposes of United States federal income taxation as other than a grantor trust, (ii) reduce or otherwise adversely affect the powers of the Property Trustee or (iii) cause the Trust to be deemed to be an "investment company" which is required to be registered under the 1940 Act. EXPENSES AND TAXES In the Declaration, the Company has agreed to pay for all debts and other obligations (other than with respect to the Trust Securities) and all costs and expenses of the Trust (including costs and expenses relating to the organization of the Trust, the fees and expenses of the Company Trustees and the costs and expenses relating to the operation of the Trust) and to pay any and all taxes and all costs and expenses with respect thereto (other than United States withholding taxes) to which the Trust might become subject. The foregoing obligations of the S-22 Trust under the Declaration are 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 thereof. The Property Trustee and any such Creditor may enforce such obligations of the Trust directly against the Company, and the Company has irrevocably waived 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 Company. The Company has also agreed in the Declaration to execute such additional agreements as may be necessary or desirable to give full effect to the foregoing agreement of the Company. MERGERS, CONSOLIDATIONS OR AMALGAMATIONS 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 below. The Trust may, with the consent of a majority of the Regular Trustees and without the consent of the holders of the Trust Securities, 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 either (x) expressly assumes all of the obligations of the Trust with respect to the Trust Securities or (y) substitutes for the Trust Securities other securities having substantially the same terms as the Trust Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Trust Securities rank in priority with respect to distributions and payments upon termination, liquidation, redemption, maturity and otherwise, (ii) the Company expressly acknowledges a trustee of such successor entity which possesses the same powers and duties as the Property Trustee as the holder of the Subordinated Debt Securities, (iii) the Preferred Securities or any Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Securities are then listed, (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 Trust Securities (including any Successor Securities) in any material respect (other than with respect to any dilution of the holders' interest in the new entity), (vi) such successor entity has a purpose identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or replacement, the Company has received an opinion from 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 Trust 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 such successor entity will be required to register as an investment company under the 1940 Act and (viii) the Company guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the Preferred Securities Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of holders of 100% in liquidation amount of the Trust 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 the successor entity to be classified for United States federal income tax purposes as other than a grantor trust and any holder of Trust Securities not to be treated as owning an undivided beneficial interest in the Subordinated Debt Securities. BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY The Depository Trust Company ("DTC") will act as securities depositary for the Preferred Securities. The Preferred Securities will be issued only as fully registered securities registered in the name of Cede & Co. (DTC's nominee). One or more fully registered global Preferred Securities certificates will be issued, representing in the aggregate the total number of Preferred Securities, and will be deposited with DTC. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in a global Preferred Security. S-23 DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file with the Commission. Purchases of Preferred Securities within the DTC system must be made by or through Direct Participants, which will receive a credit for the Preferred Securities on DTC's records. The ownership interest of each actual purchaser of Preferred Securities ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Preferred Securities. Transfers of ownership interests in the Preferred Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Preferred Securities, except in the event that use of the book-entry system for the Preferred Securities is discontinued. To facilitate subsequent transfers, all the Preferred Securities deposited by Participants with DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of Preferred Securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Preferred Securities. DTC's records reflect only the identity of the Direct Participants to whose accounts such Preferred Securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Preferred Securities are being redeemed, DTC will reduce pro rata the amount of the interest of each Direct Participant in the Preferred Securities to be redeemed; provided, that if, as a result of such pro rata redemption, Direct Participants would hold fractional interests in the Preferred Securities, DTC will adjust the amount of the interest of each Direct Participant to be redeemed to avoid such fractional interests. Although voting with respect to the Preferred Securities is limited, in those cases where a vote is required neither DTC nor Cede & Co. will itself consent or vote with respect to Preferred Securities. Under its usual procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Preferred Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). Distribution payments on the Preferred Securities will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's S-24 records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case with securities held for the account of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trust, any trustee or the Company, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of distributions to DTC is the responsibility of the Trust, disbursement of such payments to Direct Participants is the responsibility of DTC, and disbursement of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. Except as provided herein, a Beneficial Owner in a global Preferred Security will not be entitled to receive physical delivery of Preferred Securities. Accordingly, each Beneficial Owner must rely on the procedures of DTC to exercise any rights under the Preferred Securities. DTC may discontinue providing its services as securities depositary with respect to the Preferred Securities at any time by giving reasonable notice to the Trust. Under such circumstances, in the event that a successor securities depositary is not obtained, Preferred Securities certificates are required to be printed and delivered. Additionally, the Regular Trustees (after consultation with the Company) may decide to discontinue use of the system of book-entry transfers through DTC (or a successor depositary) with respect to the Preferred Securities. In that event, certificates for the Preferred Securities will be printed and delivered. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Company and the Trust believe to be reliable, but the Company and the Trust take no responsibility for the accuracy thereof. INFORMATION CONCERNING THE PROPERTY TRUSTEE The Property Trustee, prior to the occurrence of a default with respect to the Trust Securities and after the curing of all such defaults that may have occurred, undertakes to perform only such duties as are specifically set forth in the Declaration and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the Property Trustee is under no obligation to exercise any of the powers vested in it by the Declaration at the request of any holder of Preferred Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby; but the foregoing shall not relieve the Property Trustee, upon the occurrence of a Declaration Event of Default, from exercising the rights and powers vested in it by the Declaration. The Property Trustee also serves as the Debt Trustee under the Indenture and as the Preferred Guarantee Trustee under the Preferred Securities Guarantee. REGISTRAR AND TRANSFER AGENT In the event that the Preferred Securities do not remain in book-entry only form, the Property Trustee will act as paying agent and may designate an additional or substitute paying agent at any time. Registration of transfers of Preferred Securities will be effected without charge by or on behalf of the Trust, but upon payment (with the giving of such indemnity as the Regular Trustees may require) in respect of any tax or other government charges which may be imposed in relation to it. The Trust will not be required to register or cause to be registered the transfer of Preferred Securities after such Preferred Securities have been called for redemption. GOVERNING LAW The Declaration and the Preferred Securities will be governed by, and construed in accordance with, the internal laws of the State of Delaware. S-25 MISCELLANEOUS The Regular Trustees are authorized and directed to operate the Trust in such a way so that the Trust will not be deemed to be an "investment company" required to be registered under the 1940 Act or characterized for United States federal income tax purposes as other than a grantor trust. The Company is authorized and directed to conduct its affairs so that the Subordinated Debt Securities will be treated as indebtedness of the Company for United States federal income tax purposes. In this connection, the Regular Trustees and the Company are authorized to take any action, not inconsistent with applicable law, the Declaration or the Restated Certificate of Incorporation of the Company, that each of the Regular Trustees and the Company determines in their discretion to be necessary or desirable for such purposes, as long as such action does not materially and adversely affect the interests of the holders of the Preferred Securities. Holders of the Preferred Securities will have no preemptive rights. DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE Set forth below is a summary of information concerning the Preferred Securities Guarantee that will be executed and delivered by the Company for the benefit of the holders from time to time of the Preferred Securities. The Preferred Securities Guarantee will be qualified as an indenture under the Trust Indenture Act. The Bank of New York will act as the Preferred Guarantee Trustee. The terms of the Preferred Securities Guarantee will be those set forth therein and those made part thereof by the Trust Indenture Act. The following summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Preferred Securities Guarantee (which is filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus form a part) and the Trust Indenture Act. The Preferred Securities will be held by the Preferred Guarantee Trustee for the benefit of the holders of the Preferred Securities. GENERAL Pursuant to the Preferred Securities Guarantee, the Company will irrevocably and unconditionally agree, to the extent set forth therein, to pay in full to the holders of the Preferred Securities the Guarantee Payments (as defined herein) (without duplication of amounts theretofore paid by the Trust), to the extent not paid by the Trust, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The following payments or distributions with respect to the Preferred Securities to the extent not paid or made by the Trust (the "Guarantee Payments") will be subject to the Preferred Securities Guarantee (without duplication): (i) any accrued and unpaid distributions that are required to be paid on the Preferred Securities, to the extent the Trust has funds available therefor, (ii) the Redemption Price, which includes all accrued and unpaid distributions to the date of the redemption, to the extent the Trust has funds available therefor, with respect to any Preferred Securities called for redemption by the Trust and (iii) upon a voluntary or involuntary termination, dissolution or winding-up of the Trust (other than in connection with the distribution of Subordinated Debt Securities to the holders of Preferred Securities in exchange for Preferred Securities), 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 Trust has funds available therefor, and (b) the amount of assets of the Trust remaining available for distribution to holders of Preferred Securities in liquidation of the Trust. The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of Preferred Securities or by causing the Trust to pay such amounts to such holders. The Preferred Securities Guarantee will be a full and unconditional guarantee of the Guarantee Payments with respect to the Preferred Securities from the time of issuance of the Preferred Securities, but will not apply to the payment of distributions and other payments on the Preferred Securities when the Property Trustee does not have sufficient funds in the Property Account to make such distributions or other payments. If the Company does not make interest payments on the Subordinated Debt Securities held by the Property Trustee, the Trust will not make distributions on the Preferred Securities issued by the Trust and will not have funds available S-26 therefor. See "Risk Factors--Rights under the Preferred Securities Guarantee" and "Description of the Subordinated Debt Securities--Certain Covenants." The Company has also agreed separately to guarantee the obligations of the Trust with respect to the Common Securities (the "Common Securities Guarantee") to the same extent as the Preferred Securities Guarantee, except that upon the occurrence and during the continuation of an Indenture Event of Default, holders of Preferred Securities shall have priority over holders of Common Securities with respect to distributions and payments on liquidation, redemption or otherwise. CERTAIN COVENANTS OF THE COMPANY In the Preferred Securities Guarantee, the Company will covenant that, so long as the Preferred Securities remain outstanding, if there shall have occurred and is continuing any event that would constitute an event of default under the Preferred Securities Guarantee or the Declaration, then (a) the Company 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 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 Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing. However, the foregoing restriction will not apply to any dividend, redemption, liquidation, 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 TCI. AMENDMENTS AND ASSIGNMENT Except with respect to any changes which do not materially adversely affect the rights of holders of Preferred Securities (in which case no vote will be required), the Preferred Securities Guarantee may be amended only with the prior approval of the holders of not less than a majority in liquidation amount of the outstanding Preferred Securities. The manner of obtaining any such approval of holders of the Preferred Securities is set forth under "Description of the Preferred Securities--Voting Rights." All guarantees and agreements contained in the Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Company and shall inure to the benefit of the Preferred Guarantee Trustee and the holders of the Preferred Securities then outstanding. TERMINATION OF THE PREFERRED SECURITIES GUARANTEE The Preferred Securities Guarantee will terminate and be of no further force and effect as to the Preferred Securities upon full payment of the Redemption Price of all Preferred Securities, or upon distribution of the Subordinated Debt Securities to the holders of the Preferred Securities, and will terminate completely upon full payment of the amounts payable upon liquidation of the Trust. The 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 repay to the Trust or the Company, or their successors, any sums paid to them under such Preferred Securities or the Preferred Securities Guarantee. EVENTS OF DEFAULT An event of default under the Preferred Securities Guarantee will occur upon the failure of the Company to perform any of its payment or other obligations thereunder. The holders of a majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of the Preferred Securities Guarantee or to direct the exercise of any trust or power conferred upon the S-27 Preferred Guarantee Trustee under the Preferred Securities Guarantee. If the Preferred Guarantee Trustee fails to enforce the Preferred Securities Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce the Preferred Guarantee Trustee's rights under the Preferred Securities Guarantee, without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. In addition, any record holder of Preferred Securities shall have the right, which is absolute and unconditional, to proceed directly against the Company to obtain Guarantee Payments, without first waiting to determine if the Preferred Guarantee Trustee has enforced the Preferred Security Guarantee or instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. STATUS OF THE PREFERRED SECURITIES GUARANTEE The Company's obligations under the Preferred Securities Guarantee to make the Guarantee Payments will constitute an unsecured obligation of the Company and will rank (i) subordinate and junior in right of payment to all other liabilities of the Company, including the Subordinated Debt Securities, except those liabilities of the Company made pari passu or subordinate by their terms, (ii) pari passu with the most senior preferred stock issued from time to time by the Company and with any guarantee now or hereafter entered into by the Company in respect of any preferred stock of any subsidiary or affiliate of the Company and (iii) senior to the Company's common stock. The terms of the Preferred Securities provide that each holder of Preferred Securities by acceptance thereof agrees to the subordination provisions and other terms of the Preferred Securities Guarantee. The Preferred Securities Guarantee will constitute a guarantee of payment and not of collection (that is, the guaranteed party may institute a legal proceeding directly against the guarantor to enforce its rights under the guarantee without instituting a legal proceeding against any other person or entity). The Preferred Securities Guarantee will be deposited with the Preferred Guarantee Trustee to be held for the benefit of the holders of the Preferred Securities. Except as otherwise noted herein, the Preferred Guarantee Trustee has the right to enforce the Preferred Securities Guarantee on behalf of the holders of the Preferred Securities. The Preferred Securities Guarantee will not be discharged except by payment of the Guarantee Payments in full (without duplication of amounts theretofore paid by the Trust). The Company's obligations under the Preferred Securities Guarantee, taken together with its obligations under the Declaration, the Subordinated Debt Securities and the Indenture, in the aggregate provide a full and unconditional guarantee by the Company of payments due on the Preferred Securities. INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE The Preferred Guarantee Trustee, prior to the occurrence of a default with respect to the Preferred Securities Guarantee and after the curing of all such defaults that may have occurred, undertakes to perform only such duties as are specifically set forth in the Preferred Securities Guarantee and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the Preferred Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Preferred Securities Guarantee at the request of any holder of Preferred Securities, unless offered reasonable indemnity against the costs, expenses and liabilities which might be incurred thereby; but the foregoing shall not relieve the Preferred Guarantee Trustee, upon the occurrence of an event of default under the Preferred Securities Guarantee, from exercising the rights and powers vested in it by the Preferred Securities Guarantee. The Preferred Guarantee Trustee also serves as Property Trustee under the Declaration and as Debt Trustee under the Indenture. GOVERNING LAW The Preferred Securities Guarantee will be governed by, and construed in accordance with, the internal laws of the State of New York. S-28 DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES Set forth below is a description of the terms of the Subordinated Debt Securities. The following description does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Indenture, dated as of January 29, 1996, as supplemented by a Third Supplemental Indenture (as so supplemented, the "Indenture"), between the Company and The Bank of New York, as Trustee (the "Debt Trustee"), the form of which is filed as an exhibit to the Registration Statement of which this Prospectus Supplement and the accompanying Prospectus form a part. The terms of the Subordinated Debt Securities will include those stated in the Indenture and those made a part of the Indenture by reference to the Trust Indenture Act. Certain capitalized terms used herein are defined in the Indenture. Under certain circumstances involving the termination of the Trust following the occurrence of a Special Event, Subordinated Debt Securities may be distributed to the holders of Trust Securities in liquidation of the Trust. See "Description of the Preferred Securities--Special Event Redemption or Distribution." If the Subordinated Debt Securities are distributed to the holders of the Trust Securities, the Company will use its best efforts to have the Subordinated Debt Securities listed on the New York Stock Exchange or on such other exchange as the Preferred Securities are then listed. GENERAL The Subordinated Debt Securities will be issued as unsecured subordinated debt securities under the Indenture. The Subordinated Debt Securities will be limited in aggregate principal amount to approximately $ million, such amount being the sum of the aggregate stated liquidation amount of the Preferred Securities and the capital contributed by the Company in exchange for the Common Securities. The Subordinated Debt Securities are not subject to any sinking fund provision. The entire principal amount of the Subordinated Debt Securities will mature and become due and payable, together with any accrued and unpaid interest thereon, including Additional Interest (as defined herein), if any, on , 20 . If Subordinated Debt Securities are distributed to holders of the Preferred Securities in liquidation of such holders' interests in the Trust, such Subordinated Debt Securities will initially be issued as a Global Security (as defined below). As described herein, under certain limited circumstances, Subordinated Debt Securities may be issued in certificated form in exchange for a Global Security. See "--Book Entry and Settlement" below. In the event Subordinated Debt Securities are issued in certificated form, such Subordinated Debt Securities will be in denominations of $25 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Subordinated Debt Securities issued as a Global Security will be made to the depositary for the Subordinated Debt Securities. In the event Subordinated Debt Securities are issued in certificated form, principal and interest will be payable, the transfer of the Subordinated Debt Securities will be registrable and Subordinated Debt Securities will be exchangeable for Subordinated Debt Securities of other denominations of a like aggregate principal amount at the corporate trust office of the Debt Trustee in New York, New York; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the persons entitled thereto. The Indenture does not contain provisions that afford holders of the Subordinated Debt Securities protection in the event of a highly leveraged transaction involving the Company or a decline in the credit quality of the Company resulting from a change of control transaction. SUBORDINATION The Indenture provides that the Subordinated Debt Securities are subordinated and junior in right of payment to all Senior Indebtedness of the Company, whether now existing or hereafter incurred. No payment of principal of (including redemption payments, if any), premium, if any, or interest on, the Subordinated Debt Securities may be made if (a) any Senior Indebtedness of the Company is not paid when due and any applicable S-29 grace period with respect to such default has ended with such default not being cured or waived or ceasing to exist, or (b) the maturity of any Senior Indebtedness has been accelerated because of a default. Upon any distribution of assets of the Company to creditors upon any dissolution, winding-up, liquidation or reorganization, whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings, all principal of, premium, if any, and interest due or to become due on, all Senior Indebtedness must be paid in full before the holders of the Subordinated Debt Securities are entitled to receive or retain any payment. The rights of the holders of the Subordinated Debt Securities will be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions applicable to such Senior Indebtedness until all amounts owing on the Subordinated Debt Securities are paid in full. The term "Senior Indebtedness" means (i) any payment in respect of (a) indebtedness of the Company for money borrowed (including indebtedness for money borrowed owed to TCI or to subsidiaries or affiliates of the Company or TCI) and (b) indebtedness evidenced by securities, debentures, bonds, notes or other similar instruments issued by the Company, including all indebtedness currently outstanding under indentures with various trustees, (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 the Company under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) all obligations of the Company for the reimbursement on any letter of credit, banker's acceptance, security purchase facility or similar credit transaction; (v) all obligations of the type referred to in clauses (i) through (iv) above 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) above of other persons secured by any lien on any property or asset of the Company (whether or not such obligation is assumed by the Company), except for any such indebtedness that is by its terms subordinated to or pari passu with the Subordinated Debt Securities, as the case may be. Such Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such Senior Indebtedness. The Indenture does not limit the aggregate amount of Senior Indebtedness which may be issued by the Company. As of September 30, 1996, Senior Indebtedness of the Company aggregated approximately $9,234 million. CERTAIN COVENANTS If (i) there shall have occurred and be continuing any event that would constitute an Indenture Event of Default or (ii) the Company shall be in default with respect to its payment of any obligations under the Preferred Securities Guarantee or the Common Securities Guarantee, and such default shall be continuing 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 Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing. If the Company shall have given notice of its election of an Extension Period as provided in the Indenture and such period, or any extension thereof, shall be continuing, 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 Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing. Notwithstanding the foregoing restrictions, the Company will be permitted, in any event, to make dividend, redemption, liquidation and guarantee payments on capital stock, and interest, principal, redemption and S-30 guarantee payments on debt securities issued by the Company ranking pari passu with or junior to Subordinated Debt Securities, 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 TCI. For so long as the Trust Securities remain outstanding, the Company will covenant (i) to directly or indirectly maintain 100% direct or indirect ownership of the Common Securities of the Trust; provided, however, that any permitted successor of the Company under the Indenture may succeed to the Company's ownership of such Common Securities, (ii) not to cause, as sponsor of the Trust, or to permit, as holder of the Common Securities, the termination, dissolution or winding-up of the Trust, except in connection with a distribution of the Subordinated Debt Securities as provided in the Declaration and in connection with certain mergers, consolidations or amalgamations, (iii) to use its reasonable efforts to cause the Trust (a) to remain a statutory business trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities of the Trust, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration, and (b) to otherwise continue to be classified as a grantor trust for United States federal income purposes and (iv) to use reasonable efforts to cause each holder of Trust Securities to be treated as owning an undivided beneficial interest in the Subordinated Debt Securities. OPTIONAL REDEMPTION The Company shall have the right to redeem the Subordinated Debt Securities, in whole or in part, from time to time, on or after , 200 , or at any time in certain circumstances upon the occurrence of a Tax Event as described under "Description of the Preferred Securities--Special Event Redemption or Distribution," upon not less than 30 nor more than 60 days' notice, at a redemption price equal to 100% of the principal amount to be redeemed plus any accrued and unpaid interest, including Additional Interest, if any, to the redemption date. If a partial redemption of the Preferred Securities resulting from a partial redemption of the Subordinated Debt Securities would result in the delisting of the Preferred Securities, the Company may only redeem the Subordinated Debt Securities in whole. INTEREST Each Subordinated Debt Security shall bear interest at the rate of % per annum from , 199 , payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date"), commencing , 199 , to the person in whose name such Subordinated Debt Security is registered, subject to certain exceptions, at the close of business on the Business Day next preceding such Interest Payment Date. In the event the Subordinated Debt Securities are distributed to holders of the Preferred Securities in liquidation of such holders' interests in the Trust and such Subordinated Debt Securities shall not thereafter continue to remain in book-entry only form, the Company shall have the right to select record dates which shall be not less than fifteen days prior to each Interest Payment Date. The amount of interest payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of interest payable for any period shorter than a full quarterly period will be computed on the basis of the actual number of days elapsed in such 90-day quarter. In the event that any date on which interest is payable on the Subordinated Debt Securities is not a Business Day, then payment of the 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. OPTION TO EXTEND INTEREST PAYMENT PERIOD The Company shall have the right at any time, and from time to time, during the term of the Subordinated Debt Securities to defer payments of interest by extending the interest payment period for a period not exceeding S-31 20 consecutive quarters, at the end of which Extension Period the Company shall pay all interest then accrued and unpaid (including any Additional Interest), together with interest thereon at the rate specified for the Subordinated Debt Securities to the extent permitted by applicable law; provided, that, during any such Extension Period, (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 Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Securities Guarantee) with respect to the foregoing; provided, however, the foregoing restriction will not apply to any dividend, redemption, liquidation, 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 TCI. Prior to the termination of any such Extension Period, the Company may further defer payments of interest by extending the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof may not exceed 20 consecutive quarters or extend beyond the maturity of the Subordinated Debt Securities. Upon the termination of any Extension Period and the payment of all amounts then due, the Company may select a new Extension Period, as if no Extension Period had previously been declared, subject to the above requirements. No interest during an Extension Period, except at the end thereof, shall be due and payable. The Company has no present intention of exercising its rights to defer payments of interest by extending the interest payment period on the Subordinated Debt Securities. If the Property Trustee shall be the sole holder of the Subordinated Debt Securities, the Company shall give the Regular Trustees and the Property Trustee notice of its selection of an Extension Period one Business Day prior to the earlier of (i) the next succeeding date on which distributions on the Preferred Securities are payable or (ii) the date the Trust is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Preferred Securities of the record date or the date such distribution is payable, but in any event not less than one Business Day prior to such record date. The Regular Trustees shall give notice of the Company's selection of such Extension Period to the holders of the Preferred Securities. If the Property Trustee shall not be the sole holder of the Subordinated Debt Securities, the Company shall give the holders of the Subordinated Debt Securities notice of its selection of such Extension Period ten Business Days prior to the earlier of (i) the relevant Interest Payment Date or (ii) the date the Company is required to give notice to the New York Stock Exchange or other applicable self-regulatory organization or to holders of the Subordinated Debt Securities of the record or payment date of such related interest payment, but in any event at least two Business Days before such record date. ADDITIONAL INTEREST If at any time the Trust shall be 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 such case, the Company will pay as additional interest ("Additional Interest") such additional amounts as shall be required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. INDENTURE EVENTS OF DEFAULT In case any Indenture Event of Default shall occur and be continuing, the Property Trustee, as the holder of the Subordinated Debt Securities, will have the right to declare the principal of and the interest on the Subordinated Debt Securities (including Additional Interest, if any) and any other amounts payable under the Indenture to be forthwith due and payable and to enforce its other rights as a creditor with respect to the Subordinated Debt Securities. The Indenture provides that any one or more of the following described events, which has occurred and is continuing, constitutes an "Event of Default" with respect to the Subordinated Debt Securities: S-32 (a) failure for 30 days to pay interest on the Subordinated Debt Securities, including any Additional Interest in respect thereof, when due; provided, however, that a valid extension of the interest payment period by the Company shall not constitute a default in the payment of interest for this purpose; or (b) failure to pay principal or premium, if any, on the Subordinated Debt Securities when due whether at maturity, upon earlier redemption or otherwise; or (c) failure to observe or perform any other covenant (other than those specifically relating to another series of subordinated debt securities) contained in the Indenture for 90 days after written notice to the Company from the Debt Trustee or the holders of at least 25% in principal amount of the outstanding Subordinated Debt Securities; or (d) certain events of bankruptcy, insolvency or reorganization of the Company; or (e) the voluntary or involuntary termination, dissolution or winding-up of the Trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Preferred Securities in liquidation of the Trust, the redemption of all outstanding Trust Securities of the Trust and certain mergers, consolidations or amalgamations permitted by the Declaration. The holders of a majority in aggregate outstanding principal amount of the Subordinated Debt Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debt Trustee. The Debt Trustee or the holders of not less than 25% in aggregate outstanding principal amount of the Subordinated Debt Securities may declare the principal due and payable immediately on default, but the holders of a majority in aggregate outstanding principal amount may annul such declaration and waive the default if the default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration and any applicable premium has been deposited with the Debt Trustee. The holders of a majority in aggregate outstanding principal amount of the Subordinated Debt Securities affected thereby may, on behalf of the holders of all the Subordinated Debt Securities, waive any past default, except (i) a default in the payment of principal, premium, if any, or interest, including Additional Interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration and any applicable premium has been deposited with the Debt Trustee), or (ii) a default in the covenant of the Company not to declare or pay dividends on, or make distributions with respect to, or redeem, purchase or acquire any of its capital stock during an Extension Period. An Indenture Event of Default also constitutes a Declaration Event of Default. The holders of Preferred Securities in certain circumstances have the right to direct the Property Trustee to exercise its rights as the holder of the Subordinated Debt Securities. See "Description of the Preferred Securities--Declaration Events of Default" and "--Voting Rights." In addition, if an Indenture Event of Default results from the failure of the Company to pay principal of or interest on the Subordinated Debt Securities when due, during the continuance of such an event of default a holder of Preferred Securities may immediately institute a legal proceeding directly against the Company to obtain payment of such principal or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. BOOK-ENTRY AND SETTLEMENT If distributed to holders of Preferred Securities in connection with the voluntary or involuntary termination, dissolution or winding-up of the Trust as a result of the occurrence of a Special Event, the Subordinated Debt Securities will be issued in the form of one or more global certificates (each, a "Global Security") registered in the name of the depositary or its nominee. Except under the limited circumstances described below, Subordinated Debt Securities represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, Subordinated Debt Securities in definitive form. The Global Securities described above may not be transferred except by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or to a successor depositary or its nominee. S-33 The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in such a Global Security. Except as provided below, owners of beneficial interests in such a Global Security will not be entitled to receive physical delivery of Subordinated Debt Securities in definitive form and will not be considered the Holders (as defined in the Indenture) thereof for any purpose under the Indenture, and no Global Security representing Subordinated Debt Securities shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the depositary or its nominee or to a successor depositary or its nominee. Accordingly, each beneficial owner must rely on the procedures of the depositary and, if such person is not a Participant, on the procedures of the Participant through which such person owns its interest, to exercise any rights of a Holder under the Indenture. If Subordinated Debt Securities are distributed to holders of Preferred Securities in liquidation of such holders' interests in the Trust, DTC will act as securities depositary for the Subordinated Debt Securities. For a description of DTC and the specific terms of the depository arrangements, see "Description of the Preferred Securities--Book-Entry Only Issuance--The Depository Trust Company." The description therein of DTC's book-entry system and DTC's practices as they relate to purchases, transfers, notices and payments with respect to the Preferred Securities apply in all material respects to any debt obligations represented by one or more Global Securities held by DTC. The Company may appoint a successor to DTC or any successor depositary in the event DTC or such successor depositary is unable or unwilling to continue as depositary. None of the Company, the Trust, the Debt Trustee, any paying agent and any other agent of the Company or the Debt Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for such Subordinated Debt Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. A Global Security shall be exchangeable for Subordinated Debt Securities registered in the names of persons other than the depositary or its nominee only if (i) the depositary notifies the Company that it is unwilling or unable to continue as a depositary for such Global Security and no successor depositary shall have been appointed, or if at any time the depositary ceases to be registered or in good standing under the Exchange Act (or other applicable statute or regulation) at a time when the depositary is required to be so registered to act as such depositary and no successor depositary shall have been appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable or (iii) there shall have occurred an Indenture Event of Default with respect to such Subordinated Debt Securities. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Subordinated Debt Securities registered in such names as the depositary shall direct. It is expected that such instructions will be based upon directions received by the depositary from its Participants with respect to ownership of beneficial interests in such Global Security. In the event the Subordinated Debt Securities are not represented by one or more Global Securities, certificates evidencing Subordinated Debt Securities may be presented for registration of transfer (with the form of transfer endorsed thereon duly executed) or exchange, at the office of the Debt Registrar (as defined in the Indenture) or at the office of any transfer agent designated by the Company for such purpose with respect to the Subordinated Debt Securities, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. Such transfer or exchange will be effected upon the Debt Register (as defined in the Indenture) or such transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. The Company has appointed the Debt Trustee as Debt Registrar with respect to the Subordinated Debt Securities. The Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, except that the Company will be required to maintain a transfer agent at the place of payment. The Company may at any time designate additional transfer agents with respect to the Subordinated Debt Securities. S-34 In the event of any redemption in part, the Company shall not be required to (i) issue, exchange or register the transfer of Subordinated Debt Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all of the Subordinated Debt Securities and ending at the close of business on the date of such mailing or (ii) register the transfer of or exchange any Subordinated Debt Securities so selected for redemption, in whole or in part, except the unredeemed portion of any Subordinated Debt Securities being redeemed in part. PAYMENT AND PAYING AGENTS Payment of principal of and premium, if any, on the Subordinated Debt Securities will be made only against surrender to the Paying Agent (as defined in the Indenture) of the Subordinated Debt Securities. Principal of and premium, if any, and interest on Subordinated Debt Securities will be payable, subject to any applicable laws and regulations, at the office of such Paying Agent or Paying Agents as the Company may designate from time to time, except that at the option of the Company payment of any interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Debt Register with respect to the Subordinated Debt Securities. Payment of interest on the Subordinated Debt Securities on any Interest Payment Date will be made to the person in whose name the Subordinated Debt Security (or predecessor security) is registered at the close of business on the Regular Record Date for such interest payment. The Company will initially act as Paying Agent with respect to the Subordinated Debt Securities except that, if the Subordinated Debt Securities are distributed to the holders of the Preferred Securities in liquidation of such holders' interests in the Trust, the Debt Trustee will act as the Paying Agent. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agents or approve a change in the office through which any Paying Agent acts, except that the Company will be required to maintain a Paying Agent at the place of payment. All moneys paid by the Company to a Paying Agent for the payment of the principal of, premium, if any, or interest, if any, on the Subordinated Debt Securities which remain unclaimed at the end of two years after such principal, premium or interest shall have become due and payable will be repaid to the Company, and the holder of such Subordinated Debt Securities will thereafter look only to the Company for payment thereof. MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting the Company and the Debt Trustee, with the consent of the holders of not less than a majority in principal amount of the Subordinated Debt Securities, to modify the Indenture or any supplemental indenture affecting that series or the rights of the holders of the Subordinated Debt Securities; provided that no such modification may, without the consent of the holder of each outstanding Subordinated Debt Security affected thereby, (i) extend the fixed maturity of the Subordinated Debt Securities, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the holder of the Subordinated Debt Securities so affected or (ii) reduce the percentage of Subordinated Debt Securities the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Subordinated Debt Security then outstanding and affected thereby. In addition, the Company and the Debt Trustee may execute, without the consent of holders of the Subordinated Debt Securities, any supplemental indenture for certain other usual purposes including the creation of any new series of subordinated debt securities. SUCCESSOR CORPORATION The Company may not consolidate with or merge into, or transfer its properties and assets substantially as an entirety to, another corporation unless (i) the successor corporation, which shall be a corporation organized under the laws of the United States or a State thereof, assumes by supplemental indenture all the obligations of S-35 the Company under the Subordinated Debt Securities and the Indenture, and (ii) after giving effect to such transaction, no Indenture Event of Default shall have occurred and be continuing. The Indenture does not otherwise contain any covenant which restricts the ability of the Company to merge or consolidate with or into any other corporation, sell or convey all or substantially all of its assets to any person, firm or corporation or otherwise engage in restructuring transactions. DEFEASANCE AND DISCHARGE Under the terms of the Indenture, the Company will be discharged from any and all obligations in respect of the Subordinated Debt Securities (except in each case for certain obligations with respect to denominations and provisions for payment of the Subordinated Debt Securities and obligations to register the transfer or exchange of Subordinated Debt Securities, replace stolen, lost or mutilated Subordinated Debt Securities, maintain paying agencies and hold moneys for payment in trust) if the Company (i) deposits with the Debt Trustee, in trust, moneys or governmental obligations in an amount sufficient to pay all the principal of, and interest on, the Subordinated Debt Securities on the dates such payments are due in accordance with the terms of such Subordinated Debt Securities and (ii) delivers to the Debt Trustee an opinion of counsel to the effect that, based upon the Company's receipt from, or the publication by, the Internal Revenue Service of a ruling or a change in law, the holders of the Subordinated Debt Securities will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance or discharge had not occurred. GOVERNING LAW The Indenture and the Subordinated Debt Securities will be governed by, and construed in accordance with, the internal laws of the State of New York. INFORMATION CONCERNING THE DEBT TRUSTEE The Debt Trustee, prior to default, undertakes to perform only such duties as are specifically set forth in the Indenture and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provision, the Debt Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Subordinated Debt Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby; but the foregoing shall not relieve the Debt Trustee, upon the occurrence of an Indenture Event of Default, from exercising the rights and powers vested in it by the Indenture. The Debt Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the Debt Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. The Debt Trustee also serves as Property Trustee under the Declaration and as the Preferred Guarantee Trustee under the Preferred Securities Guarantee. MISCELLANEOUS The Company will have the right at all times to assign any of its rights or obligations under the Indenture to a direct or indirect wholly owned subsidiary of the Company; provided, that in the event of any such assignment, the Company will remain liable for all of the obligations of such subsidiary. Subject to the foregoing, the Indenture will be binding upon and inure to the benefit of the parties thereto and their respective successors and assigns. The Indenture provides that it may not otherwise be assigned by the parties thereto. The Indenture will provide that the Company will pay all costs, expenses, debts and obligations of the Trust other than with respect to the Trust Securities. S-36 EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT SECURITIES AND THE PREFERRED SECURITIES GUARANTEE As set forth in the Declaration, the exclusive purposes of the Trust are to (i) issue the Trust Securities, (ii) invest the proceeds thereof in the Subordinated Debt Securities and (iii) engage in only those other activities necessary or incidental thereto. As long as payments of interest and other payments are made when due on the Subordinated Debt Securities, such payments will be sufficient to cover distributions and payments due on the Trust Securities primarily because (i) the aggregate principal amount of the Subordinated Debt Securities will be equal to the sum of the aggregate stated liquidation amount of the Trust Securities; (ii) the interest rate and interest and other payment dates on the Subordinated Debt Securities will match the distribution rate and distribution and other payment dates for the Preferred Securities; (iii) the Company shall pay for all costs, expenses, debts and obligations of the Trust (other than with respect to the Trust Securities); and (iv) the Declaration provides that the Company Trustees shall not cause or permit the Trust to, among other things, engage in any activity that is not consistent with the purposes of the Trust. Payments of distributions (to the extent funds therefor are available) and other payments due on the Preferred Securities (to the extent funds therefor are available) are guaranteed by the Company as and to the extent set forth under "Description of the Preferred Securities Guarantee." If the Company does not make interest payments on the Subordinated Debt Securities purchased by the Trust, it is expected that the Trust will not have sufficient funds to pay distributions on the Preferred Securities. The Preferred Securities Guarantee does not apply to any payment of distributions unless and until the Trust has sufficient funds for the payment of such distributions. If the Company fails to make interest or other payments on the Subordinated Debt Securities when due (taking into account any Extension Period), the Declaration provides a mechanism whereby the holders of the Preferred Securities, using the procedures described in "Description of the Preferred Securities--Voting Rights," may direct the Property Trustee to enforce its rights under the Subordinated Debt Securities, including proceeding directly against the Company to enforce the Subordinated Debt Securities. If the Property Trustee fails to enforce its rights under the Indenture or the Subordinated Debt Securities, a holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce the Property Trustee's rights under the Indenture and the Subordinated Debt Securities without first instituting any legal proceeding against the Property Trustee or any other person or entity, including the Trust. In addition, during the continuance of a Declaration Event of Default that results from the failure of the Company to pay principal of or interest on the Subordinated Debt Securities when due, a holder may proceed directly against the Company, without first waiting to determine if the Property Trustee has enforced its rights under the Declaration, to obtain payment of such principal or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. If the Company fails to make payments under the Preferred Securities Guarantee, the Preferred Securities Guarantee provides a mechanism whereby the holders of the Preferred Securities may direct the Preferred Guarantee Trustee to enforce its rights thereunder. If the Preferred Guarantee Trustee fails to enforce the Preferred Securities Guarantee, any holder of Preferred Securities may institute a legal proceeding directly against the Company to enforce the Preferred Guarantee Trustee's rights under the Preferred Securities Guarantee, without first instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. In addition, any record holder of Preferred Securities shall have the right, which is absolute and unconditional, to proceed directly against the Company to obtain Guarantee Payments, without first waiting to determine if the Preferred Guarantee Trustee has enforced the Preferred Security Guarantee or instituting a legal proceeding against the Trust, the Preferred Guarantee Trustee or any other person or entity. The Company's obligations under the Preferred Securities Guarantee, the Declaration, the Subordinated Debt Securities and the Indenture, in the aggregate, provide a full and unconditional guarantee by the Company of payments due on the Preferred Securities. S-37 CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a summary of certain of the principal United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities to a holder that is a citizen or resident of the United States, a corporation, partnership or other entity created or organized under the laws of the United States or any state thereof or the District of Columbia or an estate or trust the income of which is subject to United States federal income taxation regardless of source (a "Holder"). This summary does not address the United States federal income tax consequences to persons other than Holders. This summary is based on the United States federal income tax laws, regulations and rulings and decisions now in effect, all of which are subject to change, possibly on a retroactive basis. This summary does not address the tax consequences applicable to investors that may be subject to special tax rules such as banks, thrifts, real estate investment trusts, regulated investment companies, insurance companies, dealers in securities or currencies, tax-exempt investors or persons that will hold the Preferred Securities as a position in a "straddle," as part of a "synthetic security" or "hedge," as part of a "conversion transaction" or other integrated investment or as other than a capital asset. This summary also does not address the tax consequences to persons that have a functional currency other than the U.S. dollar or the tax consequences to shareholders, partners or beneficiaries of a Holder. Further, it does not include any description of any alternative minimum tax consequences or the tax laws of any state or local government or of any foreign government that may be applicable to a Holder. CLASSIFICATION OF TCI COMMUNICATIONS FINANCING III Baker & Botts, L.L.P., counsel to the Company and special counsel to the Trust, is of the opinion that, under current law and assuming full compliance with the terms of the Indenture and the Declaration (and certain other documents), the Trust will be classified as a "grantor trust" for federal income tax purposes and will not be classified as an association taxable as a corporation or a partnership. Each Holder will be treated as owning an undivided beneficial interest in the Subordinated Debt Securities. Accordingly, each Holder will be required to include in its gross income the original issue discount ("OID") accrued with respect to its allocable share of Subordinated Debt Securities. Investors should be aware that the opinion of Baker & Botts, L.L.P. does not address any other issue and is not binding on the Internal Revenue Service or the courts. ORIGINAL ISSUE DISCOUNT, PREMIUM AND MARKET DISCOUNT Because of the option that the Company has, under the terms of the Subordinated Debt Securities, to defer payments of interest by extending interest payment periods for up to 20 consecutive quarters, the Subordinated Debt Securities will be treated as issued with OID in an amount equal to all of the stated interest payments on the Subordinated Debt Securities. Holders must include the OID attributable to the Subordinated Debt Securities in income on an economic accrual basis before the receipt of cash attributable to the interest, regardless of their method of tax accounting. The amount of OID that accrues in any month will approximately equal the amount of the interest that accrues in that month at the stated interest rate. In the event that the interest payment period is extended, Holders will continue to accrue OID approximately equal to the amount of the interest payment due at the end of the extended interest payment period on an economic accrual basis over the length of the extended interest period. Corporate Holders will not be entitled to a dividends-received deduction with respect to any income earned with respect to the Preferred Securities. To the extent a Holder acquires its Preferred Securities at a price that is greater or less than the adjusted issue price of such Holder's share of the Subordinated Debt Securities (which generally should approximate par plus accrued but unpaid interest), the Holder will be deemed to have acquired its interest in the Preferred Securities with acquisition premium or with market discount, as the case may be. A Holder acquiring Preferred Securities at a premium will be permitted to reduce the amount of OID required to be included in income to reflect the acquisition premium. A Holder acquiring Preferred Securities at a market discount will also include the amount of such discount in income in accordance with the market discount rules described below. S-38 A Holder acquiring Preferred Securities at a market discount generally will be required to recognize ordinary income to the extent of accrued market discount upon the retirement of the underlying Subordinated Debt Securities or, to the extent of any gain, upon the disposition of the Preferred Securities. Such market discount would accrue ratably, or, at the election of the Holder, under a constant yield method over the remaining term of the Subordinated Debt Securities. A Holder will also be required to defer the deduction of a portion of the interest paid or accrued on indebtedness incurred to purchase or carry Preferred Securities acquired with market discount. In lieu of the foregoing, a Holder may elect to include market discount in income currently as it accrues on all market discount instruments acquired by such Holder in the taxable year of the election or thereafter, in which case the interest deferral rule will not apply. A Holder may elect, in lieu of applying the market discount or premium rules described above, to account for all income under the Preferred Securities as if it were OID. RECEIPT OF SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF THE TRUST Under certain circumstances, as described under the caption "Description of the Preferred Securities--Special Event Redemption or Distribution," Subordinated Debt Securities may be distributed to Holders in exchange for the Preferred Securities and in liquidation of the Trust. Such a distribution would be treated as a non-taxable event to each Holder and each Holder would receive an aggregate tax basis in the Subordinated Debt Securities equal to such Holder's aggregate tax basis in the Preferred Securities. A Holder's holding period in the Subordinated Debt Securities so received in liquidation of the Trust would include the period for which the Preferred Securities were held by such Holder. Upon occurrence of a Tax Event, a termination of the Trust in which Holders receive cash would be a taxable event to such Holders. SALE OF PREFERRED SECURITIES A Holder that sells Preferred Securities will recognize gain or loss equal to the difference between its adjusted tax basis in the Preferred Securities and the amount realized on the sale. A Holder's adjusted tax basis in the Preferred Securities generally will be its initial purchase price increased by OID previously includible in such Holder's gross income to the date of disposition (and the accrual of market discount, if any) and decreased by payments received on the Preferred Securities. Subject to the market discount rules described above, any such gain or loss generally will be capital gain or loss. The Preferred Securities may trade at a price that does not accurately reflect the value of accrued but unpaid interest with respect to the underlying Subordinated Debt Securities. A Holder disposing of its Preferred Securities between record dates for payments of distributions thereon will be required to include accrued but unpaid interest through the date of disposition in income as ordinary income (i.e., OID), and to add such amount to its adjusted tax basis in its Preferred Securities. To the extent the selling price is less than the Holder's adjusted tax basis (which will include, in the form of OID, all accrued but unpaid interest), a Holder will recognize a capital loss. Subject to certain limited exceptions, capital losses cannot be applied to offset ordinary income for United States federal income tax purposes. FOREIGN INVESTORS Subject to the discussion of backup withholding below, interest (including OID) with respect to the Preferred Securities paid to a nonresident alien individual, foreign corporation, foreign partnership or foreign estate or trust will be exempt from U.S. withholding tax, provided that the Holder complies with applicable certification requirements (and does not actually or constructively own ten percent or more of the voting stock of the Company and is not a controlled foreign corporation related to the Company or its affiliates). INFORMATION REPORTING TO HOLDERS Subject to the qualifications discussed below, income on the Preferred Securities will be reported to Holders on Form 1099, which forms should be mailed to Holders of Preferred Securities by January 31 following each calendar year. S-39 The Trust will be obligated to report annually to Cede & Co., as Holder of record of the Preferred Securities, the OID with respect to the Preferred Securities that accrued during that year. The Trust currently intends to report such information on Form 1099 prior to January 31 following each calendar year even though the Trust is not legally required to report to record Holders until April 15 following each calendar year. The Underwriters (as defined herein) have indicated to the Trust that, to the extent that they hold Preferred Securities as nominees for beneficial holders, they currently expect to report to such beneficial holders on Forms 1099 by January 31 following each calendar year. Under current law, Holders of Preferred Securities who hold as nominees for beneficial Holders will not have any obligation to report information regarding the beneficial holders to the Trust. The Trust, moreover, will not have any obligation to report to beneficial Holders who are not also record holders. Thus, beneficial holders of Preferred Securities who hold their Preferred Securities through the Underwriters or otherwise in "street name" will receive Forms 1099 reflecting the income on their Preferred Securities from such nominee Holders rather than the Trust. BACKUP WITHHOLDING Payments made on, and proceeds from the sale of, the Preferred Securities may be subject to a "backup" withholding tax of 31% unless the Holder complies with certain identification requirements. Any withheld amounts will be allowed as a credit against the Holder's federal income tax, provided that required information is provided to the Internal Revenue Service. PROPOSED TAX LAW CHANGES On December 7, 1995, the U.S. Treasury Department proposed a series of tax law changes that would, among other things, prevent companies from deducting interest on debt instruments with a maturity of more than 40 years and on instruments with a maximum term of more than 20 years which are not shown as indebtedness on the consolidated balance sheet of the issuer. Either of these proposals, if enacted, would prevent the Company from deducting interest paid on the Subordinated Debt Securities. The Company cannot predict whether the proposed tax law changes will become law. However, the Chairmen of the House Ways and Means and Senate Finance Committees issued a joint statement on March 29, 1996 stating that the effective date of these proposals, if enacted, would be no earlier than the date of appropriate Congressional action. In addition, subsequent to the publication of such joint statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials concurring with the view expressed in such joint statement. If legislation is enacted limiting, in whole or in part, the deductibility by the Company of interest on the Subordinated Debt Securities for United States federal income tax purposes, such enactment would be a Tax Event. Under certain circumstances following a Tax Event, the Company may cause the Subordinated Debt Securities to be redeemed, in which event the Trust would redeem the Trust Securities. See "Description of the Preferred Securities--Special Event Redemption or Distribution." The December 7, 1995 proposed tax law changes would not alter the United States federal income tax consequences of the purchase, ownership and disposition of the Preferred Securities. THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS. S-40 UNDERWRITING Subject to the terms and conditions set forth in a purchase agreement (the "Purchase Agreement"), the Trust has agreed to sell to each of the underwriters named below (the "Underwriters"), and each of the Underwriters, for whom Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as representatives (the "Representatives"), has severally agreed to purchase, the number of Preferred Securities set forth opposite its name below. In the Purchase Agreement, the several Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase all of the Preferred Securities offered hereby if any of the Preferred Securities are purchased. In the event of default by an Underwriter, the Purchase Agreement provides that, in certain circumstances, the purchase commitments of the nondefaulting Underwriters may be increased or the Purchase Agreement may be terminated.
NUMBER OF UNDERWRITER PREFERRED SECURITIES ----------- -------------------- Lehman Brothers Inc. ................................... Merrill Lynch, Pierce, Fenner & Smith Incorporated...................................
S-41
NUMBER OF UNDERWRITER PREFERRED SECURITIES ----------- -------------------- ---------- Total............................................. ==========
The Underwriters propose initially to offer the Preferred Securities to the public at the initial public offering price set forth on the cover page of this Prospectus, and to certain dealers at such price less a concession not in excess of $ per Preferred Security, provided that such concession for sales of or more Preferred Securities to a single purchaser will not be in excess of $ per Preferred Security. The Underwriters may allow, and such dealers may reallow, a discount not in excess of $ per Preferred Security to certain other dealers. After the initial public offering, the public offering price, concession and discount may be changed. In view of the fact that the proceeds of the sale of the Preferred Securities will be used to purchase the Subordinated Debt Securities of the Company, the Purchase Agreement provides that the Company will pay as compensation ("Underwriters' Compensation") to the Underwriters for the Underwriters arranging the investment therein of such proceeds, an amount in New York Clearing House funds of $ per Preferred Security (or $ in the aggregate), provided that such compensation for sales of or more Preferred Securities to any 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. During a period of 30 days from the date of this Prospectus Supplement, neither the Trust nor the Company will, without the 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 or exercisable for, Preferred Securities or the 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 the Preferred Securities offered hereby and subject to certain exceptions specified in the Purchase Agreement). An application will be filed with the New York Stock Exchange for the listing of the Preferred Securities, subject to official notice of issuance. If approved for listing, trading of the Preferred Securities on the New York Stock Exchange is expected to commence within a 30-day period after the initial delivery of the Preferred Securities. The Representatives have advised the Trust that the Underwriters intend to make a market in the Preferred Securities prior to the commencement of trading on the New York Stock Exchange. The Underwriters will have no obligation to make a market in the Preferred Securities, however, and may cease market making activities, if commenced, at any time. S-42 Prior to this offering there has been no public market for the Preferred Securities. In order to meet one of the requirements for listing the Preferred Securities on the New York Stock Exchange, the Underwriters will undertake to sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial holders. The Company and the Trust have agreed to indemnify the Underwriters against, or to contribute to payments that the Underwriters may be required to make in respect of, certain liabilities, including liabilities under the Securities Act of 1933, as amended. Certain of the Underwriters engage in transactions with, and from time to time have performed services for, the Company in the ordinary course of business. LEGAL MATTERS Certain matters of Delaware law relating to the validity of the Preferred Securities will be passed upon on behalf of the Trust by Richards, Layton & Finger, special Delaware counsel to the Trust. The validity of the Subordinated Debt Securities, the Preferred Securities Guarantee and certain matters relating thereto will be passed upon on behalf of the Company by Baker & Botts, L.L.P., New York, New York. Certain United States federal income taxation matters will be passed upon for the Company and the Trust by Baker & Botts, L.L.P. Jerome H. Kern, special counsel to Baker & Botts, L.L.P., is a director of Tele-Communications, Inc., which owns all of the Common Stock of the Company. Certain attorneys with Baker & Botts, L.L.P. hold options to purchase shares of TCI's Tele-Communications, Inc. Series A TCI Group Common Stock and hold restricted shares and options to purchase shares of Tele- Communications, Inc. Series A Liberty Media Group Common Stock. Certain legal matters will be passed upon on behalf of the Underwriters by Brown & Wood LLP, New York, New York. S-43 DEFINITIONS
TERM PAGE ---- ---- Additional Interest............. S-32 Beneficial Owner................ S-24 Business Day.................... S-17 Change in 1940 Act Law.......... S-17 Common Securities............... S-1 Common Securities Guarantee..... S-27 Company......................... S-1 Company Trustees................ S-11 Creditor........................ S-23 DTC............................. S-23 Debt Trustee.................... S-29 Declaration..................... S-11 Declaration Event of Default.... S-20 Delaware Trustee................ S-11 Direct Participants............. S-24 Dissolution Tax Opinion......... S-17 distributions................... S-2 Event of Default................ S-32 Exchange Act.................... S-24 Extension Period................ S-2 Global Security................. S-33 Guarantee Payments.............. S-26 Holder.......................... S-38 Indenture....................... S-29 Indenture Event of Default...... S-20 Indirect Participants........... S-24 Interest Payment Date........... S-31 Investment Company Event........ S-17 Liquidation Distribution........ S-19
TERM PAGE ---- ---- New York Stock Exchange......... S-1 1940 Act........................ S-17 No Recognition Opinion.......... S-18 OID............................. S-38 Participants.................... S-24 Preferred Guarantee Trustee..... S-11 Preferred Securities............ S-1 Preferred Securities Guarantee.. S-2 Property Account................ S-11 Property Trustee................ S-11 Purchase Agreement.............. S-41 Redemption Price................ S-3 Redemption Tax Opinion.......... S-18 Regular Trustees................ S-11 Representatives................. S-41 Senior Indebtedness............. S-30 Special Event................... S-17 Sponsor......................... S-11 Successor Securities............ S-23 Subordinated Debt Securities.... S-2 Super-Majority.................. S-21 TCI............................. S-3 Tax Event....................... S-17 Trust........................... S-1 Trust Act....................... S-11 Trust Indenture Act............. S-11 Trust Securities................ S-2 Underwriters.................... S-41 Underwriter's Compensation...... S-42
S-44 SUBJECT TO COMPLETION, DATED NOVEMBER 27, 1996 PROSPECTUS $500,000,000 TCI COMMUNICATIONS, INC. SUBORDINATED DEBT SECURITIES --------------- TCI COMMUNICATIONS FINANCING III TCI COMMUNICATIONS FINANCING IV TCI COMMUNICATIONS FINANCING V TCI COMMUNICATIONS FINANCING VI PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY TCI COMMUNICATIONS, INC. --------------- TCI Communications, Inc., a Delaware corporation (the "Company"), may from time to time offer its subordinated debt securities (the "Subordinated Debt Securities") in one or more series and in amounts, at prices and on terms to be determined at the time of the offering. The Subordinated Debt Securities when issued will be unsecured obligations of the Company. The Company's obligations under the Subordinated Debt Securities will be subordinate and junior in right of payment to certain other indebtedness of the Company, as may be described in an accompanying Prospectus Supplement (the "Prospectus Supplement"). TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V and TCI Communications Financing VI (each, a "TCIC Trust"), each a statutory business trust formed under the laws of Delaware, may from time to time offer preferred securities evidencing preferred undivided beneficial interests in the assets of the respective TCIC Trust ("Preferred Securities"). The payment of periodic cash distributions ("distributions") with respect to Preferred Securities of each of the TCIC Trusts, out of moneys held by each of the TCIC Trusts, and payments on liquidation, redemption or otherwise with respect to such Preferred Securities will be guaranteed by the Company to the extent described herein (each, a "Preferred Securities Guarantee"). The Company's obligations under the Preferred Securities Guarantees will be subordinate and junior in right of payment to all other liabilities of the Company and pari passu (equally and ratably) with the most senior preferred stock issued by the Company and with any guarantee that may be entered into by the Company in respect of any preferred stock of any subsidiary or affiliate of the Company. Subordinated Debt Securities may be issued and sold from time to time in one or more series by the Company to a TCIC Trust in connection with the investment of the proceeds from the offering of Preferred Securities and Common Securities (as defined herein) of such TCIC Trust. The Subordinated Debt Securities subsequently may be distributed pro rata to holders of Preferred Securities and Common Securities in connection with the termination of such TCIC Trust upon the occurrence of certain events as may be described in the Prospectus Supplement. Specific terms of the particular Subordinated Debt Securities of any series, the Preferred Securities of any TCIC Trust and the related Preferred Securities Guarantee in respect of which this Prospectus is being delivered (the "Offered Securities") will be set forth in an accompanying Prospectus Supplement with respect to such series of Subordinated Debt Securities or such Preferred Securities, which will describe, without limitation and where applicable, the following: (i) in the case of Subordinated Debt Securities, the specific designation, aggregate principal amount, denomination, maturity, premium, if any, interest rate (or the method of determining such rate), dates on which premium, if any, and interest, if any, will be payable, any redemption provisions, any sinking fund provisions, the initial public offering price, the subordination terms, any listing on a securities exchange and any other terms and (ii) in the case of Preferred Securities, the specific designation, number of Preferred Securities, distribution rate (or the method of determining such rate), dates on which distributions will be payable, liquidation amount, voting rights, any redemption provisions, terms for any conversion into or exchange for other securities, the initial public offering price, any listing on a securities exchange and any other rights, preferences, privileges, limitations and restrictions. The Offered Securities may be offered in amounts, at prices and on terms to be determined at the time of offering; provided, however, that the aggregate initial public offering price of all Offered Securities shall not exceed $500,000,000. The Prospectus Supplement relating to any series of Offered Securities will contain information concerning certain United States federal income tax considerations applicable to such Offered Securities. --------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. The date of this Prospectus is , 1996 The Offered Securities will be sold directly or through agents, underwriters or dealers as designated from time to time, or through a combination of such methods. If agents or any underwriters or dealers are involved in the sale of the Offered Securities in respect of which this Prospectus is being delivered, the names of such agents, underwriters or dealers and any applicable commissions or discounts will be set forth in or may be calculated from the Prospectus Supplement related to such Offered Securities. NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE TCIC TRUSTS TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ANY OF THE TCIC TRUSTS SINCE THE DATE HEREOF. AVAILABLE INFORMATION The TCIC Trusts and the Company have filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), a combined registration statement on Form S-3 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") relating to the Subordinated Debt Securities, the Preferred Securities and the Preferred Securities Guarantees. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. Statements or extracts presented in this Prospectus from financial statements, contracts, agreements or other documents included as exhibits to the Registration Statement are not necessarily complete. With respect to each such financial statement, contract, agreement or other document filed as an exhibit to the Registration Statement, reference is hereby made to such exhibit for a more complete description of the matter involved. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements, information statements and other information with the Commission. Such reports, proxy statements, information statements and other information concerning the Company can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's Regional Offices at Seven World Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the Public Reference Room of the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The Commission maintains a site on the World Wide Web that contains reports, proxy and information statements and other information regarding registrants (including the Company) that file electronically with the Commission. The address of the Commission's Web site is http://www.sec.gov. Reports, proxy statements, information statements and other information concerning the Company can also be inspected at The Nasdaq Stock Market at 1735 K Street, N.W., Washington, D.C. 20006. No separate financial statements of the TCIC Trusts have been included herein. The Company does not believe that such financial statements would be material to holders of the Preferred Securities because the TCIC Trusts are newly-formed special purpose entities, have no operating history, have no independent operations and are not engaged in, and do not propose to engage in, any activity other than the issuance of the Trust Securities (as defined herein) and holding as trust assets the Subordinated Debt Securities of the Company. The TCIC Trusts are not currently subject to the informational reporting requirements of the Exchange Act. TCI 2 Communications Financing III and TCI Communications Financing IV have each obtained written assurance from the Commission in a letter, dated May 14, 1996, that the Commission will not raise any objection if such trusts do not comply with the informational reporting requirements of the Exchange Act. The remaining TCIC Trusts will become subject to the informational reporting requirements of the Exchange Act upon the effectiveness of the Registration Statement of which this Prospectus forms a part, and will seek and expect to receive exemptions therefrom. INCORPORATION OF DOCUMENTS BY REFERENCE The Company hereby incorporates in this Prospectus by reference the following documents filed by the Company with the Commission (Commission File No. 0-5550): (i) its Annual Report on Form 10-K for the year ended December 31, 1995; (ii) its Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, (as amended by Form 10-Q/A (Amendment No. 1)), June 30, 1996 and September 30, 1996; (iii) its Current Reports on Form 8-K dated February 9, 1996, February 14, 1996, May 22, 1996, June 7, 1996, June 19, 1996, July 2, 1996, August 5, 1996, September 3, 1996 and September 11, 1996; and (iv) the financial statements and notes thereto of Cablevision, (a combination of certain cable television assets of Cablevision S.A., Televisora Belgrano S.A., Construred S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and for each of the years in the three-year period ended December 31, 1994, which appear in the Current Report on Form 8-K of the Company, dated April 20, 1995 (as amended by Form 8-K/A (Amendment No. 1)). All documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated herein by reference and to be a part hereof from the respective dates of the filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner, to whom a Prospectus is delivered, on the written or oral request of any such person, a copy of any or all of the documents incorporated by reference herein, other than certain exhibits to such documents (unless such exhibits are specifically incorporated by reference into the documents that this Prospectus incorporates). Such requests should be addressed to Stephen M. Brett, Esq., Senior Vice President, TCI Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. 3 THE COMPANY The Company is principally engaged in the construction, acquisition, development, ownership and operation of cable television systems. The Company is the largest provider of cable television services in the United States, based on the number of basic subscribers served by the Company and its subsidiaries and affiliates at September 30, 1996. The Company is a subsidiary of Tele-Communications, Inc. ("TCI") which, in addition to the operations of the Company, is engaged in the provision of satellite-delivered programming services to various distribution media, principally cable television systems. In addition, TCI has interests in cable and telecommunications operations and television programming in certain international markets and has investments in companies and joint ventures involved in developing and providing programming for new television and telecommunications technologies. TCI will have no obligation or liability, contingent or otherwise, under the Subordinated Debt Securities, the Preferred Securities Guarantees or the Preferred Securities. The Company is a Delaware corporation incorporated in 1968. Its executive offices are located at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. THE TCI COMMUNICATIONS FINANCING TRUSTS Each of TCI Communications Financing III, TCI Communications Financing IV, TCI Communications Financing V and TCI Communications Financing VI is a statutory business trust formed under Delaware law pursuant to (i) a separate declaration of trust, executed by the Company, as sponsor for such trust (the "Sponsor"), and the TCIC Trustees (as defined herein) as of that date of such trust and (ii) the filing of a separate certificate of trust with the Delaware Secretary of State. The declaration of trust of each TCIC Trust will be amended and restated in its entirety (as so amended and restated, the "Declaration") substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus forms a part. Each TCIC Trust exists for the exclusive purposes of (i) issuing and selling the Preferred Securities and Common Securities representing undivided beneficial interests in the assets of such Trust (the "Common Securities" and, together with the Preferred Securities, the "Trust Securities"), (ii) investing the gross proceeds of the Trust Securities in a series of Subordinated Debt Securities and (iii) engaging in only those other activities necessary or incidental thereto. All of the Common Securities will be directly or indirectly owned by the Company. The Common Securities will rank pari passu, and payments will be made thereon pro rata, with the Preferred Securities except that upon an event of default under the Declaration, the rights of the holders of the Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Preferred Securities. The Company will, directly or indirectly, acquire Common Securities in an aggregate liquidation amount equal to 3% of the total capital of each TCIC Trust. Each TCIC Trust has a term of approximately 55 years, but may earlier terminate as provided in the applicable Declaration. Each TCIC Trust's business and affairs will be conducted by the trustees (the "TCIC Trustees") appointed by the Company, as the direct or indirect holder of all the Common Securities. The holder of the Common Securities will be entitled to appoint, remove or replace any of, or increase or reduce the number of, the TCIC Trustees of a TCIC Trust. The duties and obligations of such TCIC Trustees shall be governed by the Declaration of such TCIC Trust, the Trust Indenture Act and the Trust Act. A majority of the TCIC Trustees (the "Regular Trustees") of each TCIC Trust will be persons who are employees or officers of or affiliated with the Company. One TCIC Trustee of each TCIC Trust will be a financial institution which will be unaffiliated with the Company and which shall act as property trustee and as indenture trustee for purposes of the Trust Indenture Act of 1939 (the "Trust Indenture Act"), pursuant to the terms set forth in a Prospectus Supplement (the "Property Trustee"). In addition, unless the Property Trustee maintains a principal place of business in the State of Delaware, and otherwise meets the requirements of applicable law, another TCIC Trustee of each TCIC Trust will have its principal place of business or reside in the State of Delaware (the "Delaware Trustee"). The Company will pay all fees, expenses, debts and obligations (other than the Trust Securities) related to the TCIC Trusts and the offering of Trust Securities. The office of the Delaware Trustee for each TCIC Trust in the State of Delaware is 400 White Clay Center, Route 273, Newark, Delaware 19711. The principal place of business of each TCIC Trust shall be c/o TCI Communications, Inc., 5619 DTC Parkway, Englewood, Colorado 80111 (telephone number (303) 267-5500). 4 ACCOUNTING TREATMENT The financial statements of each TCIC Trust that has issued Trust Securities will be consolidated with the Company's financial statements, with the Preferred Securities of each TCIC Trust shown on the Company's consolidated financial statements as Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debt securities of the Company. The Company's financial statements will include a footnote that discloses, among other things, that the sole asset of each TCIC Trust included therein consists of Subordinated Debt Securities of the Company, and will specify the designation, principal amount, interest rate and maturity date of such Subordinated Debt Securities. RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The following table sets forth the ratio of earnings to combined fixed charges and preferred stock dividends from continuing operations of the Company for the periods indicated.
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, --------------------------- ------------------ 1995 1994 1993 1992 1991 1996 1995 ---- ----- ----- ----- ---- -------- -------- Ratio of earnings to combined fixed charges and preferred stock dividends (1)......... -- 1.21x 1.22x 1.00x -- -- --
- -------- (1) The ratio of earnings to combined fixed charges and preferred stock dividends of the Company was 1.21, 1.22, and 1.00 for the years ended December 31, 1994, 1993 and 1992, respectively. The ratio of earnings to combined fixed charges and preferred stock dividends of the Company was less than 1.00 for the years ended December 31, 1995 and 1991, and for the nine months ended September 30, 1996 and 1995; thus, earnings available for combined fixed charges and preferred stock dividends were inadequate to cover combined fixed charges and preferred stock dividends for such periods. The amounts of the coverage deficiencies were $170 million and $177 million for the years ended December 31, 1995 and 1991, respectively, and $388 million and $63 million for the nine months ended September 30, 1996 and 1995, respectively. For the ratio calculations, earnings available for combined fixed charges and preferred stock dividends consists of earnings (losses) before income taxes plus fixed charges (minus capitalized interest), distributions from and losses of less than 50%-owned affiliates with debt not guaranteed by the Company (net of earnings not distributed of less than 50%-owned affiliates), minority interests in earnings (losses) of consolidated subsidiaries, the elimination of preferred stock dividend requirements of consolidated subsidiaries to 50%-owned affiliates, and preferred stock dividend requirements of 50%-owned affiliates, other than amounts to the Company. Combined fixed charges and preferred stock dividends consist of (i) interest (including capitalized interest) on debt, including interest of less than 50%-owned affiliates with debt guaranteed by the Company, (ii) the elimination of interest of consolidated subsidiaries to 50%-owned affiliates, (iii) the Company's proportionate share of interest of 50%- owned affiliates, (iv) that portion of rental expense the Company believes to be representative of interest (one-third of rental expense), (v) amortization of debt expense, (vi) that portion of minority interests in earnings (losses) of consolidated subsidiaries that represent the amount of pretax earnings that would be required to cover preferred stock dividend requirements of consolidated subsidiaries, (vii) that portion of the Company's earnings (losses) that represent the amount of pretax earnings that would be required to cover preferred stock dividend requirements of the Company, (viii) the elimination of preferred stock dividend requirements of consolidated subsidiaries to 50%-owned affiliates, and (ix) the preferred stock dividend requirements of 50%- owned affiliates, other than amounts to the Company. The Company has guaranteed the debt of certain less than 50%-owned affiliates and certain other entities in which it has an interest. Fixed charges of $5 million, $5 million, $14 million, $3 million and $1 million relating to such guarantees for the years ended December 31, 1995, 1994, 1993, 1992 and 1991, respectively, and fixed charges of $3 million and $3 million relating to such guarantees for the nine months ended September 30, 1996 and 1995, respectively, have not been included in fixed charges. 5 USE OF PROCEEDS Each TCIC Trust will invest all proceeds received from the sale of its Trust Securities in Subordinated Debt Securities. The Company will use the net proceeds from the sale of the Subordinated Debt Securities for general corporate purposes, including to redeem, repurchase or otherwise repay outstanding indebtedness, or for such other purposes as may be specified in an accompanying Prospectus Supplement. DESCRIPTION OF THE PREFERRED SECURITIES Each TCIC Trust may issue only one series of Preferred Securities having terms described in the Prospectus Supplement relating thereto. The Declaration of each TCIC Trust authorizes the Regular Trustees of such TCIC Trust to issue on behalf of such TCIC Trust one series of Preferred Securities. Each Declaration will be qualified as an indenture under the Trust Indenture Act. The Preferred Securities will have such terms, including distributions, redemption, voting, liquidation rights and such other preferred, deferred or other special rights or such restrictions as shall be set forth in each Declaration or made part of each Declaration by the Trust Indenture Act and the Trust Act. Reference is made to the Prospectus Supplement relating to the Preferred Securities of a TCIC Trust for specific terms, including (i) the distinctive designation of such Preferred Securities; (ii) the number of Preferred Securities issued by such TCIC Trust; (iii) the annual distribution rate (or method of determining such rate) for Preferred Securities issued by such TCIC Trust and the date or dates upon which such distributions shall be payable; provided, however, that distributions on such Preferred Securities shall be payable on a quarterly basis to holders of such Preferred Securities as of a record date in each quarter during which such Preferred Securities are outstanding; (iv) whether distributions on Preferred Securities issued by such TCIC Trust shall be cumulative, and, in the case of Preferred Securities having such cumulative distribution rights, the date or dates or method of determining the date or dates from which distributions on Preferred Securities issued by such TCIC Trust shall be cumulative; (v) the amount or amounts which shall be paid out of the assets of such TCIC Trust to purchase or redeem Preferred Securities issued by such TCIC Trust and the price or prices at which, the period or periods within which, and the terms and conditions upon which, Preferred Securities issued by such TCIC Trust shall be purchased or redeemed, in whole or in part, pursuant to such obligation; (vi) the voting rights, if any, of Preferred Securities issued by such TCIC Trust in addition to those required by law, including any requirement for the approval by the holders of Preferred Securities, or of Preferred Securities issued by one or more TCIC Trusts, or of both, as a condition to specified action or amendments to the Declaration of such TCIC Trust; and (vii) any other relevant rights, preferences, privileges, limitations or restrictions of Preferred Securities issued by such TCIC Trust not inconsistent with the Declaration of such TCIC Trust or with applicable law. All Preferred Securities offered hereby will be guaranteed by the Company to the extent set forth below under "Description of the Preferred Securities Guarantees." Any applicable United States federal income tax considerations applicable to any offering of Preferred Securities will be described in the Prospectus Supplement relating thereto. In connection with the issuance of Preferred Securities, each TCIC Trust will issue one series of Common Securities. The Declaration of each TCIC Trust authorizes the Regular Trustees of such trust to issue on behalf of such TCIC Trust one series of Common Securities having such terms including distributions, redemption, voting, liquidation rights or such restrictions as shall be set forth therein. The terms of the Common Securities issued by a TCIC Trust will be substantially identical to the terms of the Preferred Securities issued by such Trust and the Common Securities will rank pari passu, and payments will be made thereon pro rata, with the Preferred Securities except that, upon an event of default under the Declaration, the rights of the holders of the Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the Preferred Securities. All of the Common Securities of a TCIC Trust will be directly or indirectly owned by the Company. PROPOSED TAX LAW CHANGES Each TCIC Trust may invest the proceeds from the issuance of its Preferred Securities and Common Securities in a series of Subordinated Debt Securities. On December 7, 1995, the U.S. Treasury Department 6 proposed a series of tax law changes that would, among other things, prevent companies from deducting interest on debt instruments with a maturity of more than 40 years and on instruments with a maximum term of more than 20 years which are not shown as indebtedness on the consolidated balance sheet of the issuer. If the Company were to issue to a TCIC Trust a series of Subordinated Debt Securities that had a maximum term of more than 20 years and which the Company did not show as indebtedness on its consolidated balance sheet (see "Accounting Treatment"), or if such Subordinated Debt Securities were issued with a maturity of more than 40 years (or were otherwise within the scope of these proposals), then the Treasury Department's proposals, if enacted, would prevent the Company from deducting interest paid on such Subordinated Debt Securities. The Company cannot predict whether the proposed tax law changes will become law. However, the Chairmen of the House Ways and Means and Senate Finance Committees issued a joint statement on March 29, 1996 stating that the effective date of these proposals, if enacted, would be no earlier than the date of appropriate Congressional action. In addition, subsequent to the publication of such joint statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote letters to Treasury Department officials concurring with the view expressed in such joint statement. The Company will describe the effect of any proposed or enacted tax law changes arising after the date of this Prospectus in the Prospectus Supplement relating to any securities offered thereby. The December 7, 1995 proposed tax law changes would not alter the United States federal income tax consequences of the purchase, ownership and disposition of Preferred Securities or Subordinated Debt Securities. DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES Set forth below is a summary of information concerning the Preferred Securities Guarantees which will be executed and delivered by the Company for the benefit of the holders from time to time of Preferred Securities. Each Preferred Securities Guarantee will be qualified as an indenture under the Trust Indenture Act. The Bank of New York will act as indenture trustee under each Preferred Securities Guarantee (the "Preferred Guarantee Trustee"). The terms of each Preferred Securities Guarantee will be those set forth in such Preferred Securities Guarantee and those made part of such Preferred Securities Guarantee by the Trust Indenture Act. The following summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the form of Preferred Securities Guarantee, which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and the Trust Indenture Act. Each Preferred Securities Guarantee will be held by the Preferred Guarantee Trustee for the benefit of the holders of the Preferred Securities of the applicable TCIC Trust. GENERAL Pursuant to each Preferred Securities Guarantee, the Company will irrevocably and unconditionally agree, to the extent set forth therein, to pay in full, to the holders of the Preferred Securities issued by a TCIC Trust, the Guarantee Payments (as defined herein) (except to the extent paid by such TCIC Trust), as and when due, regardless of any defense, right to set-off or counterclaim which such TCIC Trust may have or assert. The following payments with respect to Preferred Securities issued by a TCIC Trust, to the extent not paid by such TCIC Trust (the "Guarantee Payments"), will be subject to the Preferred Securities Guarantee thereon (without duplication): (i) any accrued and unpaid distributions which are required to be paid on such Preferred Securities, to the extent such TCIC Trust shall have funds available therefor, (ii) the redemption price, including all accrued and unpaid distributions to the redemption date (the "Redemption Price"), to the extent such TCIC Trust has funds available therefor, with respect to any Preferred Securities called for redemption by such TCIC Trust and (iii) upon a voluntary or involuntary termination, dissolution or winding-up of such TCIC Trust (other than in connection with the distribution of Subordinated Debt Securities to the holders of Preferred Securities in exchange for their Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid distributions on such Preferred Securities to the date of payment and (b) the amount of assets of such TCIC Trust remaining available for distribution to holders of such Preferred Securities in liquidation of such TCIC Trust. The Company's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Company to the holders of Preferred Securities or by causing the applicable TCIC Trust to pay such amounts to such holders. 7 Each Preferred Securities Guarantee will be a full and unconditional guarantee with respect to the Preferred Securities issued by the applicable TCIC Trust from the time of issuance of such Preferred Securities, but will not apply to any payment of distributions when the TCIC Trust does not have sufficient funds available to make such payment or distributions. If the Company does not make interest payments on the Subordinated Debt Securities purchased by a TCIC Trust, such TCIC Trust will not pay distributions on the Preferred Securities issued by such TCIC Trust and will not have funds available therefor. See "Description of the Subordinated Debt Securities-- Certain Covenants." The Company has also agreed separately to guarantee the obligations of the TCIC Trusts with respect to the Common Securities (the "Common Securities Guarantees") to the same extent as the Preferred Securities Guarantee, except that upon the occurrence and during the continuation of an event of default under the Indenture (as hereinafter defined), holders of Preferred Securities shall have priority over holders of Common Securities with respect to distributions and payments on liquidation, redemption or otherwise. CERTAIN COVENANTS OF THE COMPANY In each Preferred Securities Guarantee, the Company will covenant that, so long as any Preferred Securities issued by the applicable TCIC Trust remain outstanding, if there shall have occurred any event that would constitute an event of default under such Preferred Securities Guarantee or the Declaration of such TCIC Trust, 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 such Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Security Guarantees) with respect to the foregoing. However, each Preferred Security Guarantee will except from the foregoing covenant any dividend, redemption, liquidation, interest, principal or guarantee payment 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, liquidation, interest, principal or guarantee payment is being made or (ii) securities (including capital stock) of TCI. MODIFICATION OF THE PREFERRED SECURITIES GUARANTEES; ASSIGNMENT Except with respect to any changes which do not adversely affect the rights of holders of Preferred Securities (in which case no vote will be required), each Preferred Securities Guarantee may be amended only with the prior approval of the holders of not less than 66 2/3% in liquidation amount of the outstanding Preferred Securities issued by the applicable TCIC Trust. The manner of obtaining any such approval of holders of such Preferred Securities will be as set forth in an accompanying Prospectus Supplement. All guarantees and agreements contained in a Preferred Securities Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Company and shall inure to the benefit of the holders of the Preferred Securities then outstanding of the applicable TCIC Trust. TERMINATION Each Preferred Securities Guarantee will terminate as to the Preferred Securities issued by the applicable TCIC Trust upon full payment of the Redemption Price of all Preferred Securities of such TCIC Trust, upon distribution of the Subordinated Debt Securities held by such TCIC Trust to the holders of the Preferred Securities of such TCIC Trust in liquidation of such holders' interest in such Preferred Securities or upon full payment of the amounts payable in accordance with the Declaration of such TCIC Trust upon liquidation of such TCIC Trust. Each 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 issued by the applicable TCIC Trust must restore payment of any sums paid under such Preferred Securities or such Preferred Securities Guarantee. EVENTS OF DEFAULT An event of default under a Preferred Securities Guarantee will occur upon the failure of the Company to perform any of its payment or other obligations thereunder. 8 The holders of a majority in liquidation amount of the Preferred Securities relating to such Preferred Securities Guarantee have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Guarantee Trustee in respect of such Preferred Securities Guarantee or to direct the exercise of any trust or power conferred upon the Preferred Guarantee Trustee under such Preferred Securities Guarantee. If the Preferred Guarantee Trustee fails to enforce such Preferred Securities Guarantee, any holder of Preferred Securities relating to such Preferred Securities Guarantee may institute a legal proceeding directly against the Company to enforce the Preferred Guarantee Trustee's rights under such Preferred Securities Guarantee, without first instituting a legal proceeding against the relevant TCIC Trust, the Preferred Guarantee Trustee or any other person or entity. In addition, any record holder of Preferred Securities relating to such Preferred Securities Guarantee shall have the right, which is absolute and unconditional, to proceed directly against the Company to obtain Guarantee Payments thereunder, without first waiting to determine if the Preferred Guarantee Trustee has enforced such Preferred Security Guarantee or instituting a legal proceeding against the TCIC Trust which issued such Preferred Securities, the Preferred Guarantee Trustee or any other person or entity. STATUS OF THE PREFERRED SECURITIES GUARANTEES The Preferred Securities Guarantees will constitute unsecured obligations of the Company and will rank (i) subordinate and junior in right of payment to all other liabilities of the Company, (ii) pari passu with the most senior preferred or preference stock now or hereafter issued by the Company and with any guarantee now or hereafter entered into by the Company in respect of any preferred or preference stock of any subsidiary or affiliate of the Company and (iii) senior to the Company's common stock. The terms of the Preferred Securities provide that each holder of Preferred Securities issued by such TCIC Trust by acceptance thereof agrees to the subordination provisions and other terms of the Preferred Securities Guarantee relating thereto. The Preferred Securities Guarantees will constitute a guarantee of payment and not of collection (that is, the guaranteed party may institute a legal proceeding directly against the guarantor to enforce its rights under the guarantee without instituting a legal proceeding against any other person or entity). The Company's obligations under the Declaration for each TCIC Trust, the Preferred Securities Guarantee with respect to the Preferred Securities issued by such Trust, the Subordinated Debt Securities purchased by such TCIC Trust and the Indenture, in the aggregate, will provide a full and unconditional guarantee by the Company of payments due on the Preferred Securities issued by such TCIC Trust. INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE The Preferred Guarantee Trustee, prior to the occurrence of a default with respect to a Preferred Securities Guarantee, undertakes to perform only such duties as are specifically set forth in such Preferred Securities Guarantee and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provisions, the Preferred Guaranteed Trustee is under no obligation to exercise any of the powers vested in it by the Preferred Securities Guarantee at the request of any holder of Preferred Securities, unless offered reasonable indemnity against the costs, expenses and liabilities which might be incurred thereby. The Company and certain of its affiliates maintain deposit accounts and banking relationships with the Preferred Guarantee Trustee. The Preferred Guarantee Trustee serves as trustee under other indentures pursuant to which unsecured debt securities of the Company are outstanding. GOVERNING LAW The Preferred Securities Guarantees will be governed by and construed in accordance with the internal laws of the State of New York. 9 DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES Subordinated Debt Securities may be issued from time to time in one or more series under an Indenture, dated as of January 29, 1996 (the "Indenture"), among the Company and The Bank of New York, as Trustee (the "Debt Trustee"). The terms of the Subordinated Debt Securities will include those stated in the Indenture and in a Supplemental Indenture (as defined below) and those made part of the Indenture by reference to the Trust Indenture Act. The following summary does not purport to be complete and is subject in all respects to the provisions of, and is qualified in its entirety by reference to, the Indenture, which is filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and the Trust Indenture Act. Whenever particular provisions or defined terms in the Indenture are referred to herein, such provisions or defined terms are incorporated by reference herein. GENERAL The Subordinated Debt Securities will be unsecured, subordinated obligations of the Company. The Indenture does not limit the aggregate principal amount of Subordinated Debt Securities which may be issued thereunder and provides that the Subordinated Debt Securities may be issued from time to time in one or more series. The Subordinated Debt Securities are issuable in one or more series pursuant to an indenture supplemental to the Indenture or a resolution of the Company's Board of Directors or a special committee thereof (each, a "Supplemental Indenture"). In the event Subordinated Debt Securities are issued to a TCIC Trust or a trustee of such Trust in connection with the issuance of Trust Securities by such TCIC Trust, such Subordinated Debt Securities subsequently may be distributed pro rata to the holders of such Trust Securities in connection with the termination of such TCIC Trust upon the occurrence of certain events described in the Prospectus Supplement relating to such Trust Securities. Only one series of Subordinated Debt Securities will be issued to a TCIC Trust or a trustee of such Trust in connection with the issuance of Trust Securities by such TCIC Trust. Reference is made to the accompanying Prospectus Supplement for the following terms of the series of Subordinated Debt Securities being offered thereby: (i) the specific title of such Subordinated Debt Securities; (ii) any limit on the aggregate principal amount of such Subordinated Debt Securities; (iii) the date or dates on which the principal of such Subordinated Debt Securities is payable and the right, if any, to extend such date or dates; (iv) the rate or rates at which such Subordinated Debt Securities will bear interest or the method of determination of such rate or rates; (v) the date or dates from which such interest shall accrue, the interest payment dates on which such interest will be payable or the manner of determination of such interest payment dates and the record dates for the determination of holders to whom interest is payable on any such interest payment dates; (vi) the right, if any, to extend the interest payment periods and the duration of such extension; (vii) the period or periods within which, the price or prices at which, and the terms and conditions upon which, such Subordinated Debt Securities may be redeemed, in whole or in part, at the option of the Company; (viii) the right and/or obligation, if any, of the Company to redeem or purchase such Subordinated Debt Securities pursuant to any sinking fund or analogous provisions or at the option of the holder thereof and the period or periods during which, the price or prices at which, and the terms and conditions upon which, such Subordinated Debt Securities shall be redeemed or purchased, in whole or part, pursuant to such right and/or obligation; (ix) the terms of subordination; (x) if other than denominations of $25 or any integral multiple thereof, the denominations in which such Subordinated Debt Securities shall be issuable; (xi) any and all other terms with respect to such series; and (xii) whether such Subordinated Debt Securities are issuable as a global security, and in such case, the identity of the depositary. The Indenture does not contain any provisions that afford holders of Subordinated Debt Securities protection in the event of a highly leveraged transaction involving the Company. SUBORDINATION The Subordinated Debt Securities will be subordinated and junior in right of payment to certain other indebtedness of the Company to the extent set forth in the accompanying Prospectus Supplement. 10 CERTAIN COVENANTS If Subordinated Debt Securities are issued to a TCIC Trust or a trustee of such Trust in connection with the issuance of Trust Securities by such TCIC Trust and (i) there shall have occurred and be continuing any event that would constitute an Event of Default under the Indenture or (ii) the Company shall be in default with respect to its payment of any obligations under the related Preferred Securities Guarantee or Common Securities Guarantee, and such default shall be continuing, 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 such Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Security Guarantees) with respect to the foregoing. If Subordinated Debt Securities are issued to a TCIC Trust or a trustee of such Trust in connection with the issuance of Trust Securities by such TCIC Trust and the Company shall have given notice of its election to defer payments of interest on such Subordinated Debt Securities by extending the interest payment period as provided in the Indenture and such period, or any extension thereof, shall be continuing, 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 such Subordinated Debt Securities and (c) the Company shall not make any guarantee payments (other than pursuant to the Preferred Security Guarantees) with respect to the foregoing. Notwithstanding the foregoing restrictions, the Company will be permitted, in any event, to make dividend, redemption, liquidation and guarantee payments on capital stock, and interest, principal, redemption and guarantee payments on debt securities issued by the Company ranking pari passu with or junior to Subordinated Debt Securities, 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 TCI. In the event Subordinated Debt Securities are issued to a TCIC Trust or a trustee of such Trust in connection with the issuance of Trust Securities of such TCIC Trust, for so long as such Trust Securities remain outstanding, the Company will covenant (i) to directly or indirectly maintain 100% ownership of the Common Securities of such TCIC Trust; provided, however, that any permitted successor of the Company under the Indenture may succeed to the Company's ownership of such Common Securities, (ii) not to cause, as sponsor of such TCIC Trust, or to permit, as holder of the Common Securities of such TCIC Trust, the termination, dissolution or winding-up of such TCIC Trust, except in connection with a distribution of the Subordinated Debt Securities as provided in the Declaration and in connection with certain mergers, consolidations or amalgamations, (iii) to use its reasonable efforts to cause such TCIC Trust (a) to remain a statutory business trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Trust Securities in liquidation of such TCIC Trust, the redemption of all of the Trust Securities of such TCIC Trust, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration of such TCIC Trust, and (b) to otherwise continue not to be classified as an association taxable as a corporation or partnership for United States federal income tax purposes and (iv) to use reasonable efforts to cause each holder of Trust Securities of such TCIC Trust to be treated as owning an undivided beneficial interest in the Subordinated Debt Securities issued to such TCIC Trust. FORM, EXCHANGE, REGISTRATION AND TRANSFER Subordinated Debt Securities of each series will be issued in registered form and in either certificated form or represented by one or more global securities. If not represented by one or more global securities, Subordinated Debt Securities may be presented for registration of transfer (with the form of transfer endorsed thereon duly executed) or exchange at the office of the Debt Registrar or at the office of any transfer agent designated by the Company for such purpose with respect to any series of Subordinated Debt Securities and referred to in an applicable Prospectus Supplement, without service charge and upon payment of any taxes and other governmental charges as described in the Indenture. Such transfer or exchange will be effected upon the Debt 11 Registrar or such transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. The Company has appointed the Debt Trustee as Debt Registrar with respect to each series of Subordinated Debt Securities. If a Prospectus Supplement refers to any transfer agents (in addition to the Debt Registrar) initially designated by the Company with respect to any series of Subordinated Debt Securities, the Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which any such transfer agent acts, except that the Company will be required to maintain a transfer agent in each Place of Payment for such series. The Company may at any time designate additional transfer agents with respect to any series of Subordinated Debt Securities. In the event of any redemption in part, the Company shall not be required to (i) issue, register the transfer of or exchange any Subordinated Debt Securities during a period beginning at the opening of business 15 days before any selection for redemption of Subordinated Debt Securities of like tenor and of the series of which such Subordinated Debt Securities are a part, and ending at the close of business on the earliest date on which the relevant notice of redemption is deemed to have been given to all holders of Subordinated Debt Securities of like tenor and of such series to be redeemed and (ii) register the transfer of or exchange any Subordinated Debt Securities so selected for redemption, in whole or in part, except the unredeemed portion of any Subordinated Debt Securities being redeemed in part. PAYMENT AND PAYING AGENTS Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of and premium, if any, on any Subordinated Debt Securities will be made only against surrender to the Paying Agent of such Subordinated Debt Securities. Unless otherwise indicated in an applicable Prospectus Supplement, principal of, any premium, if any, and interest, if any, on Subordinated Debt Securities will be payable, subject to any applicable laws and regulations, at the office of such Paying Agent or Paying Agents as the Company may designate from time to time, except that at the option of the Company, payment of any interest may be made by check mailed to the address of the person entitled thereto as such address as shall appear in the Debt Register with respect to such Subordinated Debt Securities. Unless otherwise indicated in an applicable Prospectus Supplement, payment of interest on a Subordinated Debt Security on any Interest Payment Date will be made to the person in whose name such Subordinated Debt Security (or predecessor security) is registered at the close of business on the Regular Record Date for such interest payment. The Debt Trustee will act as Paying Agent with respect to each series of Subordinated Debt Securities. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agents or approve a change in the office through which any Paying Agent acts, except that the Company will be required to maintain a Paying Agent in each Place of Payment for each series of Subordinated Debt Securities. All moneys paid by the Company to a Paying Agent for the payment of the principal of or premium or interest, if any, on any Subordinated Debt Securities of any series which remain unclaimed at the end of two years after such principal or premium or interest, if any, shall have become due and payable will be repaid to the Company and the holder of such Subordinated Debt Securities will thereafter look only to the Company for payment thereof. GLOBAL SECURITIES If any Subordinated Debt Securities of a series are represented by one or more global securities (each, a "Global Security"), the applicable Prospectus Supplement will describe the circumstances, if any, under which beneficial owners of interests in any such Global Security may exchange such interests for Subordinated Debt Securities of such series and of like tenor and principal amount in any authorized form and denomination. Principal of and any premium, if any, and interest on a Global Security will be payable in the manner described in the applicable Prospectus Supplement. The specific terms of the depositary arrangement with respect to any portion of a series of Subordinated Debt Securities to be represented by a Global Security will be described in the applicable Prospectus Supplement. 12 MODIFICATION OF THE INDENTURE The Indenture contains provisions permitting the Company and the Debt Trustee, with the consent of the holders of not less than a majority in principal amount of the Subordinated Debt Securities of each series which are affected by the modification, to modify the Indenture or any supplemental indenture affecting that series or the rights of the holders of that series of Subordinated Debt Securities; provided that no such modification may, without the consent of the holder of each outstanding Subordinated Debt Security affected thereby, (i) extend the fixed maturity of any Subordinated Debt Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the holder of each Subordinated Debt Security so affected or (ii) reduce the percentage of Subordinated Debt Securities the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each then outstanding Subordinated Debt Security affected thereby. In addition, the Company and the Debt Trustee may execute, without the consent of any holder of Subordinated Debt Securities, any supplemental indenture for certain other usual purposes including the creation of any new series of Subordinated Debt Securities. EVENTS OF DEFAULT With respect to a particular series of Subordinated Debt Securities, the Indenture provides (or the Supplemental Indenture for such series will provide) that any one or more of the following described events which has occurred and is continuing constitutes an "Event of Default" with respect to such series of Subordinated Debt Securities: (a) failure for 30 days to pay interest on the Subordinated Debt Securities of that series, including any Additional Interest in respect thereof, when due; provided, however, that a valid extension of the interest payment period by the Company shall not constitute a default in the payment of interest for this purpose; or (b) failure to pay principal or premium, if any, on the Subordinated Debt Securities of that series when due whether at maturity, upon redemption, by declaration or otherwise, or to make any sinking fund payment with respect to that series; or (c) failure to observe or perform any other covenant (other than those specifically relating to another series) contained in the Indenture for 90 days after written notice to the Company from the Debt Trustee or the holders of at least 25% in principal amount of the outstanding Subordinated Debt Securities of that series; or (d) certain events of bankruptcy, insolvency or reorganization of the Company; or (e) in the event Subordinated Debt Securities are issued to a TCIC Trust or a trustee of such Trust in connection with the issuance of Trust Securities by such TCIC Trust, the voluntary or involuntary dissolution, winding-up or termination of such TCIC Trust, except in connection with the distribution of Subordinated Debt Securities to the holders of Trust Securities in liquidation of such TCIC Trust, the redemption of all of the Trust Securities of such TCIC Trust, or certain mergers, consolidations or amalgamations, each as permitted by the Declaration of such TCIC Trust. The holders of a majority in aggregate outstanding amount of any series of Subordinated Debt Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Debt Trustee for the series. The Debt Trustee or the holders of not less than 25% in aggregate outstanding principal amount of any particular series of the Subordinated Debt Securities may declare the principal immediately due and payable upon an Event of Default with respect to such series, but the holders of a majority in aggregate outstanding principal amount of such series may annul such declaration and waive the default with respect to such series if the Event of Default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration and any applicable premium has been deposited with the Debt Trustee. If an Event of Default results from the failure of the Company to pay when due principal of or interest on the Subordinated Debt Securities issued to a TCIC Trust, during the continuance of such an Event of Default a holder of Preferred Securities issued by such TCIC Trust may immediately institute a legal proceeding 13 directly against the Company to obtain payment of such principal or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned of record by such holder. The holders of a majority in aggregate outstanding principal amount of any series of Subordinated Debt Securities affected thereby may, on behalf of the holders of all the Subordinated Debt Securities of such series, waive any past default, except (i) a default in the payment of principal, premium, if any, or interest (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal due otherwise than by acceleration and any applicable premium has been deposited with the Debt Trustee) or (ii) a default in the covenants described in the first or second paragraph under "--Certain Covenants" above. CONSOLIDATION, MERGER AND SALE The Indenture does not contain any covenant which restricts the ability of the Company to merge or consolidate with or into any other corporation, sell or convey all or substantially all of its assets to any person, firm or corporation or otherwise engage in restructuring transactions. DEFEASANCE AND DISCHARGE Under the terms of the Indenture, the Company will be discharged from any and all obligations in respect of the Subordinated Debt Securities of any series (except in each case for certain obligations to register the transfer or exchange of Subordinated Debt Securities, replace, stolen, lost or mutilated Subordinated Debt Securities, maintain paying agencies and hold moneys for payment in trust) if the Company deposits with the Debt Trustee, in trust, moneys or Government Obligations in an amount sufficient to pay all the principal of, and interest on, the Subordinated Debt Securities of such series on the dates such payments are due in accordance with the terms of such Subordinated Debt Securities. GOVERNING LAW The Indenture and the Subordinated Debt Securities will be governed by, and construed in accordance with, the internal laws of the State of New York. INFORMATION CONCERNING THE DEBT TRUSTEE The Debt Trustee, prior to default, undertakes to perform only such duties as are specifically set forth in the Indenture and, after default, shall exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Subject to such provision, the Debt Trustee is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder of Subordinated Debt Securities, unless offered reasonable indemnity by such holder against the costs, expenses and liabilities which might be incurred thereby. The Debt Trustee is not required to expend or risk its own funds or otherwise incur personal financial liability in the performance of its duties if the Debt Trustee reasonably believes that repayment or adequate indemnity is not reasonably assured to it. The Company and certain of its affiliates maintain a deposit account and banking relationship with the Debt Trustee. The Debt Trustee serves as trustee under other indentures pursuant to which unsecured debt securities of the Company are outstanding. MISCELLANEOUS The Company will have the right at all times to assign any of its rights or obligations under the Indenture to a direct or indirect wholly-owned subsidiary of the Company; provided, that in the event of any such assignment, the Company will remain liable for all of its obligations thereunder. Subject to the foregoing, the Indenture will be binding upon and inure to the benefit of the parties thereto and their respective successors and assigns. The Indenture provides that it may not otherwise be assigned by the parties thereto. 14 PLAN OF DISTRIBUTION The Company may sell any series of Subordinated Debt Securities and the TCIC Trusts may sell the Preferred Securities in one or more of the following ways from time to time: (i) to or through underwriters or dealers, (ii) directly to purchasers or (iii) through agents. The Prospectus Supplement with respect to any Offered Securities will set forth (i) the terms of the offering of such Offered Securities, including the name or names of any underwriters, dealers or agents, (ii) the purchase price of such Offered Securities and the proceeds to the Company or the applicable TCIC Trust, as the case may be, from such sale, (iii) any underwriting discounts and commissions or agency fees and other item's constituting underwriters' or agents' compensation, (iv) any initial public offering prices, (v) any discounts or concessions allowed or reallowed or paid to dealers and (vi) any securities exchange or other securities market on which such Offered Securities may be listed. If underwriters are used in the sale, the Offered Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The Offered Securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. The underwriter or underwriters with respect to a particular underwritten offering of Offered Securities will be named in the Prospectus Supplement relating to such offering and, if any underwriting syndicate is used, the managing underwriter or underwriters will be set forth on the cover of the Prospectus Supplement. Unless otherwise set forth in the Prospectus Supplement relating thereto, the obligations of the underwriters to purchase the Offered Securities will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all the Offered Securities if any are purchased. If dealers are utilized in the sale of Offered Securities, the Company or the applicable TCIC Trust will sell such Offered Securities to the dealers as principals. The dealers may then resell such Offered Securities to the public at varying prices to be determined by such dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the Prospectus Supplement relating thereto. Any series of Subordinated Debt Securities may be sold from time to time either directly by the Company or through agents designated by the Company. Any series of Preferred Securities may be sold from time to time either directly by the applicable TCIC Trust or by agents of the applicable TCIC Trust designated by such TCIC Trust. Any agent involved in the offer or sale of the Offered Securities in respect to which this Prospectus is delivered will be named, and any commissions payable by the Company or the applicable TCIC Trust to such agent will be set forth, in the Prospectus Supplement relating thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. The Subordinated Debt Securities may be sold directly by the Company and the Preferred Securities may be sold directly by the applicable TCIC Trust to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. The terms of any such sales will be described in the Prospectus Supplement relating thereto. If so indicated in the Prospectus Supplement, the Company or the applicable TCIC Trust will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase Offered Securities from the Company or such TCIC Trust at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the Prospectus Supplement, and the Prospectus Supplement will set forth the commission payable for solicitation of such contracts. Underwriters, dealers and agents may be entitled under agreements entered into with the Company or the applicable TCIC Trust (or both) to indemnification by the Company or such TCIC Trust (or both) against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for the Company and its affiliates in the ordinary course of business. 15 Each series of Offered Securities will be a new issue of securities and will have no established trading market. Any underwriters to whom Offered Securities are sold by the Company or by a TCIC Trust for public offering and sale may make a market in such Offered Securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. The Offered Securities may or may not be listed on a national securities exchange. No assurance can be given that there will be a market for the Offered Securities. LEGAL MATTERS Certain matters of Delaware law relating to the validity of the Preferred Securities will be passed upon on behalf of the TCIC Trusts by Richards, Layton & Finger, special Delaware counsel to the TCIC Trusts. The validity of the Subordinated Debt Securities and the Preferred Securities Guarantees will be passed upon on behalf of the Company by Baker & Botts, L.L.P., New York, New York. Jerome H. Kern, special counsel to Baker & Botts, L.L.P., is a director of Tele-Communications, Inc., which owns all of the common stock of the Company. Certain attorneys with Baker & Botts, L.L.P. hold options to purchase shares of TCI's Tele-Communications, Inc. Series A TCI Group Common Stock and hold restricted shares and options to purchase shares of Tele- Communications, Inc. Series A Liberty Media Group Common Stock. Certain legal matters will be passed upon on behalf of any underwriters by Brown & Wood LLP, New York, New York. EXPERTS The consolidated balance sheets of TCI Communications, Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of operations, stockholder's(s') equity, and cash flows for each of the years in the three-year period ended December 31, 1995, and all related financial statement schedules, which appear in the December 31, 1995 Annual Report on Form 10-K of TCI Communications, Inc., have been incorporated by reference herein in reliance upon the reports, dated March 18, 1996, of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The combined balance sheets of Cablevision (a combination of certain cable television assets of Cablevision S.A., Televisora Belgrano S.A., Construed S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and the related combined statements of operations and deficit and cash flows for each of the years in the three-year period ended December 31, 1994, which appear in the Current Report on Form 8-K of TCI Communications, Inc. dated April 20, 1995, as amended, have been incorporated by reference herein in reliance upon the report, dated March 24, 1995, of KPMG Finsterbusch Pickenhayn Sibille, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The combined financial statements of VII Cable which appear in TCI Communications, Inc.'s Current Report on Form 8-K dated June 19, 1996, have been incorporated by reference herein in reliance on the report dated February 14, 1996 of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 16 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TCI COMMUNICATIONS, INC., TCI COMMUNICATIONS FINANCING III OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF TCI COMMUNICATIONS, INC. OR TCI COMMUNICATIONS FINANCING III SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ---------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE ---- Prospectus Summary....................................................... S-4 Risk Factors............................................................. S-6 The Company.............................................................. S-10 The Trust................................................................ S-10 Selected Financial Information of the Company............................ S-12 Capitalization of the Company............................................ S-14 Accounting Treatment..................................................... S-15 Use of Proceeds.......................................................... S-15 Description of the Preferred Securities.................................. S-15 Description of the Preferred Securities Guarantee........................ S-26 Description of the Subordinated Debt Securities.......................... S-29 Effect of Obligations Under the Subordinated Debt Securities and the Preferred Securities Guarantee.......................................... S-37 Certain Federal Income Tax Consequences.................................. S-38 Underwriting............................................................. S-41 Legal Matters............................................................ S-43 Definitions.............................................................. S-44 PROSPECTUS Available Information.................................................... 2 Incorporation of Documents by Reference.................................. 3 The Company.............................................................. 4 The TCI Communications Financing Trusts.................................. 4 Accounting Treatment..................................................... 5 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends............................................................... 5 Use of Proceeds.......................................................... 6 Description of the Preferred Securities.................................. 6 Description of the Preferred Securities Guarantees....................... 7 Description of the Subordinated Debt Securities.......................... 10 Plan of Distribution..................................................... 15 Legal Matters............................................................ 16 Experts.................................................................. 16
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [ ] PREFERRED SECURITIES TCI COMMUNICATIONS FINANCING III % TRUST PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY TCI COMMUNICATIONS, INC. ---------------- PROSPECTUS SUPPLEMENT ---------------- LEHMAN BROTHERS MERRILL LYNCH & CO. , 1996 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The aggregate estimated expenses, other than underwriting discounts and commissions, in connection with the offering pursuant to this Registration Statement are currently anticipated to be as follows: Registration Fee.................................................. $151,516 Blue Sky Fees and Expenses (including counsel fees)............... 15,000 Printing and Engraving Expenses................................... 200,000 Legal Fees and Expenses........................................... 50,000 Accounting Fees and Expenses...................................... 25,000 Rating Agency Fees................................................ 50,000 Miscellaneous..................................................... 5,000 -------- Total........................................................... $496,516 ========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law provides, generally, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding (except actions by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. A corporation may similarly indemnify such person for expenses actually and reasonably incurred by him in connection with the defense or settlement of any action or suit by or in the right of the corporation, provided such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in the case of claims, issues and matter as to which such person shall have been adjudged liable to the corporation, provided that a court shall have determined, upon application, that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL") provides, generally, that the certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of Title 8 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision may eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective. Section D of Article V of the Company's Restated Certificate of Incorporation provides as follows: 1. Limitation On Liability. To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this paragraph 1 shall be prospective only and shall not adversely affect any limitation, right or protection of a director of the Corporation existing at the time of such repeal or modification. II-1 2. Indemnification. (a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such person. Such right of indemnification shall inure whether or not the claim asserted is based on matters which antedate the adoption of this Section D. The Corporation shall be required to indemnify a person in connection with a proceeding (or part thereof) initiated by such person only if the proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. (b) PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses (including attorneys' fees) incurred by a director or officer in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this paragraph or otherwise. (c) CLAIMS. If a claim for indemnification or payment of expenses under this paragraph is not paid in full within 60 days after a written claim therefor has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law. (d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this paragraph shall not be exclusive of any other rights which such person may have or hereafter acquires under any statute, provision of this Certificate, the Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. (e) OTHER INDEMNIFICATION. The Corporation's obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or nonprofit entity. 3. Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Section D shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification. The Company may purchase liability insurance policies covering its directors and officers. In addition, pursuant to Section 6 of the form of Purchase Agreement, the Underwriters will agree to indemnify and hold harmless the Company and each Trust and their respective directors, officers and trustees and each person, if any, who controls the Company or each Trust within the meaning of the Securities Act of 1933, as amended, against certain civil liabilities including civil liabilities under the Securities Act. II-2 ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ------- ----------------------- 1 Form of Purchase Agreement. 4.1 Certificate of Trust of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.3 to the Registration Statement on Form S-3, No. 33-64525, of TCI Communications, Inc., TCI Communications Financing I, TCI Communications Financing II, TCI Communications Financing III and TCI Communications Financing IV (collectively, the "Filers")). 4.2 Certificate of Trust of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.4 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.3 Certificate of Trust of TCI Communications Financing V. 4.4 Certificate of Trust of TCI Communications Financing VI. 4.5 Declaration of Trust of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.7 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.6 Declaration of Trust of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.8 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.7 Declaration of Trust of TCI Communications Financing V. 4.8 Declaration of Trust of TCI Communications Financing VI. 4.9 Form of Amended and Restated Declaration of Trust of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.11 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.10 Form of Amended and Restated Declaration of Trust of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.12 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.11 Form of Amended and Restated Declaration of Trust of TCI Communications Financing V. 4.12 Form of Amended and Restated Declaration of Trust of TCI Communications Financing VI. 4.13 Indenture between TCI Communications, Inc. and the Bank of New York, as Trustee, dated as of January 29, 1996. 4.14 Form of Third 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 III (incorporated herein by reference to Exhibit 4.17 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.16 Form of Guarantee Agreement with respect to Preferred Securities of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.18 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.17 Form of Guarantee Agreement with respect to Preferred Securities of TCI Communications Financing V. 4.18 Form of Guarantee Agreement with respect to Preferred Securities of TCI Communications Financing VI. 4.19 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.21 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.20 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.22 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.21 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing V. 4.22 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing VI.
II-3
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ------- ----------------------- *5.1 Opinion of Baker & Botts, L.L.P. regarding the legality of the securities being registered. *5.2 Opinion of Richards, Layton & Finger, P.A. 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 KPMG Finsterbusch Pickenhayn Sibille. 23.3 Consent of Price Waterhouse, LLP. *23.4 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1 and Exhibit 8). *23.5 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2) 24 Powers of Attorney (included on pages II-9 to II-13). 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 III, on Form T- 1. 25.3 Statement of Eligibility of The Bank of New York, as Trustee for Preferred Securities of TCI Communications Financing IV, on Form T-1. 25.4 Statement of Eligibility of The Bank of New York, as Trustee for Preferred Securities of TCI Communications Financing V, on Form T-1. 25.5 Statement of Eligibility of The Bank of New York, as Trustee for Preferred Securities of TCI Communications Financing VI, 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 III, 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 IV, 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 V, 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 VI, on Form T-1.
- -------- * To be filed by amendment. II-4 ITEM 17. UNDERTAKINGS. THE UNDERSIGNED REGISTRANTS HEREBY UNDERTAKE: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of the prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497 (h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (6) For the purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, II-5 therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-6 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON NOVEMBER 27, 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 REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON NOVEMBER 27, 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 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON NOVEMBER 27, 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 PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON NOVEMBER 27, 1996. TCI Communications Financing V /s/ Stephen M. Brett By: _________________________________ Name: Stephen M. Brett Title: Trustee /s/ Bernard W. Schotters By: _________________________________ Name: Bernard W. Schotters Title: Trustee II-7 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF GREENWOOD VILLAGE, STATE OF COLORADO, ON NOVEMBER 27, 1996. TCI Communications Financing VI /s/ Stephen M. Brett By: _________________________________ Name: Stephen M. Brett Title: Trustee /s/ Bernard W. Schotters By: _________________________________ Name: Bernard W. Schotters Title: Trustee II-8 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stephen M. Brett, Esq. and Pamela L. Coe, Esq. and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and re-substitution for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in- fact and agents and each of them full power and authority, to do and perform each and every act and thing requisite or necessary to be done in and about the premises, to all intents and purposes and as fully as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS (WHICH PERSONS CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS) IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ John C. Malone Chairman of the Board November 27, 1996 ______________________________________ and Director of (JOHN C. MALONE) TCI Communications, Inc. /s/ Donne F. Fisher Director of TCI November 27, 1996 ______________________________________ Communications, Inc. (DONNE F. FISHER) /s/ Kim Magness Director of TCI November 27, 1996 ______________________________________ Communications, Inc. (KIM MAGNESS) /s/ John W. Gallivan Director of TCI November 27, 1996 ______________________________________ Communications, Inc. (JOHN W. GALLIVAN) /s/ Brendan R. Clouston President and Chief November 27, 1996 ______________________________________ Executive Officer of (BRENDAN R. CLOUSTON) TCI Cmmunications, Inc. (Principal Executive Officer) /s/ Bernard W. Schotters Senior Vice President of November 27, 1996 ______________________________________ TCI Communications, (BERNARD W. SCHOTTERS) Inc. (Principal Financial Officer) /s/ Gary K. Bracken Senior Vice President November 27, 1996 ______________________________________ and Controller of TCI (GARY K. BRACKEN) Communications, Inc. (Principal Accounting Officer)
II-9 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS LIS SHELTON AND PAMELA L. COE, ESQ. AND EACH OF THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS WITH FULL POWER OF SUBSTITUTION AND RE-SUBSTITUTION FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS (INCLUDING POST- EFFECTIVE AMENDMENTS) TO THIS REGISTRATION STATEMENT AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS AND EACH OF THEM FULL POWER AND AUTHORITY, TO DO AND PERFORM EACH AND EVERY ACT AND THING REQUISITE OR NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, TO ALL INTENTS AND PURPOSES AND AS FULLY AS THEY MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEYS-IN-FACT AND AGENTS OR THEIR SUBSTITUTES MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ Stephen M. Brett Trustee of TCI November 27, 1996 ______________________________________ Communications (STEPHEN M. BRETT) Financing III /s/ Bernard W. Schotters Trustee of TCI November 27, 1996 ______________________________________ Communications (BERNARD W. SCHOTTERS) Financing III
II-10 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Lis Shelton and Pamela L. Coe, Esq. and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and re-substitution for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post- effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them full power and authority, to do and perform each and every act and thing requisite or necessary to be done in and about the premises, to all intents and purposes and as fully as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ Stephen M. Brett Trustee of TCI Communications November 27, 1996 ______________________________________ Financing IV (STEPHEN M. BRETT) /s/ Bernard W. Schotters Trustee of TCI Communications November 27, 1996 ______________________________________ Financing IV (BERNARD W. SCHOTTERS)
II-11 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Lis Shelton and Pamela L. Coe, Esq. and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and re-substitution for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post- effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them full power and authority, to do and perform each and every act and thing requisite or necessary to be done in and about the premises, to all intents and purposes and as fully as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ Stephen M. Brett Trustee of TCI November 27, 1996 ______________________________________ Communications (STEPHEN M. BRETT) Financing V /s/ Bernard W. Schotters Trustee of TCI November 27, 1996 ______________________________________ Communications (BERNARD W. SCHOTTERS) Financing V
II-12 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Lis Shelton and Pamela L. Coe, Esq. and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and re-substitution for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post- effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents and each of them full power and authority, to do and perform each and every act and thing requisite or necessary to be done in and about the premises, to all intents and purposes and as fully as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes may lawfully do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE --------- ----- ---- /s/ Stephen M. Brett Trustee of TCI November 27, 1996 ______________________________________ Communications (STEPHEN M. BRETT) Financing VI /s/ Bernard W. Schotters Trustee of TCI November 27, 1996 ______________________________________ Communications (BERNARD W. SCHOTTERS) Financing VI
II-13 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- EXHIBITS TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- TCI COMMUNICATIONS, INC. DELAWARE 84-0588868 TCI COMMUNICATIONS FINANCING III DELAWARE 84-6289177 TCI COMMUNICATIONS FINANCING IV DELAWARE 84-6289178 TCI COMMUNICATIONS FINANCING V DELAWARE TO BE APPLIED FOR TCI COMMUNICATIONS FINANCING VI DELAWARE TO BE APPLIED FOR (EXACT NAME OF REGISTRANT (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EXHIBIT INDEX
EXHIBIT PAGE NUMBER DESCRIPTION NO. ------- ----------- ---- 1 Form of Purchase Agreement. 4.1 Certificate of Trust of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.3 to the Registration Statement on Form S-3, No. 33-64525, of TCI Communications, Inc., TCI Communications Financing I, TCI Communications Financing II, TCI Communications Financing III and TCI Communications Financing IV (collectively, the "Filers")). 4.2 Certificate of Trust of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.4 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.3 Certificate of Trust of TCI Communications Financing V. 4.4 Certificate of Trust of TCI Communications Financing VI. 4.5 Declaration of Trust of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.7 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.6 Declaration of Trust of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.8 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.7 Declaration of Trust of TCI Communications Financing V. 4.8 Declaration of Trust of TCI Communications Financing VI. 4.9 Form of Amended and Restated Declaration of Trust of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.11 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.10 Form of Amended and Restated Declaration of Trust of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.12 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.11 Form of Amended and Restated Declaration of Trust of TCI Communications Financing V. 4.12 Form of Amended and Restated Declaration of Trust of TCI Communications Financing VI. 4.13 Indenture between TCI Communications, Inc. and the Bank of New York, as Trustee III, dated as of January 29, 1996. 4.14 Form of Third 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 III (incorporated herein by reference to Exhibit 4.17 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.16 Form of Guarantee Agreement with respect to Preferred Securities of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.18 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.17 Form of Guarantee Agreement with respect to Preferred Securities of TCI Communications Financing V. 4.18 Form of Guarantee Agreement with respect to Preferred Securities of TCI Communications Financing VI. 4.19 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing III (incorporated herein by reference to Exhibit 4.21 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.20 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing IV (incorporated herein by reference to Exhibit 4.22 to the Registration Statement on Form S-3, No. 33-64525, of the Filers). 4.21 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing V. 4.22 Form of Guarantee Agreement with respect to Common Securities of TCI Communications Financing VI. *5.1 Opinion of Baker & Botts, L.L.P. regarding the legality of the securities being registered.
EXHIBIT PAGE NUMBER DESCRIPTION NO. ------- ----------- ---- *5.2 Opinion of Richards, Layton & Finger, P.A. 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 KPMG Finsterbusch Pickenhayn Sibille. 23.3 Consent of Price Waterhouse, LLP. *23.4 Consent of Baker & Botts, L.L.P. (included in Exhibit 5.1 and Exhibit 8). *23.5 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2) 24 Powers of Attorney (included on pages II-9 to II-13). 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 III, on Form T-1. 25.3 Statement of Eligibility of The Bank of New York, as Trustee for Preferred Securities of TCI Communications Financing IV, on Form T-1. 25.4 Statement of Eligibility of The Bank of New York, as Trustee for Preferred Securities of TCI Communications Financing V, on Form T-1. 25.5 Statement of Eligibility of The Bank of New York, as Trustee for Preferred Securities of TCI Communications Financing VI, 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 III, 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 IV, 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 V, 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 VI, on Form T-1.
- -------- * To be filed by amendment. EX-1 2 FORM OF PURCHASE AGREEMENT EXHIBIT 1 [Form of Underwriting Agreement] _____________ Preferred Securities TCI COMMUNICATIONS FINANCING __ (a Delaware Business Trust) ____% Trust Preferred Securities (Liquidation Amount $25 per Preferred Security) guaranteed to a limited extent by TCI Communications, Inc. PURCHASE AGREEMENT ------------------ ____________, 1996 [Underwriter] 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 ____________ 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 ____________, ____________ 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 Preferred Securities (liquidation amount $25 per preferred security) of the Trust (the "Preferred 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 January 29, 1996 (the "Base Indenture"), between the Company and The Bank of New York, as trustee (the "Debt Trustee"), and a supplement to the Base Indenture, to be dated as of the Closing Date (the "Supplemental Indenture," and together with the Base Indenture and any other amendments or supplements thereto, the "Indenture"), between the Company and the Debt Trustee. 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 2 Form S-3 (No. 333-________) and a related preliminary prospectus and 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 3 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. ------------------------------- (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., 599 Lexington Avenue, Suite 2900, New York, New York 10022, 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 4 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. ____________, 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 ____________ 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 5 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 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 6 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 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 7 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 8 contemplated by Section 4(e), (2) any filing fees incident to any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Offered Securities, (3) any fees charged by securities rating agencies for rating any of the Offered Securities, (4) all costs and expenses incurred in connection with the preparation, issuance and delivery of the Offered Securities (other than transfer taxes) and the execution and delivery of the Indenture, (5) all costs and expenses incurred in connection with furnishing such copies of the Registration Statement, the Prospectus and any preliminary prospectus, and all amendments and supplements thereto, as may be requested for use in connection with the offering and sale of Offered Securities by dealers to whom Offered Securities may be sold, (6) the fees and expenses incurred in connection with the registration of the Offered Securities under the 1934 Act and (7) the fees and expenses of the transfer agent for the Preferred Securities, if any. (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 9 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. 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 10 offering of the Offered Securities. The Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act, and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Trust or the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. At the respective times the Registration Statement and any post- effective amendments thereto became effective and at the Closing Date, the Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Neither the Prospectus nor any amendments or supplements thereto, at the time of filing thereof with the Commission, included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Trust or the 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 11 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. (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"). 12 (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. (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. 13 (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. 14 (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 15 or, in the case of the Company, any of its significant subsidiaries to be in substantial compliance with all existing statutes and regulations applicable to it or, in the case of the Company, such subsidiaries, which failure would materially and adversely affect the conduct of the business of the Trust or of the Company and its subsidiaries, considered as a whole. (19) The statements set forth in the Prospectus under the caption "Certain Federal Income Tax Consequences," insofar as they purport to describe the provisions of the law referred to therein, are accurate and complete in all material respects. (20) The Trust will be classified as a "grantor trust" for United States federal income tax purposes and is not and will not be classified as an association taxable as a partnership or a corporation for United States federal income tax purposes under federal income tax laws as currently in effect. (21) Neither the Trust nor the Company is an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and neither the Trust nor the Company is subject to regulation under such Act. (b) Any certificate signed by any Regular Trustee of the Trust or officer of the Company and delivered to the Representatives or to counsel for the Underwriters pursuant to the 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 16 necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any such untrue statement or omission or allegation thereof based upon information furnished in writing to the Trust or the Company by any Underwriter through the Representatives expressly for use therein; provided, however, that neither the Trust nor the Company shall indemnify any Underwriter or any person who controls any such Underwriter from any such losses, claims, damages or liabilities alleged by any person who purchased Offered Securities from such Underwriter if the untrue statement, omission or allegation thereof upon which such losses, claims, damages or liabilities are based was made in: (i) any preliminary prospectus, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person at or prior to the written confirmation of the sale of Offered Securities to such person, and if the Prospectus (as so amended or supplemented) corrected the untrue statement or omission giving rise to such loss, claim, damage or liability; (ii) any Prospectus used by such Underwriter or any person who controls such Underwriter, after such time as the Trust or the Company advised such Underwriter that the filing of a post-effective amendment or supplement thereto was required, except the Prospectus as so amended or supplemented; or (iii) any Prospectus used after such time as the obligation of the Trust and the Company to keep the same current and effective has 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 17 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 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 18 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 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 19 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. ------------------------------------------------ 20 The obligations of the several Underwriters hereunder are subject to the following conditions: (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, L.L.P. 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 21 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 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 22 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, P.A. 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 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 LLC 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; 23 (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 LLC, 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 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. 24 (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; (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 25 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 26 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 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 LLC and General Counsel of the Company) or New York (in the case of Baker & Botts, L.L.P.), on the opinions of local counsel retained by them or the 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, P.A. 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 27 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 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 28 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 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 LLP, counsel retained by the 29 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 LLP, 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, 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. 30 (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, P.A., 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, prospects or financial affairs of the Trust or of the Company and its subsidiaries, considered as a whole which, in the 31 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: 32 (a) if the principal amount of Defaulted Securities does not exceed 10% of the aggregate principal amount of Offered Securities, the non- defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the principal amount of Defaulted Securities exceeds 10% of the aggregate principal amount of Offered Securities, the Company shall be entitled for an additional 24-hour period to find one or more substitute underwriters satisfactory to the Representatives in their reasonable discretion to purchase such Defaulted Securities. In the event of any such default either the Representatives or the 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 telecommuni cation. Notices to the Representatives shall be directed to ____________, 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, 33 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 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. 34 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 __ 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: [UNDERWRITER] By: ___________________________________ Authorized Signatory for themselves and as Representatives of other underwriters named in Schedule A hereto. 35 EXHIBIT A _____________ Preferred Securities TCI COMMUNICATIONS FINANCING __ (a Delaware Business Trust) ____% Trust Preferred Securities (Liquidation Amount $25 per Preferred Security) guaranteed to a limited extent by TCI Communications, Inc. PRICING AGREEMENT ----------------- _______________, 1996 [UNDERWRITER] 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 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 the Offered Securities to be paid by the several Underwriters, determined as provided in said Section 2, shall be $25.00. A-1 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 ______ 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: [UNDERWRITER] By: ----------------------------- A-2 EX-4.3 3 CERTIFICATE OF TRUST - FINANCING V EXHIBIT 4.3 CERTIFICATE OF TRUST OF TCI COMMUNICATIONS FINANCING V This Certificate of Trust of TCI Communications Financing V (the "Trust") dated October 31, 1996, is being duly executed and filed by the undersigned, as trustees, to form a business trust pursuant to the Delaware Business Trust Act, 12 Del. C. (S) 3801, et seq. The undersigned, as trustees, do hereby certify as ------- ------- follows: 1. The name of the business trust being formed hereby is "TCI Communications Financing V". 2. The name and business address of the trustee of the Trust which has its principal place of business in the State of Delaware is as follows: The Bank of New York (Delaware) 400 White Clay Center, Route 273 Newark, Delaware 19711 3. This Certificate of Trust shall be effective as of the date of filing. IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust, have executed this Certificate of Trust in one or more counterparts as of the date first above written. /s/ Bernard W. Schotters ----------------------------------- Bernard W. Schotters, as Trustee /s/ Stephen M. Brett ----------------------------------- Stephen M. Brett, as Trustee THE BANK OF NEW YORK (DELAWARE), as Trustee By: /s/ Joseph G. Ernst -------------------------------- Name: Joseph G. Ernst Title: Assistant Vice President EX-4.4 4 CERTIFICATE OF TRUST - FINANCING VI EXHIBIT 4.4 CERTIFICATE OF TRUST OF TCI COMMUNICATIONS FINANCING VI This Certificate of Trust of TCI Communications Financing VI (the "Trust") dated October 31, 1996, is being duly executed and filed by the undersigned, as trustees, to form a business trust pursuant to the Delaware Business Trust Act, 12 Del. C. (S) 3801, et seq. The undersigned, as trustees, do hereby certify as ------- ------- follows: 1. The name of the business trust being formed hereby is "TCI Communications Financing VI". 2. The name and business address of the trustee of the Trust which has its principal place of business in the State of Delaware is as follows: The Bank of New York (Delaware) 400 White Clay Center, Route 273 Newark, Delaware 19711 3. This Certificate of Trust shall be effective as of the date of filing. IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust, have executed this Certificate of Trust in one or more counterparts as of the date first above written. /s/ Bernard W. Schotters -------------------------------------- Bernard W. Schotters, as Trustee /s/ Stephen M. Brett -------------------------------------- Stephen M. Brett, as Trustee THE BANK OF NEW YORK (DELAWARE), as Trustee By: /s/ Joseph G. Ernst ---------------------------------- Name: Joseph G. Ernst Title: Assistant Vice President EX-4.7 5 DECLARATION OF TRUST - FINANCING V EXHIBIT 4.7 DECLARATION OF TRUST OF TCI COMMUNICATIONS FINANCING V THIS DECLARATION OF TRUST (this "Declaration"), dated and effective as of October 31, 1996, by the undersigned trustees (together with all other Persons from time to time duly appointed and serving as trustees in accordance with the provisions of this Declaration, the "Trustees"), TCI Communications, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and by the holders, from time to time, of undivided beneficial interests in the Trust to be issued pursuant to this Declaration; W I T N E S S E T H: WHEREAS, the Trustees and the Sponsor desire to establish a trust (the "Trust") pursuant to the Delaware Business Trust Act 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 Debt Securities (as hereinafter defined) of the Debt Issuer (as hereinafter defined); NOW THEREFORE, it being the intention of the parties hereto that the Trust constitute a business trust under the Delaware Business Trust Act and that this Declaration constitute the governing instrument of such business trust, the Trustees declare that all assets contributed to the Trust will be held in trust for the benefit of the holders, from time to time, of undivided beneficial interests in the assets of the Trust, subject to the provisions of this Declaration. ARTICLE I. DEFINITIONS AND INTERPRETATION SECTION 1.1. Definitions. Capitalized terms used in this Declaration but not defined in the preamble above have the respective meanings assigned thereto in this Section 1.1. A term defined anywhere in this Declaration has the same meaning throughout. "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder. "Business Day" means any day other than a Saturday, Sunday or any 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. C. (S)3801, et seq, as it may be amended from time to time. ------- "Certificate" means a Common Security Certificate or a Preferred Security Certificate. "Common Security" means a security representing a common undivided beneficial interest in the assets of the Trust with such terms as may be set out in any amendment to this Declaration. "Common Security Certificate" means a definitive certificate in fully registered form representing a Common Security. "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. "Debt Issuer" means TCI Communications, Inc., a Delaware corporation, or any successor entity in a merger, consolidation or amalgamation, in its capacity as the issuer of the Debt Securities. "Debt Securities" means the subordinated deferrable interest notes to be issued by the Debt Issuer and purchased with the proceeds of the Securities. "Delaware Trustee" has the meaning set forth in Section 3.1 "Exchange Act" means the Securities and Exchange Act of 1934, as amended from time to time, and any successor legislation. "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. "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. -2- "Preferred Security" means a security representing a preferred undivided beneficial interest in the assets of the Trust with such terms as may be set out in any amendment to this Declaration. "Preferred Security Certificate" means a certificate representing a Preferred Security. "Regular Trustee" means any Trustee other than the Delaware Trustee. "Securities" mean the Common Securities and the Preferred Securities. "Securities Act" means the Securities Act of 1933, as amended from time to time, and any successor legislation. "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. "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. SECTION 1.2. Interpretation. Each definition in this Declaration 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 that time and include any successor legislation. The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder" refer to this Declaration as a whole. The headings to the Articles and Sections are for convenience of reference and shall not affect the meaning or interpretation of this Declaration. Reference to Articles, Sections and Exhibits means the Articles, Sections and Exhibits of this Declaration. The Exhibits are hereby incorporated by reference into, and shall be deemed a part of, this Declaration. ARTICLE II. ORGANIZATION SECTION 2.1. Name. The Trust created by this Declaration is named "TCI Communications Financing V". The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees. -3- SECTION 2.2. Office. The address of the principal office of the Trust is c/o TCI Communications, Inc., 5619 DTC Parkway, Englewood, Colorado 80111. At any time, the Regular Trustees may designate another principal office. SECTION 2.3. Purpose. The exclusive purposes and functions of the Trust are (a) to issue and sell Securities and use the proceeds from such sale to acquire the Debt Securities and (b) except as otherwise limited herein, to engage in only those other activities necessary or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments or pledge any of its assets. SECTION 2.4. Authority. Subject to the limitations provided in this Declaration, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their powers shall constitute the act of, and serve to bind, the Trust. In dealing with the Regular Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Regular Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Regular Trustees as set forth in this Declaration. SECTION 2.5. Title to Property of the Trust. Legal title to all assets of the Trust shall be vested in the Trust. SECTION 2.6. Powers of the Regular Trustees. The Regular Trustees shall have the exclusive power and authority to cause the Trust to engage in the following activities: (a) to issue and sell the Preferred Securities and the Common Securities in accordance with this Declaration; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities, and, provided further, there shall be no interests in the Trust other than the Securities and the issuance of the Securities shall be limited to a one-time, simultaneous issuance of both Preferred Securities and Common Securities; (b) in connection with the issue and sale of the Preferred Securities, under the direction of the Sponsor, to: (i) execute and file with the Securities and Exchange Commission a registration statement on Form S-3 prepared by the Sponsor in relation to the Preferred Securities, including any amendments thereto to be prepared by the Sponsor; (ii) determine the states in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to take any and all such acts as they deem necessary or advisable to comply with the applicable laws of any of those states; -4- (iii) execute and file an application prepared by the Sponsor to the New York Stock Exchange, Inc. or any other national stock exchange and/or the Nasdaq National Market for listing upon notice of issuance of any Preferred Securities; and (iv) execute and file with the Securities and Exchange Commission a registration statement on Form 8-A prepared by the Sponsor relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto; (c) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and provide for reasonable compensation for such services; (d) to incur expenses which are necessary or incidental to carry out any of the purposes of this Declaration; and (e) 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. SECTION 2.7. Filing of Certificate of Trust. On or after the effective date of this Declaration, the Trustees shall cause the Certificate of Trust for the Trust in the form attached hereto as Exhibit A to be filed with the Secretary of State of the State of Delaware. SECTION 2.8. Duration of Trust. The Trust, absent termination pursuant to the provisions of Section 5.2, shall have existence for fifty-five years from the date hereof. ARTICLE III. TRUSTEES SECTION 3.1. Trustees. The number of Trustees shall initially be three, and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Sponsor. The Sponsor is entitled to appoint or remove without cause any Trustee at any time; provided, that the number of Trustees shall in no event be less than three; and provided further that one Trustee, in the case of a natural person, shall be a person who is a resident of the State of Delaware or which, if not a natural person, has its principal place of business in the State of Delaware and meets the requirements of applicable Delaware law (the "Delaware Trustee"). Except as expressly set forth in this Declaration, any power of the Regular Trustees may be exercised by, or with the consent of, a majority of the Regular Trustees; provided that if there are two or fewer Regular Trustees, all powers of the Regular Trustees shall be exercised by, or with the consent of, all of the Regular Trustees. -5- The initial Regular Trustees shall be: Bernard W. Schotters Stephen M. Brett The initial Delaware Trustee shall be: The Bank of New York (Delaware) SECTION 3.2. Delaware Trustee. Notwithstanding any other provisions of this Declaration, the Delaware Trustee, in its capacity as Delaware Trustee, shall not be entitled to exercise any of the powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Regular Trustees described in this Declaration. The Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Business Trust Act. SECTION 3.3. Execution of Documents. (a) The Regular Trustees are authorized to execute on behalf of the Trust any documents that the Regular Trustees have the power and authority to cause the Trust to execute pursuant to Section 2.6. (b) The Regular Trustees may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 their power for the purposes of signing any documents which the Regular Trustees have power and authority to cause the Trust to execute pursuant to Section 2.6. ARTICLE IV. LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION 4.1. Exculpation. (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence or willful misconduct with respect to such acts or omissions. (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 -6- amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which distributions to Holders might properly be paid. SECTION 4.2. 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, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person. (b) Unless otherwise expressly provide herein: (i) whenever a conflict of interest exists or arises between an Indemnified Person and Covered Persons, or (ii) whenever this Declaration or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder, the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. (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 interest 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. -7- SECTION 4.3. Indemnification. (a) To the fullest extent permitted by applicable law, the Sponsor shall indemnify and hold harmless each Indemnified Person from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Declaration, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of gross negligence or willful misconduct with respect to such acts or omissions. (b) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Sponsor prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in Section 4.3(a). SECTION 4.4. Other Businesses. Any Covered Person, the Sponsor and the Delaware Trustee may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders 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 or the Delaware Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the Delaware Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person and the Delaware Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act on any committee or body of holders of securities or other obligations of the Sponsor or its Affiliates. ARTICLE V. AMENDMENTS, TERMINATION, MISCELLANEOUS SECTION 5.1. Amendments. At any time before the issue of any Securities, this Declaration may be amended by, and only by, a written instrument executed by a majority of the Regular Trustees and the Sponsor. SECTION 5.2. Termination of Trust. (a) The Trust shall terminate and be of no further force or effect: (i) upon the bankruptcy of the Sponsor; -8- (ii) upon the filing of a certificate of dissolution or its equivalent with respect to the Sponsor or the revocation of the Sponsor's Certificate of Incorporation; (iii) upon the entry of a decree of judicial dissolution of the Sponsor or the Trust; or (iv) before the issue of any Securities, with the consent of at least a majority of the Regular Trustees and the Sponsor. (b) As soon as is practicable after the occurrence of an event referred to in Section 5.2(a), the Trustees shall file a Certificate of Cancellation for the Trust with the Secretary of State of the State of Delaware. SECTION 5.3. Governing Law. This Declaration and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws. SECTION 5.4. 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 or not so expressed. SECTION 5.5. Partial Enforceability. If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to any Person or circumstances other than those to which it is held invalid, shall not be affected thereby. SECTION 5.6. Counterparts. This Declaration may contain more than one counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. -9- IN WITNESS WHEREOF, the undersigned have caused this Declaration of Trust of TCI Communications Financing V to be executed as of the day and year first above written. TRUSTEES: /s/ Bernard W. Schotters ---------------------------------------- Bernard W. Schotters, as Trustee /s/ Stephen M.Brett ---------------------------------------- Stephen M. Brett, as Trustee THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee By: /s/ Joseph G. Ernst ------------------------------------- Name: Joseph G. Ernst Title: Assistant Vice President SPONSOR: TCI COMMUNICATIONS, INC. By: /s/ Stephen M. Brett ------------------------------------- Name: Stephen M. Brett Title: Senior Vice President -10- EXHIBIT A CERTIFICATE OF TRUST OF TCI COMMUNICATIONS FINANCING V This Certificate of Trust of TCI Communications Financing V (the "Trust") dated October 31, 1996, is being duly executed and filed by the undersigned, as trustees, to form a business trust pursuant to the Delaware Business Trust Act, 12 Del. C. (S) 3801, et seq.. The undersigned, as trustees, do hereby certify as ------- ------- follows: 1.The name of the business trust being formed hereby is "TCI Communications Financing V". 2.The name and business address of the trustee of the Trust which has its principal place of business in the State of Delaware is as follows: The Bank of New York (Delaware) 400 White Clay Center, Route 273 Newark, Delaware 19711 3.This Certificate of Trust shall be effective as of the date of filing. -11- IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust, have executed this Certificate of Trust in one or more counterparts as of the date first above written. ______________________________________ Bernard W. Schotters, as Trustee ______________________________________ Stephen M. Brett, as Trustee THE BANK OF NEW YORK (DELAWARE), as Trustee By:__________________________________ Name: Title: -12- EX-4.8 6 DECLARATION OF TRUST - FINANCING VI EXHIBIT 4.8 DECLARATION OF TRUST OF TCI COMMUNICATIONS FINANCING VI THIS DECLARATION OF TRUST (this "Declaration"), dated and effective as of October 31, 1996, by the undersigned trustees (together with all other Persons from time to time duly appointed and serving as trustees in accordance with the provisions of this Declaration, the "Trustees"), TCI Communications, Inc., a Delaware corporation, as trust sponsor (the "Sponsor"), and by the holders, from time to time, of undivided beneficial interests in the Trust to be issued pursuant to this Declaration; W I T N E S S E T H: WHEREAS, the Trustees and the Sponsor desire to establish a trust (the "Trust") pursuant to the Delaware Business Trust Act 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 Debt Securities (as hereinafter defined) of the Debt Issuer (as hereinafter defined); NOW THEREFORE, it being the intention of the parties hereto that the Trust constitute a business trust under the Delaware Business Trust Act and that this Declaration constitute the governing instrument of such business trust, the Trustees declare that all assets contributed to the Trust will be held in trust for the benefit of the holders, from time to time, of undivided beneficial interests in the assets of the Trust, subject to the provisions of this Declaration. ARTICLE I. DEFINITIONS AND INTERPRETATION SECTION 1.1. Definitions. Capitalized terms used in this Declaration but not defined in the preamble above have the respective meanings assigned thereto in this Section 1.1. A term defined anywhere in this Declaration has the same meaning throughout. "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder. "Business Day" means any day other than a Saturday, Sunday or any 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. C. (S)3801, et seq, as it may be amended from time to time. ------- "Certificate" means a Common Security Certificate or a Preferred Security Certificate. "Common Security" means a security representing a common undivided beneficial interest in the assets of the Trust with such terms as may be set out in any amendment to this Declaration. "Common Security Certificate" means a definitive certificate in fully registered form representing a Common Security. "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. "Debt Issuer" means TCI Communications, Inc., a Delaware corporation, or any successor entity in a merger, consolidation or amalgamation, in its capacity as the issuer of the Debt Securities. "Debt Securities" means the subordinated deferrable interest notes to be issued by the Debt Issuer and purchased with the proceeds of the Securities. "Delaware Trustee" has the meaning set forth in Section 3.1 "Exchange Act" means the Securities and Exchange Act of 1934, as amended from time to time, and any successor legislation. "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. "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. -2- "Preferred Security" means a security representing a preferred undivided beneficial interest in the assets of the Trust with such terms as may be set out in any amendment to this Declaration. "Preferred Security Certificate" means a certificate representing a Preferred Security. "Regular Trustee" means any Trustee other than the Delaware Trustee. "Securities" mean the Common Securities and the Preferred Securities. "Securities Act" means the Securities Act of 1933, as amended from time to time, and any successor legislation. "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. "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. SECTION 1.2. Interpretation. Each definition in this Declaration 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 that time and include any successor legislation. The word "or" is not exclusive, and the words "herein," "hereof" and "hereunder" refer to this Declaration as a whole. The headings to the Articles and Sections are for convenience of reference and shall not affect the meaning or interpretation of this Declaration. Reference to Articles, Sections and Exhibits means the Articles, Sections and Exhibits of this Declaration. The Exhibits are hereby incorporated by reference into, and shall be deemed a part of, this Declaration. ARTICLE II. ORGANIZATION SECTION 2.1. Name. The Trust created by this Declaration is named "TCI Communications Financing VI". The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees. -3- SECTION 2.2. Office. The address of the principal office of the Trust is c/o TCI Communications, Inc., 5619 DTC Parkway, Englewood, Colorado 80111. At any time, the Regular Trustees may designate another principal office. SECTION 2.3. Purpose. The exclusive purposes and functions of the Trust are (a) to issue and sell Securities and use the proceeds from such sale to acquire the Debt Securities and (b) except as otherwise limited herein, to engage in only those other activities necessary or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments or pledge any of its assets. SECTION 2.4. Authority. Subject to the limitations provided in this Declaration, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their powers shall constitute the act of, and serve to bind, the Trust. In dealing with the Regular Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Regular Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Regular Trustees as set forth in this Declaration. SECTION 2.5. Title to Property of the Trust. Legal title to all assets of the Trust shall be vested in the Trust. SECTION 2.6. Powers of the Regular Trustees. The Regular Trustees shall have the exclusive power and authority to cause the Trust to engage in the following activities: (a) to issue and sell the Preferred Securities and the Common Securities in accordance with this Declaration; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities, and, provided further, there shall be no interests in the Trust other than the Securities and the issuance of the Securities shall be limited to a one-time, simultaneous issuance of both Preferred Securities and Common Securities; (b) in connection with the issue and sale of the Preferred Securities, under the direction of the Sponsor, to: (i) execute and file with the Securities and Exchange Commission a registration statement on Form S-3 prepared by the Sponsor in relation to the Preferred Securities, including any amendments thereto to be prepared by the Sponsor; (ii) determine the states in which to take appropriate action to qualify or register for sale all or part of the Preferred Securities and to take any and all such acts as they deem necessary or advisable to comply with the applicable laws of any of those states; -4- (iii) execute and file an application prepared by the Sponsor to the New York Stock Exchange, Inc. or any other national stock exchange and/or the Nasdaq National Market for listing upon notice of issuance of any Preferred Securities; and (iv) execute and file with the Securities and Exchange Commission a registration statement on Form 8-A prepared by the Sponsor relating to the registration of the Preferred Securities under Section 12(b) or 12(g) of the Exchange Act, including any amendments thereto; (c) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and provide for reasonable compensation for such services; (d) to incur expenses which are necessary or incidental to carry out any of the purposes of this Declaration; and (e) 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. SECTION 2.7. Filing of Certificate of Trust. On or after the effective date of this Declaration, the Trustees shall cause the Certificate of Trust for the Trust in the form attached hereto as Exhibit A to be filed with the Secretary of State of the State of Delaware. SECTION 2.8. Duration of Trust. The Trust, absent termination pursuant to the provisions of Section 5.2, shall have existence for fifty-five years from the date hereof. ARTICLE III. TRUSTEES SECTION 3.1. Trustees. The number of Trustees shall initially be three, and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Sponsor. The Sponsor is entitled to appoint or remove without cause any Trustee at any time; provided, that the number of Trustees shall in no event be less than three; and provided further that one Trustee, in the case of a natural person, shall be a person who is a resident of the State of Delaware or which, if not a natural person, has its principal place of business in the State of Delaware and meets the requirements of applicable Delaware law (the "Delaware Trustee"). Except as expressly set forth in this Declaration, any power of the Regular Trustees may be exercised by, or with the consent of, a majority of the Regular Trustees; provided that if there are two or fewer Regular Trustees, all powers of the Regular Trustees shall be exercised by, or with the consent of, all of the Regular Trustees. -5- The initial Regular Trustees shall be: Bernard W. Schotters Stephen M. Brett The initial Delaware Trustee shall be: The Bank of New York (Delaware) SECTION 3.2. Delaware Trustee. Notwithstanding any other provisions of this Declaration, the Delaware Trustee, in its capacity as Delaware Trustee, shall not be entitled to exercise any of the powers, nor shall the Delaware Trustee have any of the duties and responsibilities, of the Regular Trustees described in this Declaration. The Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Business Trust Act. SECTION 3.3. Execution of Documents. (a) The Regular Trustees are authorized to execute on behalf of the Trust any documents that the Regular Trustees have the power and authority to cause the Trust to execute pursuant to Section 2.6. (b) The Regular Trustees may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 their power for the purposes of signing any documents which the Regular Trustees have power and authority to cause the Trust to execute pursuant to Section 2.6. ARTICLE IV. LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION 4.1. Exculpation. (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence or willful misconduct with respect to such acts or omissions. (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 -6- amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which distributions to Holders might properly be paid. SECTION 4.2. 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, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person. (b) Unless otherwise expressly provide herein: (i) whenever a conflict of interest exists or arises between an Indemnified Person and Covered Persons, or (ii) whenever this Declaration or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder, the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. (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 interest 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. -7- SECTION 4.3. Indemnification. (a) To the fullest extent permitted by applicable law, the Sponsor shall indemnify and hold harmless each Indemnified Person from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Declaration, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of gross negligence or willful misconduct with respect to such acts or omissions. (b) To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by an Indemnified Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Sponsor prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the Indemnified Person to repay such amount if it shall be determined that the Indemnified Person is not entitled to be indemnified as authorized in Section 4.3(a). SECTION 4.4. Other Businesses. Any Covered Person, the Sponsor and the Delaware Trustee may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders 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 or the Delaware Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and any Covered Person, the Sponsor and the Delaware Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Covered Person and the Delaware Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor, or may act on any committee or body of holders of securities or other obligations of the Sponsor or its Affiliates. ARTICLE V. AMENDMENTS, TERMINATION, MISCELLANEOUS SECTION 5.1. Amendments. At any time before the issue of any Securities, this Declaration may be amended by, and only by, a written instrument executed by a majority of the Regular Trustees and the Sponsor. SECTION 5.2. Termination of Trust. (a) The Trust shall terminate and be of no further force or effect: (i) upon the bankruptcy of the Sponsor; -8- (ii) upon the filing of a certificate of dissolution or its equivalent with respect to the Sponsor or the revocation of the Sponsor's Certificate of Incorporation; (iii) upon the entry of a decree of judicial dissolution of the Sponsor or the Trust; or (iv) before the issue of any Securities, with the consent of at least a majority of the Regular Trustees and the Sponsor. (b) As soon as is practicable after the occurrence of an event referred to in Section 5.2(a), the Trustees shall file a Certificate of Cancellation for the Trust with the Secretary of State of the State of Delaware. SECTION 5.3. Governing Law. This Declaration and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws. SECTION 5.4. 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 or not so expressed. SECTION 5.5. Partial Enforceability. If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to any Person or circumstances other than those to which it is held invalid, shall not be affected thereby. SECTION 5.6. Counterparts. This Declaration may contain more than one counterpart of the signature page and this Declaration may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. -9- IN WITNESS WHEREOF, the undersigned have caused this Declaration of Trust of TCI Communications Financing VI to be executed as of the day and year first above written. TRUSTEES: /s/ Bernard W. Schotters ----------------------------------------- Bernard W. Schotters, as Trustee /s/ Stephen M. Brett ----------------------------------------- Stephen M. Brett, as Trustee THE BANK OF NEW YORK (DELAWARE), as Delaware Trustee By: /s/ Joseph G. Ernst ------------------------------------------ Name: Joseph G. Ernst Title: Assistant Vice President SPONSOR: TCI COMMUNICATIONS, INC. By: /s/ Stephen M. Brett ------------------------------------------ Name: Stephen M. Brett Title: Senior Vice President -10- EXHIBIT A CERTIFICATE OF TRUST OF TCI COMMUNICATIONS FINANCING VI This Certificate of Trust of TCI Communications Financing VI (the "Trust") dated October 31, 1996, is being duly executed and filed by the undersigned, as trustees, to form a business trust pursuant to the Delaware Business Trust Act, 12 Del. C. (S) 3801, et seq.. The undersigned, as trustees, do hereby certify as ------- ------- follows: 1.The name of the business trust being formed hereby is "TCI Communications Financing VI". 2.The name and business address of the trustee of the Trust which has its principal place of business in the State of Delaware is as follows: The Bank of New York (Delaware) 400 White Clay Center, Route 273 Newark, Delaware 19711 3.This Certificate of Trust shall be effective as of the date of filing. IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust, have executed this Certificate of Trust in one or more counterparts as of the date first above written. ________________________________________ Bernard W. Schotters, as Trustee ________________________________________ Stephen M. Brett, as Trustee THE BANK OF NEW YORK (DELAWARE), as Trustee By:_____________________________________ Name: Title: -12- EX-4.11 7 FORM OF AMENDED DECLARATION - FINANCING V EXHIBIT 4.11 ==================================== AMENDED AND RESTATED DECLARATION OF TRUST TCI COMMUNICATIONS FINANCING V Dated as of _______ __, 199_ ==================================== TABLE OF CONTENTS -----------------
Page ---- ARTICLE I INTERPRETATION AND DEFINITIONS SECTION 1.1 Definitions.................................... 3 ----------- ARTICLE II TRUST INDENTURE ACT SECTION 2.1 Trust Indenture Act; Application......................... 10 -------------------------------- SECTION 2.2 Lists of Holders of Securities........................... 11 ------------------------------ SECTION 2.3 Reports by the Property Trustee.......................... 12 ------------------------------- SECTION 2.4 Periodic Reports to Property Trustee..................... 12 ------------------------------------ SECTION 2.5 Evidence of Compliance with Conditions Prece- --------------------------------------------- dent..................................................... 12 ---- SECTION 2.6 Events of Default; Waiver................................ 12 ------------------------- SECTION 2.7 Event of Default; Notice................................. 15 ------------------------ ARTICLE III ORGANIZATION SECTION 3.1 Name..................................................... 15 ---- SECTION 3.2 Office................................................... 16 ------ SECTION 3.3 Purpose.................................................. 16 ------- SECTION 3.4 Authority................................................ 16 --------- SECTION 3.5 Title to Property of the Trust........................... 17 ------------------------------ SECTION 3.6 Powers and Duties of the Regular Trustees................ 17 ----------------------------------------- SECTION 3.7 Prohibition of Actions by the Trust and the ------------------------------------------- Trustees................................................. 20 -------- SECTION 3.8 Powers and Duties of the Property Trustee................ 22 ----------------------------------------- SECTION 3.9 Certain Duties and Responsibilities of the ------------------------------------------ Property Trustee......................................... 24 ---------------- SECTION 3.10 Certain Rights of the Property Trustee................... 27 -------------------------------------- SECTION 3.11 Delaware Trustee......................................... 29 ---------------- SECTION 3.12 Execution of Documents................................... 30 ---------------------- SECTION 3.13 Not Responsible for Recitals or Issuance of ------------------------------------------- Securities............................................... 30 ---------- SECTION 3.14 Duration of Trust........................................ 30 ----------------- SECTION 3.15 Mergers.................................................. 30 -------
i
Page ---- ARTICLE IV SPONSOR SECTION 4.1 Sponsor's Purchase of Common Securities.................. 33 --------------------------------------- SECTION 4.2 Responsibilities of the Sponsor.......................... 33 ------------------------------- SECTION 4.3 Expenses................................................. 34 -------- ARTICLE VTRUSTEES SECTION 5.1 Number of Trustees....................................... 35 ------------------ SECTION 5.2 Delaware Trustee......................................... 35 ---------------- SECTION 5.3 Property Trustee; Eligibility............................ 36 ----------------------------- SECTION 5.4 Qualifications of Regular Trustees and Dela- -------------------------------------------- ware Trustee Generally................................... 37 ---------------------- SECTION 5.5 Initial Trustees......................................... 37 ---------------- SECTION 5.6 Appointment, Removal and Resignation ofTrustees.......... 37 ----------------------------------------------- SECTION 5.7 Vacancies among Trustees................................. 39 ------------------------ SECTION 5.8 Effect of Vacancies...................................... 39 ------------------- SECTION 5.9 Meetings................................................. 40 -------- SECTION 5.10 Delegation of Power...................................... 41 ------------------- ARTICLE VI DISTRIBUTIONS SECTION 6.1 Distributions............................................ 41 ------------- ARTICLE VII ISSUANCE OF SECURITIES SECTION 7.1 General Provisions Regarding Securities.................. 42 --------------------------------------- ARTICLE VIII TERMINATION OF TRUST SECTION 8.1 Termination of Trust..................................... 43 --------------------
ii
Page ---- ARTICLE IX TRANSFER OF INTERESTS SECTION 9.1 Transfer of Securities................................... 44 ---------------------- SECTION 9.2 Transfer of Certificates................................. 45 ------------------------ SECTION 9.3 Deemed Security Holders.................................. 45 ----------------------- SECTION 9.4 Book Entry Interests..................................... 46 -------------------- SECTION 9.5 Notices to Clearing Agency............................... 47 -------------------------- SECTION 9.6 Appointment of Successor Clearing Agency................. 47 ---------------------------------------- SECTION 9.7 Definitive Preferred Security Certificates............... 47 ------------------------------------------ SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certifi- -------------------------------------------- cates.................................................... 48 ----- ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION 10.1 Liability................................................ 49 --------- SECTION 10.2 Exculpation.............................................. 49 ----------- SECTION 10.3 Fiduciary Duty........................................... 50 -------------- SECTION 10.4 Indemnification.......................................... 51 --------------- SECTION 10.5 Outside Businesses....................................... 52 ------------------ ARTICLE XI ACCOUNTING SECTION 11.1 Fiscal Year.............................................. 53 ----------- SECTION 11.2 Certain Accounting Matters............................... 53 -------------------------- SECTION 11.3 Banking.................................................. 54 ------- SECTION 11.4 Withholding.............................................. 54 ----------- ARTICLE XII AMENDMENTS AND MEETINGS SECTION 12.1 Amendments............................................... 55 ---------- SECTION 12.2 Meetings of the Holders; Action by Written ------------------------------------------ Consent................................................... 57 -------
iii
Page ---- ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE SECTION 13.1 Representations and Warranties of Property ------------------------------------------ Trustee.................................... 59 ------- SECTION 13.2 Representations and Warranties of Delaware ------------------------------------------ Trustee.................................... 60 ------- ARTICLE XIV MISCELLANEOUS SECTION 14.1 Notices.................................... 61 ------- SECTION 14.2 Governing Law.............................. 63 ------------- SECTION 14.3 Intention of the Parties................... 63 ------------------------ SECTION 14.4 Headings................................... 63 -------- SECTION 14.5 Successors and Assigns..................... 63 ---------------------- SECTION 14.6 Partial Enforceability..................... 63 ---------------------- SECTION 14.7 Counterparts............................... 64 ------------ 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
iv 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(b) 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. v AMENDED AND RESTATED DECLARATION OF TRUST OF TCI COMMUNICATIONS FINANCING V _________ __, 199_ AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated and effective as of _________ __, 199_, 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 V (the "Trust"), as a business trust under the Delaware Business Trust Act pursuant to a Declaration of Trust dated as of October __, 1996 (the "Original Declaration") and a Certificate of Trust filed with the Secretary of State of the State of Delaware on October __, 1996, 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 securi- ties representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration. 2 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 as signed 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 Sec tions 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. 3 "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. ------------ -- --- "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 Securi ties. "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 ______________, 199_. ------------ "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. 4 "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 (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. 5 "Indemnified Person" means (a) any Trustee; (b) any Affiliate of any ------------------ Trustee; (c) any officers, directors, sharehold ers, 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 January 29, 1996, 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 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 aggre gate 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 percentag es 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. 6 "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 Certifi cate 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 individu al, 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 ______, 199_, of the Sponsor in respect of the Preferred Securities. "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 7 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 8 officer's knowledge of and familiarity with the particular subject. "Rule 3a-7" means Rule 3a-7 under the Investment Company Act. --------- "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. --------- 9 "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 regula tions, including -------------------- temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "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 Agree ment 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 10 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 Securi- ties ("List of Holders") as of such record date, provided that 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 obli gations under (S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act. 11 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 Pre ferred 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 docu ments, reports and information as required by (S) 314 (if any) and the compliance certificate required by (S) 314 of the Trust Inden ture 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. 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: 12 (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 Subor dinated 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 13 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 pro visions 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 14 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 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 V," as such name may be modified from time to time by the Regular 15 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 necessary, or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets, or otherwise undertake (or permit to be undertaken) any activity that would 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. 16 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 other wise 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 issu ance 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: (i) execute and file with the Commission the regis tration statement on Form S-3 prepared by the Sponsor, including any amendments thereto, pertaining to the Pre ferred 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; 17 (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 registra tion statement on Form 8-A, including any amendments there to, 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; (f) to take all actions and perform such duties as may be required of the Regular Trustees pursuant to the terms of the Securities; 18 (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 certif icate 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; 19 (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 asset out in this Section 3.6, including, but not limited to: (i) causing the Trust not to be deemed to be an Investment Company required to be registered under the Investment Company Act; (ii) causing the Trust to be classified for United States federal income tax purposes as a grantor trust; and (iii) cooperating with the Subordinated Note Issuer to ensure that the Subordinated Notes will be treated as in debtedness 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 20 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; (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 bene ficial 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, modifica tion 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. 21 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 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 22 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 Regu lar 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 pursu ant 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 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. 23 (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 Trust ee 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: 24 (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 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 con clusively 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 con ducting any proceeding for any remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Declaration; 25 (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; (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. 26 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 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 here under 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 27 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 obliga tion 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, re port, notice, request, direction, consent, order, bond, de benture, 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 shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the 28 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 enti tled 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 29 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 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). 30 (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, amalgam ate, 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 secu rities having substantially the same terms as the Pre ferred Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Pre ferred Securities rank with respect to Distributions and payments upon liquidation, redemption and other wise; (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, prefer ences 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' 31 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. (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. 32 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 (e) to negotiate the terms of the Underwriting Agreement and Pricing Agreement providing for the sale of the Preferred Securities. 33 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. 34 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 Securi ties, 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. 35 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; (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 pub lishes 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 qualifica- tions. (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) 36 310(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. ---------------- 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 37 (ii) after the issuance of any Securities, by vote of the Holders of a Majority in liquidation amount of the Com mon 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 suc cessor 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 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 38 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 evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 5.6. SECTION 5.8 Effect of Vacancies. ------------------- 39 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. 40 SECTION 5.10 Delegation of Power. ------------------- (a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) the Regular Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. 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. 41 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 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 42 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; (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; 43 (v) upon the occurrence and continuation of a Special Event pursuant to which the Trust shall have been dis solved 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: 44 (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. 45 SECTION 9.4 Book Entry Interests. -------------------- Unless otherwise specified in the terms of the Preferred Securities, the Preferred Securities Certificates, on original issuance, will be issued in the form of one or more, fully registered, global Preferred Security Certificates (each a "Global Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially be registered on the books and records of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Certificates, except as provided in Section 9.7. Unless and until definitive, fully registered Preferred Security Certificates (the "Definitive Preferred Security Certificates") have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7: (a) the provisions of this Section 9.4 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Declaration (including the payment of Distributions on the Global Certificates and receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the sole holder of the Global Certificates and shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions of this Declaration, the provisions of this Section 9.4 shall control; and (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established 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. 46 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. 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 47 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, 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 48 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 Declara tion, 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 the authority conferred on such Indemnified Person by this 49 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, 50 the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. (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 51 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. 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 52 body of holders of, securities or other obligations of the Spon sor 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 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 53 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, howev er, 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 amount of the withholding to such Holder. In the event of any claimed over-withholding, Holders shall be limited to an action 54 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: 55 (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 (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 56 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, 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 57 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 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 58 valid after the expiration of 11 months from the date there of 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 Del aware 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 of the successor Property Trustee's acceptance of its appointment as Property Trustee, that: 59 (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 60 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 per form its obligations under the Certificate of Trust and the 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): 61 TCI Communications Financing V 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: (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 62 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. 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 applica- 63 tion 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. 64 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: 65 Title: THE BANK OF NEW YORK, as Property Trustee By: _______________________ Name: Title: TCI COMMUNICATIONS, INC., as Sponsor By: _______________________ Name: Title: 66 ANNEX I TERMS OF ___% TRUST ORIGINATED PREFERRED SECURITIES ___% TRUST ORIGINATED COMMON SECURITIES Further to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of _________ __, 199_ (as amended from time to time, the "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities and the Common Securities are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the Prospectus referred to below): 1. Designation and Number. ---------------------- (a) Preferred Securities. [ ] Preferred Securities of the -------------------- Trust with an aggregate liquidation amount with respect to the assets of the Trust of [ ] dollars ($[ ]) and a liquidation amount with respect to the assets of the Trust of $25 per preferred security, are hereby designated for the purposes of identification only as "_____% Trust Originated Preferred Securities/SM/ ('TOPrS'/SM/)" (the "Preferred Securities"). The Preferred Security Certificates evidencing the Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Preferred Securities are listed. (b) Common Securities. [ ] Common Securities of the Trust ----------------- with an aggregate liquidation amount with respect to the assets of the Trust of [ ] dollars ($[ ]) 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 "______% I-1 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. 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 ________,199_, 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 quar- I-2 terly 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 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 _________ __, 199-, (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. 333-___). 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, I-3 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 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 insuffi- I-4 cient 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 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 I-5 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. I-6 "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 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 out- I-7 standing 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. (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 I-8 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 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 I-9 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. (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 I-10 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 I-11 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 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 aggregate 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 I-12 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. (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 I-13 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 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. I-14 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 I-15 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 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. ------- I-16 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. 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-17 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 V A1-1 ____% Trust Originated Preferred Securities (liquidation amount $25 per Preferred Security) TCI Communications Financing V, 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 (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 _______, 199_, 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 ___________, 199_ (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 his 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 A1-2 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 or preference 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: COUNTERSIGNED AND REGISTERED: THE BANK OF NEW YORK (New York, New York) Transfer Agent and Registrar By:________________________________ Authorized Signature TCI COMMUNICATIONS FINANCING V By: _______________________________ Regular Trustee By: _______________________________ Regular Trustee A1-3 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. A1-4 _____________________ ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this to: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFICATION NUMBER ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Please print or typewrite name(s) and address(es) including postal zip code(s), of assignee(s) and irrevocably appoints of the Preferred Securities represented by this Certificate ________________________________________________________________________________ ________________________________________________________________________________ _______________________________________________________ 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 A1-5 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. A1-6 EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE Certificate Number Number of Common Securities Certificate Evidencing Common Securities of TCI Communications Financing V ______% Trust Originated Common Securities (liquidation amount $25 per Common Security) TCI Communications Financing V, 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 _______, 199_, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Common Securities as set forth in 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. A2-1 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. IN WITNESS WHEREOF, the Trust has executed this certificate this __ day of ____________, 199__. TCI COMMUNICATIONS FINANCING V By: _________________________ Name: Title: A2-2 _____________________ 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 EXHIBIT B SPECIMEN OF SUBORDINATED NOTE B-1 EXHIBIT C UNDERWRITING AGREEMENT C-1 EX-4.12 8 FORM OF AMENDED DECLARATION - FINANCING VI EXHIBIT 4.12 ==================================== AMENDED AND RESTATED DECLARATION OF TRUST TCI COMMUNICATIONS FINANCING VI Dated as of _______ __, 199_ ==================================== TABLE OF CONTENTS -----------------
Page ---- ARTICLE I INTERPRETATION AND DEFINITIONS SECTION 1.1 Definitions................................................ 3 ----------- ARTICLE II TRUST INDENTURE ACT SECTION 2.1 Trust Indenture Act; Application........................... 10 -------------------------------- SECTION 2.2 Lists of Holders of Securities............................. 11 ------------------------------ SECTION 2.3 Reports by the Property Trustee............................ 12 ------------------------------- SECTION 2.4 Periodic Reports to Property Trustee....................... 12 ------------------------------------ SECTION 2.5 Evidence of Compliance with Conditions Precedent ------------------------------------------------ SECTION 2.6 Events of Default; Waiver.................................. 12 ------------------------- SECTION 2.7 Event of Default; Notice................................... 15 ------------------------ ARTICLE III ORGANIZATION SECTION 3.1 Name...................................................... 15 ---- SECTION 3.2 Office.................................................... 16 ------ SECTION 3.3 Purpose................................................... 16 ------- SECTION 3.4 Authority................................................. 16 --------- SECTION 3.5 Title to Property of the Trust............................ 17 ------------------------------ SECTION 3.6 Powers and Duties of the Regular Trustees................. 17 ----------------------------------------- SECTION 3.7 Prohibition of Actions by the Trust and the Trustees...... 20 ---------------------------------------------------- SECTION 3.8 Powers and Duties of the Property Trustee................. 22 ----------------------------------------- SECTION 3.9 Certain Duties and Responsibilities of the Property --------------------------------------------------- Trustee................................................... 24 ------- SECTION 3.10 Certain Rights of the Property Trustee.................... 27 -------------------------------------- SECTION 3.11 Delaware Trustee.......................................... 29 ---------------- SECTION 3.12 Execution of Documents.................................... 30 ---------------------- SECTION 3.13 Not Responsible for Recitals or Issuance of ------------------------------------------- Securities................................................ 30 ---------- SECTION 3.14 Duration of Trust......................................... 30 ----------------- SECTION 3.15 Mergers................................................... 30 -------
i
Page ---- ARTICLE IV SPONSOR SECTION 4.1 Sponsor's Purchase of Common Securities................... 33 --------------------------------------- SECTION 4.2 Responsibilities of the Sponsor........................... 33 ------------------------------- SECTION 4.3 Expenses.................................................. 34 -------- ARTICLE V TRUSTEES SECTION 5.1 Number of Trustees........................................ 35 ------------------ SECTION 5.2 Delaware Trustee.......................................... 35 ---------------- SECTION 5.3 Property Trustee; Eligibility............................. 35 ----------------------------- SECTION 5.4 Qualifications of Regular Trustees and Delaware ----------------------------------------------- Trustee Generally......................................... 37 ----------------- SECTION 5.5 Initial Trustees.......................................... 37 ---------------- SECTION 5.6 Appointment, Removal and Resignation of Trustees.......... 37 ------------------------------------------------ SECTION 5.7 Vacancies among Trustees.................................. 39 ------------------------ SECTION 5.8 Effect of Vacancies....................................... 39 ------------------- SECTION 5.9 Meetings.................................................. 40 -------- SECTION 5.10 Delegation of Power....................................... 40 ------------------- ARTICLE VI DISTRIBUTIONS SECTION 6.1 Distributions............................................. 41 ------------- ARTICLE VII ISSUANCE OF SECURITIES SECTION 7.1 General Provisions Regarding Securities.................... 41 --------------------------------------- ARTICLE VIII TERMINATION OF TRUST SECTION 8.1 Termination of Trust....................................... 43 --------------------
ii
Page ---- ARTICLE IX TRANSFER OF INTERESTS SECTION 9.1 Transfer of Securities..................................... 44 ---------------------- SECTION 9.2 Transfer of Certificates................................... 44 ------------------------ SECTION 9.3 Deemed Security Holders.................................... 45 ----------------------- SECTION 9.4 Book Entry Interests....................................... 45 -------------------- SECTION 9.5 Notices to Clearing Agency................................. 46 -------------------------- SECTION 9.6 Appointment of Successor Clearing Agency................... 47 ---------------------------------------- SECTION 9.7 Definitive Preferred Security Certificates................. 47 ------------------------------------------ SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.......... 48 ------------------------------------------------- ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS SECTION 10.1 Liability................................................. 49 --------- SECTION 10.2 Exculpation............................................... 49 ----------- SECTION 10.3 Fiduciary Duty............................................ 50 -------------- SECTION 10.4 Indemnification........................................... 51 --------------- SECTION 10.5 Outside Businesses........................................ 52 ------------------ ARTICLE XI ACCOUNTING SECTION 11.1 Fiscal Year............................................... 53 ----------- SECTION 11.2 Certain Accounting Matters................................ 53 -------------------------- SECTION 11.3 Banking................................................... 54 ------- SECTION 11.4 Withholding............................................... 54 ----------- ARTICLE XII AMENDMENTS AND MEETINGS SECTION 12.1 Amendments................................................ 55 ---------- SECTION 12.2 Meetings of the Holders; Action by Written ------------------------------------------ Consent................................................... 57 -------
iii
Page ---- ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE SECTION 13.1 Representations and Warranties of Property ------------------------------------------ Trustee................................................... 59 ------- SECTION 13.2 Representations and Warranties of Delaware ------------------------------------------ Trustee................................................... 60 ------- ARTICLE XIV MISCELLANEOUS SECTION 14.1 Notices................................................... 61 ------- SECTION 14.2 Governing Law............................................. 63 ------------- SECTION 14.3 Intention of the Parties.................................. 63 ------------------------ SECTION 14.4 Headings.................................................. 63 -------- SECTION 14.5 Successors and Assigns.................................... 63 ---------------------- SECTION 14.6 Partial Enforceability.................................... 63 ---------------------- SECTION 14.7 Counterparts.............................................. 64 ------------ 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
iv 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(b) 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. AMENDED AND RESTATED DECLARATION OF TRUST OF TCI COMMUNICATIONS FINANCING VI _________ __, 199_ AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"), dated and effective as of _________ __, 199_, 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 VI (the "Trust"), as a business trust under the Delaware Business Trust Act pursuant to a Declaration of Trust dated as of October __, 1996 (the "Original Declaration") and a Certificate of Trust filed with the Secretary of State of the State of Delaware on October __, 1996, 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 securi- ties representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration. 2 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. 3 "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. ------------ -- --- "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 ______________, 199_. ------------ "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. 4 "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 (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. 5 "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 January 29, 1996, 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 Securities 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. 6 "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 ______, 199_, of the Sponsor in respect of the Preferred Securities. "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 7 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 8 officer's knowledge of and familiarity with the particular subject. "Rule 3a-7" means Rule 3a-7 under the Investment Company Act. --------- "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. --------- 9 "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 regula tions, including -------------------- temporary and proposed regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provi sions 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 10 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 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 Trust ee. 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. 11 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. 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: 12 (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 13 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 14 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 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 VI," as such name may be modified from time to time by the Regular 15 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 necessary, or incidental thereto. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, pledge any of its assets, or otherwise undertake (or permit to be undertaken) any activity that would 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. 16 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: (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; 17 (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 Agree ment and Pricing Agreement providing for the sale of the Preferred Securities; (c) to acquire the Subordinated Notes and the Pre ferred 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; (f) to take all actions and perform such duties as may be required of the Regular Trustees pursuant to the terms of the Securities; 18 (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 neces sary to protect the limited liability of the Holders of the Preferred Securities or to enable the Trust to effect the purpos es for which the Trust was created; 19 (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: (i) causing the Trust not to be deemed to be an Investment Company required to be registered under the Invest ment 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 in debtedness 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 appli cable 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 20 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 pro vided herein; (iii) possess Trust property for other than a Trust purpose; (iv) make any loans or incur any indebtedness other than loans represented by the 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 bene ficial 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. 21 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 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 insti tution 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 22 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 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. 23 (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: 24 (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 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; 25 (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; (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 con nection 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. 26 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 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 27 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 shall be sufficient and effective to perform any such action and no third party shall be required to inquire as to the 28 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 29 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 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). 30 (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, amalgam ate, 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 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 Secu rities are listed, or any Successor Securities will be listed upon notification of iss uance, 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' 31 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, pref erences 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. (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. 32 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 (e) to negotiate the terms of the Underwriting Agreement and Pricing Agreement providing for the sale of the Preferred Securities. 33 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. 34 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 re quirements 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. ----------------------------- 35 (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; (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. 36 (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. ---------------- 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 Com- 37 mon 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 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 38 (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 evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with Section 5.6. SECTION 5.8 Effect of Vacancies. ------------------- The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul the Trust. Whenever a vacancy in the number of Regular Trustees 39 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 40 executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) the Regular Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. 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 Securi- 41 ties) 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 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 42 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: (c) 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; (iii) upon the entry of a decree of judicial dissolution of the Holder of the Common Secu rities, 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. 43 (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: (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. ------------------------ 44 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 Certifi- 45 cates shall initially be registered on the books and records of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Certificates, except as provided in Section 9.7. Unless and until definitive, fully registered Preferred Security Certificates (the "Definitive Preferred Security Certificates") have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.7: (a) the provisions of this Section 9.4 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Declaration (including the payment of Distributions on the Global Certificates and receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the sole holder of the Global Certificates and shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.4 conflict with any other provisions of this Declaration, the provisions of this Section 9.4 shall control; and (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established 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 46 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. 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 accept- 47 able 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 re quired by them to keep each of them harmless, then, in the absence of notice that such Certificate shall have been acquired by a bona fide purchaser, any 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. 48 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 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 49 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 Indem nified 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 provi sions 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 50 the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Declaration or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise. (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 Per son by reason of gross negligence (or, in the case of the Property 51 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. 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 oppor tunity 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. 52 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 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. 53 (d) The Regular Trustees shall cause to be duly prepared and filed with the appropriate taxing au thority 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 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 54 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 55 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 (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 Ivestment 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. 56 (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, 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 57 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 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 58 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 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 59 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 60 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 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 VI c/o TCI Communications, Inc. Terrace Tower II 5619 DTC Parkway 61 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: (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, 62 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. 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. 63 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. 64 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: 65 Title: THE BANK OF NEW YORK, as Property Trustee By: _______________________ Name: Title: TCI COMMUNICATIONS, INC., as Sponsor By: _______________________ Name: Title: 66 ANNEX I TERMS OF ___% TRUST ORIGINATED PREFERRED SECURITIES ___% TRUST ORIGINATED COMMON SECURITIES Further to Section 7.1 of the Amended and Restated Declaration of Trust, dated as of _________ __, 199_ (as amended from time to time, the "Declaration"), the designation, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities and the Common Securities are set out below (each capitalized term used but not defined herein has the meaning set forth in the Declaration or, if not defined in such Declaration, as defined in the Prospectus referred to below): 1. Designation and Number. ---------------------- (a) Preferred Securities. [ ] Preferred Securities of the -------------------- Trust with an aggregate liquidation amount with respect to the assets of the Trust of [ ] dollars ($[ ]) and a liquidation amount with respect to the assets of the Trust of $25 per preferred security, are hereby designated for the purposes of identification only as "_____% Trust Originated Preferred Securities/SM/ ('TOPrS'/SM/)" (the "Preferred Securities"). The Preferred Security Certificates evidencing the Preferred Securities shall be substantially in the form of Exhibit A-1 to the Declaration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange on which the Preferred Securities are listed. (b) Common Securities. [ ] Common Securities of the Trust ----------------- with an aggregate liquidation amount with respect to the assets of the Trust of [ ] dollars ($[ ]) 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 "______% I-1 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 Decla ration, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice. 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 there for. 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 ________,199_, 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 quar- I-2 terly 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 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 _________ __, 199-, (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. 333-___). 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, I-3 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 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 insuffi- I-4 cient 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 Subordinat ed 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 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 I-5 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. I-6 "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 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 out- I-7 standing 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. (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 I-8 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 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 I-9 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. (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 I-10 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 I-11 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 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 aggregate 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 I-12 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. (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 I-13 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 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. I-14 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 I-15 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 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. ------- I-16 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. 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-17 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 VI A1-1 ____% Trust Originated Preferred Securities (liquidation amount $25 per Preferred Security) TCI Communications Financing VI, 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 (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 _______, 199_, 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 ___________, 199_ (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 his 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 A1-2 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 or preference 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: COUNTERSIGNED AND REGISTERED: THE BANK OF NEW YORK (New York, New York) Transfer Agent and Registrar By:________________________________ Authorized Signature TCI COMMUNICATIONS FINANCING VI By: _______________________________ Regular Trustee By: _______________________________ Regular Trustee A1-3 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. A1-4 _____________________ ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this to: _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFICATION NUMBER _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ Please print or typewrite name(s) and address(es) including postal zip code(s), of assignee(s) and irrevocably appoints of the Preferred Securities represented by this Certificate _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________ 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 A1-5 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. A1-6 EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE Certificate Number Number of Common Securities Certificate Evidencing Common Securities of TCI Communications Financing VI ______% Trust Originated Common Securities (liquidation amount $25 per Common Security) TCI Communications Financing VI, 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 _______, 199_, as the same may be amended from time to time (the "Declaration"), including the designation of the terms of the Common Securities as set forth in 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. A2-1 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. IN WITNESS WHEREOF, the Trust has executed this certificate this __ day of ____________, 199__. TCI COMMUNICATIONS FINANCING VI By: _________________________ Name: Title: A2-2 _____________________ 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 EXHIBIT B SPECIMEN OF SUBORDINATED NOTE B-1 EXHIBIT C UNDERWRITING AGREEMENT C-1 EX-4.13 9 INDENTURE BETWEEN REGISTRANT AND BANK OF NEW YORK EXHIBIT 4.13 ================================================================================ TCI COMMUNICATIONS, INC. AND THE BANK OF NEW YORK, Trustee _____________________ INDENTURE Dated as of January 29, 1996 _____________________ Subordinated Securities ================================================================================ CROSS-REFERENCE TABLE
TIA INDENTURE SECTION SECTION 310 (a)(1)............................................ 7.10 (a)(2)............................................ 7.10 (a)(3)............................................ N.A. (a)(4)............................................ N.A. (b)............................................... 7.08; 7.10 (c)............................................... N.A. 311 (a)............................................... 7.11 (b)............................................... 7.11 (c)............................................... N.A. 312 (a)............................................... 2.07 (b)............................................... N.A. (c)............................................... N.A. 313 (a)............................................... 7.06 (b)(1)............................................ N.A. (b)(2)............................................ 7.06 (c)............................................... N.A. (d)............................................... 7.06 314 (a)............................................... 4.02 (b)............................................... N.A. (c)(1)............................................ N.A. (c)(2)............................................ N.A. (c)(3)............................................ N.A. (d)............................................... N.A. (e)............................................... 11.05 (f)............................................... N.A. 315 (a)............................................... 7.01(b) (b)............................................... 7.05 (c)............................................... 7.01(a) (d)............................................... 7.01(c) (e)............................................... 6.11 316 (a)(last sentence)................................ N.A. (a)(1)(A)......................................... 6.05 (a)(1)(B)......................................... 6.04 (a)(2)............................................ N.A. (b)............................................... 6.07 317 (a)(1)............................................ 6.08 (a)(2)............................................ 6.09 (b)............................................... 2.06 318 (a)............................................... N.A.
- -------------------- N.A. means Not Applicable. This Cross-Reference Table does not constitute part of the Indenture TABLE OF CONTENTS ----------------- Page ---- ARTICLE ONE Definitions and Incorporation by Reference Section 1.01. Definitions....................................... 1 Section 1.02. Other Definitions................................. 3 Section 1.03. Incorporation by Reference of Trust Indenture Act. 4 Section 1.04. Rules of Construction............................. 4 ARTICLE TWO The Securities Section 2.01. Forms Generally and Dating........................ 4 Section 2.02. Amount Unlimited; Issuable in Series.............. 6 Section 2.03. Denominations..................................... 8 Section 2.04. Execution and Authentication...................... 8 Section 2.05. Registrar and Paying Agent........................ 11 Section 2.06. Paying Agent to Hold Money and Securities in Trust 11 Section 2.07. Securityholder Lists.............................. 12 Section 2.08. Transfer and Exchange............................. 12 Section 2.09. Replacement Securities............................ 15 Section 2.10. Outstanding Securities............................ 15 Section 2.11. Temporary Securities.............................. 16 Section 2.12. Cancellation...................................... 16 Section 2.13. Payment of Interest; Defaulted Interest........... 17 Section 2.14. Persons Deemed Owners............................. 17 Section 2.15. Securities in Global Form......................... 18 Section 2.16. CUSIP Numbers..................................... 19 ARTICLE THREE Redemption Section 3.01. Applicability of Article.......................... 19 Section 3.02. Notices to Trustee................................ 19 Section 3.03. Selection of Securities to be Redeemed............ 20 Section 3.04. Notice of Redemption.............................. 20 Section 3.05. Effect of Notice of Redemption.................... 21 Section 3.06. Deposit of Redemption Price....................... 21 Section 3.07. Securities Redeemed in Part....................... 22
i TABLE OF CONTENTS ----------------- (continued) ARTICLE FOUR Covenants Page ---- Section 4.01. Payment of Securities.............................. 22 Section 4.02. SEC Reports........................................ 22 Section 4.03. Compliance Certificate............................. 23 Section 4.04. Corporate Existence................................ 23 Section 4.05. Calculation of Original Issue Discount............. 23 ARTICLE FIVE Successor Corporation Section 5.01. When Company May Merge, etc........................ 23 ARTICLE SIX Defaults and Remedies Section 6.01. Events of Default................................... 24 Section 6.02. Acceleration........................................ 25 Section 6.03. Other Remedies...................................... 26 Section 6.04. Waiver of Existing Defaults......................... 26 Section 6.05. Control by Majority................................. 26 Section 6.06. Limitation of Suits................................. 26 Section 6.07. Rights of Holders to Receive Payment and to Convert. 27 Section 6.08. Collection Suit by Trustee.......................... 27 Section 6.09. Trustee May File Proofs of Claim.................... 28 Section 6.10. Priorities.......................................... 28 Section 6.11. Undertaking for Costs............................... 28 ARTICLE SEVEN Trustee Section 7.01. Duties of Trustee................................... 29 Section 7.02. Rights of Trustee................................... 30 Section 7.03. Individual Rights of Trustee........................ 30 Section 7.04. Trustee's Disclaimer................................ 30 Section 7.05. Notice of Defaults.................................. 31 Section 7.06. Reports by Trustee to Holders....................... 31
ii TABLE OF CONTENTS ----------------- (continued) Page ---- Section 7.07. Compensation and Indemnity....................... 31 Section 7.08. Replacement of Trustee........................... 32 Section 7.09. Successor Trustee by Merger, etc................. 33 Section 7.10. Eligibility; Disqualification.................... 33 Section 7.11. Preferential Collection of Claims Against Company 33 ARTICLE EIGHT Discharge of Indenture Section 8.01. Termination of Company's Obligations............. 34 Section 8.02. Application of Trust Fund........................ 35 Section 8.03. Repayment to Company............................. 35 ARTICLE NINE Amendments, Supplements and Waivers Section 9.01. Without Consent of Holders........................ 35 Section 9.02. With Consent of Holders........................... 36 Section 9.03. Compliance with the Trust Indenture Act........... 38 Section 9.04. Revocation and Effect of Consents................. 38 Section 9.05. Notation on or Exchange of Securities............. 38 Section 9.06. Trustee to Sign Amendments, etc................... 38 ARTICLE TEN Subordination Section 10.01. Subordination Terms............................... 39 ARTICLE ELEVEN Miscellaneous Section 11.01. Trust Indenture Act Controls...................... 39 Section 11.02. Notices........................................... 39 Section 11.03. Communication by Holders with Other Holders....... 40 Section 11.04. Certificate and Opinion as to Conditions Precedent 40 Section 11.05. Statements Required in Certificate or Opinion..... 40 Section 11.06. When Treasury Securities Disregarded.............. 41 Section 11.07. Rules by Trustee and Agents....................... 41
iii TABLE OF CONTENTS ----------------- (continued) Page ---- Section 11.08. Legal Holidays.................................... 41 Section 11.09. Governing Law..................................... 41 Section 11.10. No Adverse Interpretation of Other Agreements..... 42 Section 11.11. No Recourse Against Others........................ 42 Section 11.12. Successors........................................ 42 Section 11.13. Duplicate Originals............................... 42 Section 11.14. Table of Contents, Headings, Etc.................. 42 Section 11.15. Acts of Holders................................... 42 Section 11.16. Assignment................................ 43
iv INDENTURE dated as of January 29, 1996, between TCI COMMUNICATIONS, INC., a Delaware corporation ("Company"), and THE BANK OF NEW YORK, a New York banking corporation ("Trustee"). The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured subordinated debentures, notes, bonds or other evidences of subordinated indebtedness ("Securities"), to be issued in one or more series as provided in this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the respective Holders from time to time of Securities or of series thereof: ARTICLE ONE Definitions and Incorporation by Reference Section 1.01. Definitions. Affiliate of any Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person. Agent means any Registrar, Paying Agent or co-Registrar. See Section 2.05. Board of Directors means the Board of Directors of the Company or any authorized committee thereof. Business Day means any day which is not a Legal Holiday. Company means the party named as such in this Indenture until a successor replaces it pursuant to the applicable provisions of this Indenture and thereafter means the successor. Holder or Securityholder means the person in whose name a Security is registered on the Registrar's books. Indenture means this Indenture as amended or supplemented from time to time and, unless the context indicates otherwise, shall include the form and terms of a particular series of Securities established as contemplated hereunder. interest, when used with respect to an Original Issue Discount Security which by its terms bears interest only after maturity or upon default in any other payment due on such Security, means interest payable after maturity or upon such default, as the case may be. 1 Interest Payment Date means the date, if any, specified in the Securities of any series as the fixed date on which any installment of interest on the Securities of that series is due and payable. Officer means the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company. Officers' Certificate means a certificate signed by two Officers or by an Officer and an Assistant Treasurer or an Assistant Secretary of the Company and delivered to the Trustee. See Sections 11.04 and 11.05. Opinion of Counsel means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. See Sections 11.04 and 11.05. original issue discount of any debt security, including any Original Issue Discount Security, means the difference between the principal amount of such debt security and the initial issue price of such debt security (as set forth, in the case of an Original Issue Discount Security, on the face of such Security). Original Issue Discount Security means any Security which provides for an amount less than the principal amount thereof to be due and payable upon acceleration of the maturity thereof pursuant to Section 6.02. Person means any individual, corporation, partnership, limited liability company, joint venture, joint-stock company, unincorporated association or government or any agency or political subdivision thereof. Predecessor Securities means, with respect to any Security, every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security, and, for the purpose of this definition, any Security authenticated and delivered under Section 2.09 in exchange for or in lieu of a mutilated, lost, destroyed or wrongfully-taken Security shall be deemed to evidence the same debt as the mutilated, lost, destroyed or wrongfully taken Security. principal of a debt security, including any Security, means the amount (including, without limitation, if and to the extent applicable, any premium and, in the case of an Original Issue Discount Security, any accrued original issue discount, but excluding interest) that is payable with respect to such debt security as of any date and for any purpose (including, without limitation, in connection with any sinking fund, upon any redemption at the option of the Company, upon any purchase or exchange at the option of the Company or the holder of such debt security and upon any acceleration of the maturity of such debt security). 2 principal amount of a debt security, including any Security, means the principal amount as set forth on the face of such debt security. Regular Record Date means the date, if any, specified in the Securities of any series as the record date for the determination of Securityholders to whom interest is payable on the next succeeding Interest Payment Date. SEC means the Securities and Exchange Commission. Securities means the Securities that are issued from time to time in one or more series under this Indenture as such Securities are amended or supplemented from time to time. Subsidiary means a corporation a majority of whose voting stock is owned by the Company and/or one or more Subsidiaries. Voting stock is capital stock having voting power under ordinary circumstances to elect directors. TIA means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in Section 9.03. Trustee means the party named as such in this Indenture until a successor replaces it and thereafter means the successor and if at any time there is more than one such party, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. Trust Officer means any officer or assistant officer in the corporate trust department of the Trustee assigned by the Trustee to administer its corporate trust matters. United States means the United States of America. U.S. Government Obligations means direct obligations of, or obligations entitled to the full faith and credit of, the United States. Section 1.02. Other Definitions. TERM DEFINED IN SECTION Bankruptcy Law 6.01 Code 9.01 Custodian 6.01 Event of Default 6.01 Legal Holiday 11.08 Paying Agent 2.05 Registrar 2.05 3 Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: Commission means the SEC. indenture securities means the Securities. indenture security holder means a Securityholder. indenture to be qualified means this Indenture. indenture trustee or institutional trustee means the Trustee. obligor on the indenture securities means the Company and any other obligor thereon. Section 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in effect on the date of this Indenture; (3) "or" is not exclusive; and (4) words in the singular include the plural, and in the plural include the singular. 4 ARTICLE TWO The Securities Section 2.01. Forms Generally and Dating. The Securities of each series may be issued in whole or in part in the form of one or more global Securities as shall be specified as contemplated by Section 2.02. The Securities of each series (including any temporary global Securities) shall be in one of the forms established from time to time by or pursuant to a resolution of the Board of Directors or in or pursuant to one or more indentures supplemental hereto, which shall set forth the information required by Section 2.02. The Securities shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or by a resolution of the Board of Directors or indenture supplemental hereto and may have such notations, legends or endorsements as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required by law, stock exchange rule or usage. The Company shall approve the forms of the Securities and any notation, legend or endorsement on them. If the form or forms of Securities of any series is established by action taken pursuant to a resolution of the Board of Directors or indenture supplemental hereto, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the written order of the Company contemplated by Section 2.04 for the authentication and delivery of such Securities. Each Security shall be dated the date of its authentication. The form of the Trustee's certificate of authentication to be borne by the Securities shall be substantially as follows: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK as Trustee By: ___________________________________ Authorized Signatory 5 Section 2.02. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a resolution of the Board of Directors or established in or pursuant to one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of the Securities of the Series (which shall distinguish Securities of the series from all other Securities); (2) any limit upon the aggregate principal amount of Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 2.08, 2.09, 2.11, 3.07 or 9.05 and except for any Securities which pursuant to Section 2.04 are deemed not to have been authenticated and delivered hereunder); (3) (A) whether any of the Securities of the series are to be issuable in global form and, if so, (i) the identity of the depositary with respect to any such global Security and (ii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same series and of like tenor and of any authorized form and denomination, and, if so, the circumstances under which and the manner in which any such exchanges may occur, if other than as specified in Section 2.08; (B) if any of the Securities of the series are to be issuable in global form, the date as of which any global Security shall be dated (if other than the date of original issuance of the first of such Securities to be issued); and (C) if Securities of the series are to be issuable in definitive form (whether upon original issue, upon exchange of a temporary Security of such series, or in exchange for a beneficial ownership interest in a permanent global Security) only upon receipt of certain certificates or other documents or satisfaction of other conditions, or if Securities of the series are initially issuable in temporary global form and if owners of beneficial interests therein may exchange such interest for an interest in a permanent global Security only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and/or terms of such certificates, documents or conditions; (4) the date or dates (and whether fixed or extendible) on which the principal of Securities of the series is payable; 6 (5) the rate or rates at which Securities of the series shall bear interest, or the method of determining the same, if any, the date or dates from which such interest shall accrue, or the method of determining the same, if any, the Interest Payment Dates (and whether fixed or extendible) and the Regular Record Dates; (6) the place or places where the principal of and any interest on Securities of the series shall be payable; (7) any provisions relating to the issuance of Securities of such series at an original issue discount (including, without limitation, the issue price thereof, the rate or rates at which such original issue discount shall accrue, if any, and the date or dates from or to which or period or periods during which such original issue discount shall accrue at such rate or rates); (8) the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed or otherwise purchased, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise (including, without limitation, the form or method of payment thereof if other than in cash); (9) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Securityholder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation (including, without limitation, the form or method of payment thereof, if other than in cash); (10) if other than denominations of $25 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; (11) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon acceleration of the maturity thereof pursuant to Section 6.02 or provable in bankruptcy pursuant to Section 6.09; (12) any Events of Default with respect to the Securities of a particular series in lieu of or in addition to those set forth herein and the remedies therefor; (13) the terms of the subordination of Securities of the series; and 7 (14) any other terms of a particular series and any other provisions expressing or referring to the terms and conditions upon which the Securities of that series are to be issued under this Indenture, which terms and provisions are not in conflict with the provisions of this Indenture; provided, however, the addition to or subtraction from or variation of Articles Four, Five, Six and Eight (and Sections 1.01 and 1.02, insofar as they relate to the definition of certain terms as used in such Articles) with regard to the Securities of a particular series shall not be deemed to constitute a conflict with the provisions of those Articles. All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such resolution of the Board of Directors or in any such indenture supplemental hereto. Not all Securities of any one series need be issued at the same time, and, unless otherwise so provided, a series may be reopened for issuances of additional Securities of such series. If any of the terms of the Securities of a series are established by action taken pursuant to a resolution of the Board of Directors or indenture supplemental hereto, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee with an Officers' Certificate setting forth the terms or the manner of determining the terms of the Securities of such series. With respect to Securities of a series which are not to be issued at one time, such resolution of the Board of Directors or action may provide general terms or parameters for Securities of such series and provide either that the specific terms of particular Securities of such series shall be specified in a written order of the Company or that such terms shall be determined by the Company or its agents in accordance with a written order of the Company as contemplated by the proviso clause of the fourth paragraph of Section 2.04. Section 2.03. Denominations. The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by Section 2.02. In the absence of any such provisions with respect to the Securities of any series, the securities of such series shall be issuable in denominations of $25 and any integral multiple thereof. Section 2.04. Execution and Authentication. Two Officers shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. 8 A Security shall not be entitled to any benefit under this Indenture or be valid for any purpose until the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Notwithstanding the foregoing, if any Security shall have been duly authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 2.12 together with a written statement (which need not comply with Sections 11.04 and 11.05 and need not be accompanied by an Opinion of Counsel) stating that such Security has not been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed not to have been authenticated and delivered hereunder and shall not be entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, and the Trustee shall authenticate and deliver said Securities to or upon the written order of the Company, signed by two Officers or by an Officer and an Assistant Treasurer of the Company, without any further action by the Company. Such written order shall specify the date on which said Securities shall be authenticated; provided, however, that if not all the Securities of a series are to be issued at one time and if the resolution of the Board of Directors or indenture supplemental hereto establishing such series as contemplated by Sections 2.01 and 2.02 shall so permit, such written order may set forth procedures acceptable to the Trustee for the issuance of such Securities and for determining the form or terms of particular Securities of such series including, but not limited to, interest rate, maturity date, date of issuance and date from which interest shall accrue. If the form or forms or terms of the Securities of the series have been established in or pursuant to one or more resolutions of the Board of Directors or indentures supplemental hereto as permitted by Sections 2.01 and 2.02, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating: (1) if the form or forms of such Securities has been established by or pursuant to a resolution of the Board of Directors or indenture supplemental hereto, that such form or forms has been established in conformity with the provisions of this Indenture; (2) if the terms of such Securities have been established by or pursuant to a resolution of the Board of Directors or indenture supplemental hereto, that such terms have been established in conformity with the provisions of this Indenture; and (3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any 9 conditions specified in such Opinion of Counsel, will have been duly issued and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equitable principles; provided, however, that, with respect to Securities of a series which are not to be issued at one time, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication of Securities of such series and that the opinions described in clauses (2) and (3) above may state, respectively, (a) that, when the terms of such Securities shall have been established pursuant to a written order of the Company or pursuant to such procedures as may be specified from time to time by a written order of the Company, all as contemplated by and in accordance with a resolution of the Board of Directors or an Officers' Certificate pursuant to a resolution of the Board of Directors or indenture supplemental hereto, as the case may be, such terms will have been established in conformity with the provisions of this Indenture; and (b) that such Securities, when (i) executed by the Company, (ii) completed, authenticated and delivered by the Trustee in accordance with this Indenture, (iii) issued and delivered by the Company and (iv) paid for, all as contemplated by and in accordance with the aforesaid written order of the Company or specified procedures, as the case may be, will have been duly issued and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equitable principles. Notwithstanding the provisions of Sections 2.01, 2.02, 11.04 and this Section, if all the Securities of a series are not to be originally issued at one time, the resolution of the Board of Directors or indenture supplemental hereto, and certified copy of the record of action taken pursuant to such resolution or supplemental indenture, the Officers' Certificate, the written order of the Company and any other documents otherwise required pursuant to such Sections need not be delivered at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued; provided, however, that any subsequent request by the Company to the Trustee to authenticate Securities of such series shall constitute a representation and warranty by the Company that as of the date of such request, the statements made in the Officers' Certificate delivered pursuant to Section 11.04 at 10 or prior to authentication of the first such Security shall be true and correct on the date thereof as if made on and as of the date thereof. The Trustee shall have the right to decline to authenticate and make available for delivery any Securities under this Section if the issuance of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. With respect to Securities of a series which are not all issued at one time, the Trustee may conclusively rely, as to the authorization by the Company of any of such Securities, the form and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel, Officers' Certificate and other documents delivered pursuant to Sections 2.01, 2.02, 11.04 and this Section, as applicable, at or prior to the time of the first authentication of Securities of such series unless and until such opinion, certificate or other documents have been superseded or revoked. In connection with the authentication and delivery of Securities of a series which are not all issued at one time, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Securities do not violate any rules, regulations or orders of any governmental agency or commission having jurisdiction over the Company. Section 2.05. Registrar and Paying Agent. The Company shall maintain an office or agency where Securities of each series may be presented for registration of transfer or for exchange ("Registrar"), and an office or agency where Securities of each series may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities of each series issued hereunder and of their transfer and exchange. The Company may have one or more co-Registrars (provided that there shall be only one register, which shall be maintained by the principal Registrar) and one or more additional paying agents with respect to any series. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall promptly notify the Trustee of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such. The Company initially appoints the Trustee Registrar and Paying Agent for each series. Section 2.06. Paying Agent to Hold Money and Securities in Trust. Subject to any applicable terms of the Securities of the relevant series relating to subordination (as contemplated by Article Ten and Section 2.02), each Paying Agent shall 11 hold in trust for the benefit of Securityholders of such series or the Trustee all money and securities held by the Paying Agent for the payment of any amount in respect of the Securities of such series, and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate such money and securities and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money and securities held by it to the Trustee and account for any funds or securities disbursed. Upon doing so the Paying Agent shall have no further liability for the money or securities. Section 2.07. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before either (1) April 1 and October 1 in each year in the case of Original Issue Discount Securities of any series which by their terms do not bear interest prior to maturity (other than upon a default in any payment upon such a Security) or (2) each Interest Payment Date for the Securities of any other series, but in no event less frequently than semi-annually, and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. Section 2.08. Transfer and Exchange. Where a Security is presented to the Registrar or a co-Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements for such transfer are met. Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a global Security representing all or a portion of the Securities of or within a series may not be transferred except as a whole by the depositary for such series to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor depositary for such series or a nominee of such successor depositary. Where Securities are presented to the Registrar or a co-Registrar with a request to exchange them for an equal aggregate principal amount of Securities of the same series of other authorized denominations, the Registrar shall make the exchange as requested (other than with respect to a global Security, except as provided below or as otherwise specified as contemplated by Section 2.02) if its requirements for such exchange are met. The Registrar shall require, among other things, that any Security presented or surrendered for transfer or exchange be duly endorsed, or be accompanied by appropriate transfer documents duly endorsed, or be accompanied by appropriate transfer documents duly executed, by the Holder thereof or his attorney duly authorized in writing. To permit transfers and exchanges, the Trustee shall authenticate Securities at the Registrar's request. Any exchange or transfer shall be without charge, except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. 12 The Registrar need not transfer or exchange any Security selected for redemption or purchase (except, in the case of Securities to be redeemed or purchased in part, the portion thereof not to be redeemed or purchased) any Security in respect of which a notice requiring the purchase or redemption thereof by the Company at the option of the Holder has been given and not withdrawn by the Holder thereof in accordance with the terms of such Securities (except in the case of Securities to be so purchased or redeemed in part, the portion thereof not to be so purchased or redeemed) or transfer or exchange Securities of any particular series during a period of 15 days before a selection of Securities of such series to be redeemed. Except as otherwise provided with respect to the Securities of any series as contemplated by Section 2.02, a global Security may be exchanged only as provided below in this Section. If at any time the depositary with respect to a global Security representing all or a portion of the Securities of or within a series notifies the Company that it is unwilling, unable or ineligible to continue as such depositary, the Company shall appoint a successor depositary with respect to such Securities. Unless otherwise provided with respect to a series of Securities as contemplated by Section 2.02, if a successor depositary is not so appointed by the Company within 90 days after the Company receives such notice, the Company will execute and the Trustee, upon receipt of a written order of the Company as contemplated by Section 2.04 for the authentication and delivery of definitive Securities of such series (or, if such written order has previously been delivered, then upon receipt of written instructions from the person or persons specified in such written order), will authenticate and deliver Securities of such series in definitive form equal in aggregate principal amount to the principal amount of the global Security or Securities representing such series in exchange for such global Security or Securities. The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more global Securities shall no longer be represented by such global Security or Securities. In such event the Company will execute and the Trustee, upon receipt of a written order of the Company as contemplated by Section 2.04 for the authentication and delivery of definitive Securities of such series (or, if such written order has previously been delivered, then upon receipt of written instructions from the person or persons specified in such written order), will authenticate and deliver Securities of such series in definitive form equal in aggregate principal amount to the principal amount of the global Security or Securities representing such series in exchange for such global Security or Securities. If a global Security is otherwise exchangeable as specified by the Company pursuant to Section 2.02(3) with respect to a series of Securities, the depositary with respect to a global Security representing all or a portion of the Securities of or within such series may surrender such global Security to the Trustee, as the Company's agent for such purpose, to be exchanged in whole or in part for Securities of such series in definitive form in the manner 13 and under the circumstances so specified and on such terms as are acceptable to the Company and such depositary. In such event, the Company shall execute and the Trustee shall authenticate and deliver or make available for delivery: (i) to each Person specified by such depositary a new Security or Securities of the same series and of like tenor, of any authorized form and denomination as requested by such Person in aggregate principal amount equal to and in exchange for such Person's beneficial interest in the global Security; and (ii) unless endorsement of the surrendered global Security as contemplated by Section 2.15 or another procedure is specified for the Securities of such series as contemplated by Section 2.02, to such depositary a new global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered global Security and the aggregate principal amount of Securities delivered pursuant to clause (i) above in exchange for beneficial interests in such surrendered global Security. In any exchange provided for in any of the preceding three paragraphs, the Company will execute and the Trustee will authenticate and deliver Securities in definitive registered form in authorized denominations. Upon the exchange of a global Security for Securities in definitive form, such global Security shall be cancelled by the Trustee, unless endorsement of the surrendered global Security as contemplated by Section 2.15 or another procedure is specified for the Securities of such series as contemplated by Section 2.02. Securities issued in exchange for a global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the depositary for such global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the persons in whose names such Securities are so registered. If a Security is issued in exchange for any portion of a global Security after the close of business at the office or agency where such exchange occurs (i) on any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) on any special record date and before the opening of business at such office or agency on the related date for payment of defaulted interest, interest or defaulted interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Security, but will be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom interest in respect of such portion of such global Security is payable in accordance with the provisions of this Indenture. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the 14 same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Section 2.09. Replacement Securities. If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, then in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall issue and the Trustee shall authenticate a replacement Security if the Trustee's requirements are met. If required, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security is replaced. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. In case any such lost, destroyed or wrongfully-taken Security has become or is about to become due and payable, or is about to be purchased by the Company pursuant to any provision of the Securities of such series providing for the purchase thereof at the option of the Holder or the Company, the Company in its discretion may, instead of issuing a new Security, pay or purchase such Security. Every new Security issued pursuant to this Section in lieu of any lost, destroyed or wrongfully-taken Security shall constitute a separate obligation of the Company, whether or not the lost, destroyed or wrongfully- taken Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series duly issued hereunder. The provisions of this Section, as amended or supplemented pursuant to this Indenture with respect to particular Securities or generally, shall be exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully-taken Securities. Section 2.10. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section as not being outstanding. A Security does not cease to be outstanding because the Company or one of its Affiliates holds the Security. If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. 15 If the Paying Agent holds on a redemption date or maturity date or on the Business Day following a date on which Securities of such series are to be purchased by the Company pursuant to any provision thereof providing for such purchase at the option of the Holder or the Company, money (or securities if permitted by the terms of such Securities) in trust or, if the Company, acting as its own Paying Agent, sets aside and segregates money (or securities if permitted by the terms of such Securities) in trust, sufficient to pay Securities payable on that date, then, on and after that date such Securities cease to be outstanding and interest, if any (and original issue discount, if Original Issue Discount Securities), on them ceases to accrue, unless the Paying Agent is restricted under the terms of the Securities of such series (specified as contemplated by Section 2.02) in applying such money. Section 2.11. Temporary Securities. Pending the preparation of a permanent global Security or definitive Securities of any series, the Company may execute and the Trustee, upon the written order of the Company pursuant to Section 2.04, shall authenticate and deliver temporary Securities. Temporary Securities of any series shall be in authorized denominations and substantially of the tenor of the definitive Securities of that series in lieu of which they are issued, but may have variations that the Company considers appropriate for temporary Securities. In the case of Securities of any series, such temporary Securities may be in global form. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, and upon surrender for cancellation of any one or more temporary Securities of such series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like aggregate principal amount of definitive Securities of authorized denominations of the same series and containing identical terms and provisions. Until so exchanged, the temporary Securities of any series shall, except as otherwise specified as contemplated by Section 2.02 (including with respect to the payment of interest on temporary Securities), in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder. Section 2.12. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation, including Securities authenticated which the Company has not issued and sold. The Company and each Agent shall forward to the Trustee any Securities surrendered to them for transfer, exchange, payment, redemption, or purchase by the Company pursuant to any provision thereof providing for such purchase at the option of the Holder. The Trustee and no one else shall cancel all Securities surrendered for transfer, exchange, payment, redemption, purchase, or cancellation, and may dispose of cancelled Securities as the Company directs; provided, however, that the Trustee shall not be required to destroy such cancelled Securities. Except as otherwise provided in the resolution of the Board of Directors or indenture supplemental hereto establishing such series as contemplated by Section 2.02, the 16 Company may not issue new Securities of a series to replace Securities of the same series that it has paid or that have been delivered to the Trustee for cancellation. Section 2.13. Payment of Interest; Defaulted Interest. Unless otherwise provided with respect to the Securities of any series as contemplated by Section 2.02, interest (except defaulted interest) on any Security of any series which is payable on any Interest Payment Date shall be paid to the Holder in whose name that Security (or one or more Predecessor Securities) is registered on the security register at the close of business on the Regular Record Date for such interest payment. At the option of the Company, payment of interest on any Security may be made (i) by check mailed to the address of the Person entitled thereto as such address appears in the security register, or (ii) if so specified with respect to the Securities of such series as contemplated by Section 2.02, by wire transfer to any account designated by such Person. If the Company defaults in a payment of interest on the Securities of any series on any Interest Payment Date, it shall pay the defaulted interest to the Persons who are Securityholders of such series at the close of business on a subsequent special record date. The Company shall fix the special record date and payment date. At least 15 days before the record date, the Company shall mail to each Securityholder of such series a notice that states the special record date, the payment date and the amount of defaulted interest proposed to be paid. The Company shall notify the Trustee in writing of the amount of the defaulted interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. The Company may pay defaulted interest in any other lawful manner. Section 2.14. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any Agent may treat the person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and (subject to Section 2.13) interest on such Security and for all other purposes whatsoever, and neither the Company, the Trustee nor any Agent shall be affected by notice to the contrary. No holder of any beneficial interest in any global Security held on its behalf by a depositary shall have any rights under this Indenture with respect to such global Security, and such depositary (or its nominee, if such global Security is registered in the name of a nominee) may be treated by the Company, the Trustee, and any Agent as the owner of such global Security for all purposes whatsoever. None of the Company, the Trustee, or any Agent will have any responsibility or liability for any aspect of the records relating to or payments 17 made on account of beneficial ownership interests of a global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, with respect to any global Security, nothing herein shall prevent the Company, the Trustee, or any Agent from giving effect to any written certification, proxy or other authorization furnished by any depositary, as a Holder, with respect to such global Security or impair, as between such depositary and owners of beneficial interests in such global Security, the operation of customary practices governing the exercise of the rights of such depositary (or its nominee) as Holder of such global Security. Section 2.15. Securities in Global Form. If the Company shall establish pursuant to Section 2.02 that the Securities of or within a series are to be issued in whole or in part in global form, then the Company shall execute, and the Trustee shall, in accordance with Section 2.04 and the written order of the Company contemplated thereby, authenticate and deliver one or more global Securities in temporary or permanent form that (i) shall be registered in the name of the depositary for such global Security or Securities or the nominee of such depositary, (ii) shall be delivered by the Trustee to such depositary or pursuant to such depositary's instructions, and (iii) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive form, this Security may not be transferred except as a whole by the depositary to a nominee of the depositary or another nominee of the depositary or by the depositary or any such nominee to a successor depositary or a nominee of such successor depositary." Each depositary designated pursuant to Section 2.02 for a global Security in registered form must be, to the extent required by applicable law or regulation, a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation, at the time of its designation and at all times that it serves as depositary. Notwithstanding clause (14) of Section 2.02 and the provisions of Section 2.03, any such global Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities of such series from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be increased or decreased to reflect exchanges. Any endorsement of a Security in a global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of outstanding Securities represented thereby shall be made in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the written order of the Company to be delivered to the Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if applicable, Section 2.11, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable written order of the Company. If a written order of the Company pursuant to Section 2.04 has been, or simultaneously is, delivered, any instructions with respect to a Security in global form shall be in writing but need not comply with Sections 11.04 and 11.05 and need not be accompanied by an Opinion of Counsel. 18 The provisions of the last sentence of the third paragraph of Section 2.04 shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global form together with written instructions (which need not comply with Sections 11.04 and 11.05 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities represented thereby, together with the written statement contemplated by the last sentence of the third paragraph of Section 2.04. Section 2.16. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may -------- state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. ARTICLE THREE Redemption Section 3.01. Applicability of Article. Securities of any series which are redeemable before their stated maturity at the election of the Company or through the operation of any sinking fund for the retirement of Securities of such series shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.02 for Securities of any series) in accordance with this Article. Section 3.02. Notices to Trustee. If the Company elects to redeem all or less than all the Securities of any series, it shall notify the Trustee of the redemption date, the principal amount of Securities to be redeemed, the specific provision of the Securities pursuant to which the Securities being called for redemption are being redeemed and the redemption price. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. If the Company wants to make any permitted optional sinking fund payment, it shall notify the Trustee of the principal amount of the Securities to be redeemed. 19 The Company (1) may deliver outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed or otherwise purchased either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities in satisfaction of all or any part of any sinking fund payment required to be made pursuant to the terms of the Securities of such series as provided for by the terms of such series: provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. The Company shall notify the Trustee of its intention to so reduce the amount of such sinking fund payment, the amount of the reduction and the basis for it. The Company shall deliver to the Trustee with such notice any Securities to be credited for such purpose that it has not previously delivered to the Trustee for cancellation. The Company shall give each notice and Officers' Certificate provided for in this Section at least 60 days before the redemption date (unless a shorter notice shall be satisfactory to the Trustee or is otherwise specified as contemplated by Section 2.02 for Securities of any series). Section 3.03. Selection of Securities to be Redeemed. Except as otherwise specified as contemplated by Section 2.02 for Securities of any series, if less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected from Securities of the same series outstanding not previously called for redemption by such method as the Trustee considers fair and appropriate (and in such manner as complies with applicable requirements of any stock exchange on which Securities of such series are listed) and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series that have denominations larger than the minimum authorized denomination for Securities of that series. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. Section 3.04. Notice of Redemption. At least 30 days but no more than 60 days before a redemption date (unless a shorter notice is specified as contemplated by Section 2.02 for Securities of any series), the Company shall mail a notice of redemption by first-class mail to each Holder of Securities of the series to be redeemed. The notice shall identify the Securities, including CUSIP number, if any (and, in the case of partial redemption, the principal amount of the Securities), to be redeemed and shall state: 20 (1) the redemption date; (2) the redemption price and method of payment, if other than in cash; (3) the name and address of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) that interest, if any (or original issue discount, if Original Issue Discount Securities), on Securities called for redemption ceases to accrue on and after the redemption date, unless the Company defaults in making such redemption payment; and (6) that the redemption is for a sinking fund or at the election of the Company, whichever is the case. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense, provided that the Company shall have furnished to the Trustee the Officers' Certificate and Opinion of Counsel required pursuant to Section 11.04 at least 15 days prior to the date that the Trustee is required to take any action in connection with a redemption. Section 3.05. Effect of Notice of Redemption. Once notice of redemption is mailed, Securities of the series called for redemption become due and payable on the redemption date and at the redemption price therein specified and on and after such date (unless the Company shall default in the payment of the redemption price and accrued interest, if any) such Securities shall cease to bear interest, if any (and original issue discount, if such Securities are Original Issue Discount Securities, shall cease to accrue). Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price, plus, if applicable, accrued interest, if any, to the redemption date: provided, however, that installments of interest the Interest Payment Date for which is on or prior to the redemption date shall be payable to the persons who are Holders of such Securities (or one or more Predecessor Securities) on the relevant record dates for such interest according to their terms and Section 2.13. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the redemption date at the rate prescribed therefor in the Security. Section 3.06. Deposit of Redemption Price. On or before 11:00 a.m., New York time, on the redemption date, the Company shall deposit with the Paying Agent money (or securities if permitted by the terms 21 of such Securities) sufficient to pay the redemption price of, and (except if the redemption date is an Interest Payment Date) accrued interest, if any, on, all Securities to be redeemed on that date other than Securities or portions thereof called for redemption on that date which are delivered by the Company to the Trustee for cancellation. Section 3.07. Securities Redeemed in Part. Any Security that is to be redeemed only in part shall be surrendered at a place of payment therefor (with, if the Company, the Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company, the Registrar and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, containing identical terms and provisions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal amount of the Security so surrendered, and, unless otherwise specified as contemplated by Section 2.02, if a global Security is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the depositary for such global Security, without service charge, a new global Security in a denomination equal to and in exchange for the unredeemed portion of the principal amount of the global Security so surrendered. ARTICLE FOUR Covenants Section 4.01. Payment of Securities. The Company shall pay the principal of and any interest on the Securities of each series in accordance with the terms of the Securities of such series and this Indenture. To the extent enforceable under applicable law, the Company shall pay interest on overdue principal at the rate borne by the Securities of such series (unless a different rate is specified as contemplated by Section 2.02 for Securities of such series). Section 4.02. SEC Reports. The Company shall file with the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The Company also shall comply with the other provisions of TIA (S)314(a). 22 Section 4.03. Compliance Certificate. The Company will, within 120 days after the close of each fiscal year of the Company, commencing with the first fiscal year following the issuance of Securities of any series under this Indenture (but in any event within the time required by TIA (S) 314(a)), file with the Trustee a certificate of the principal executive officer, the principal financial officer or the principal accounting officer of the Company, covering the period from the date of issuance of such Securities to the end of the fiscal year in which such Securities were issued, in the case of the first such certificate, and covering the preceding fiscal year in the case of each subsequent certificate, and stating whether or not, to the knowledge of the signer, the Company has complied with all conditions and covenants on its part contained in this Indenture, and, if the signer has obtained knowledge of any default by the Company in the performance, observance or fulfillment of any such condition or covenant, specifying each such default and the nature thereof. For the purposes of this Section 4.03, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture. The certificate need not comply with Section 11.05. Section 4.04. Corporate Existence. Subject to the provisions of Section 5.01, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. Section 4.05. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year a written notice specifying the amount of original issue discount (including daily rates and accrual periods), if any, accrued on outstanding Securities as of the end of such year. ARTICLE FIVE Successor Corporation Section 5.01. When Company May Merge, etc. The Company shall not consolidate with or merge into, or transfer its properties and assets substantially as an entirety to, another corporation unless (1) the successor corporation, which shall be a corporation organized and existing under the laws of the United States or a State thereof, assumes by supplemental indenture all the obligations of the Company under the Securities and this Indenture; and (2) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing. Thereafter, unless otherwise specified as contemplated by Section 2.02 for the Securities of any series, all such obligations of the predecessor corporation shall terminate. 23 ARTICLE SIX Defaults and Remedies Section 6.01. Events of Default. An "Event of Default" with respect to Securities of any series means each of the events specified below in this Section 6.01, unless it is either inapplicable to a particular series or is specifically deleted or modified as contemplated by Section 2.02 for the Securities of such series, and any other events as may be specified as contemplated by Section 2.02 for the Securities of such series: (1) the Company defaults in the payment of any interest on any Security of that series when the same becomes due and payable and the default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of any Security of that series when the same becomes due and payable at maturity, upon redemption (including default in the making of any mandatory sinking fund payment), upon purchase by the Company at the option of the Holder pursuant to the terms of such Security or otherwise; (3) the Company fails to comply with any of its other agreements in Securities of that series or this Indenture (other than an agreement which has expressly been included in this Indenture solely for the benefit of Securities of any series other than that series or is expressly made inapplicable to the Securities of such series as contemplated by Section 2.02) and the default continues for the period and after the notice specified below; (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, or consents to the commencement of a case against it, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; 24 (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case or adjudicates the Company insolvent or bankrupt, (B) appoints a Custodian of the Company or for all or substantially all of its property, or (C) orders the winding up or liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days; or (6) any other Event of Default provided with respect to Securities of that series occurs. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A default under clause (3) is not an Event of Default until the Trustee notifies the Company or the Holders of at least 25% in aggregate principal amount of the outstanding Securities of that series notify the Company and the Trustee of the default and the Company does not cure the default within 90 days after receipt of the notice. The notice must specify the default, demand that it be remedied and state that the notice is a "Notice of Default." Section 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(4) or (5)) occurs and is continuing with respect to Securities of any series at the time outstanding, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the outstanding Securities of that series by notice to the Company and the Trustee, may declare to be due and payable immediately (1) the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of the Securities of that series) of all of the Securities of that series then outstanding and (2) interest, if any, accrued to the date of acceleration. Upon such declaration, such principal amount (or specified amount) and interest, if any, shall be due and payable immediately. If an Event of Default specified in Section 6.01 (4) or (5) occurs and is continuing, (1) the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of the Securities of that series) of all of the Securities of that series then outstanding and (2) interest, if any, accrued to the date of such acceleration shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or Securityholders. The Holders of a majority in aggregate principal amount of the outstanding Securities of the series with respect to which an acceleration applies by notice to 25 the Trustee may rescind an acceleration and its consequences with respect to such series if all existing Events of Default (other than the non-payment of the principal of and accrued interest, if any, on Securities that have become due solely by such acceleration) with respect to Securities of that series have been cured or waived and if the rescission would not conflict with any judgment or decree. No such rescission shall affect any subsequent default or impair any right consequence thereon. Section 6.03. Other Remedies. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of the whole amount which then shall have become due and remain unpaid for principal or interest, if any, on the Securities of that series or to enforce the performance of any provision of the Securities of that series or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities of that series or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 6.04. Waiver of Existing Defaults. Subject to Section 9.02, the Holders of a majority in aggregate principal amount of the outstanding Securities of any series by notice to the Trustee may waive on behalf of the Holders of all the Securities of such series an existing Default or Event of Default and its consequences. When a Default or Event of Default is waived, it is cured and stops continuing. Section 6.05. Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Securities of any series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it, with respect to the Securities of such series. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture, that is unduly prejudicial to the rights of another Securityholder or that would involve the Trustee in personal liability. Section 6.06. Limitation of Suits. No Holder of any Security of any series shall have the right to pursue any remedy with respect to this Indenture or the Securities unless: 26 (1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of at least 25% in aggregate principal amount of the outstanding Securities of that series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer and provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the outstanding Securities of such series. A Securityholder of any series may not use this Indenture to prejudice the rights of another Securityholder of such series or to obtain a preference or priority over another Securityholder of such series, except in the manner herein provided and for the equal and ratable benefit of all Securityholders of such series. Section 6.07. Rights of Holders to Receive Payment and to Convert. Subject to the terms of the Securities of any series relating to subordination (as contemplated by Article Ten and Section 2.02) and notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and (subject to Section 2.13) interest, if any, on the Security, on or after the respective due dates with respect to such payments expressed in such Security, and, if applicable, to convert such Security on the terms and subject to the conditions applicable to Securities of such series, or to bring suit for the enforcement of any such payment on or after such respective dates or of such right to convert, if any, shall not be impaired or affected without the consent of the Holder. Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing with respect to the Securities of any series, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount which then shall have become due and remain unpaid for principal and interest, if any, on the Securities of such series. 27 Section 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, its creditors or its property and to collect and receive money, property or securities payable or deliverable on any such claims and to distribute the same. Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to the payment of items to which the Securities have been subordinated as contemplated by Article Ten and Section 2.02; Third: to the payment of amounts due and unpaid for principal and interest, if any, on the Securities in respect of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts which then shall have become due and payable on such Securities for principal and interest, respectively; and Fourth: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section, notice of which shall be mailed to each Securityholder by the Company at least 15 days before such record date. Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the outstanding Securities of any series. 28 ARTICLE SEVEN Trustee All the provisions of this Article Seven apply to the Trustee acting in all its appointed capacities pursuant to this Indenture unless any provision specifically applies to the Trustee only in its capacity as Trustee. Section 7.01. Duties of Trustee. (a) If an Event of Default with respect to Securities of any series has occurred and is continuing, the Trustee shall with respect to such series exercise such of the rights and powers vested in it by this Indenture with respect to such series and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) With respect to Securities of any series, except during the continuance of an Event of Default with respect to Securities of such series: (1) The Trustee need perform only those duties that are specifically set forth in this Indenture or the TIA and no others. (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee, however, shall, with respect to certificates or opinions which by any provision hereof are required to be provided to the Trustee, examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section. (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. 29 (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. Section 7.02. Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may consult with counsel or require an Officers' Certificate, an Opinion of Counsel, and/or an accountant's certificate. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers' Certificate, Opinion or accountant's certificate. (c) The Trustee may act through agents and counsel and shall not be responsible for the misconduct or negligence of any agent or counsel appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, must comply with Sections 7.10 and 7.11. Section 7.04. Trustee's Disclaimer. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities; it shall not be accountable for the Company's use of the proceeds from the Securities; and it shall not be responsible for any statement in the Indenture or the Securities other than its certificate of authentication. 30 Section 7.05. Notice of Defaults. If a Default occurs and is continuing with respect to Securities of any series and if it is known to a Trust Officer of the Trustee, the Trustee shall transmit by mail to each Securityholder or such series in the manner and to the extent provided in TIA (S) 313(c) notice of the Default within 90 days after its occurs or as soon as reasonably practicable thereafter. Except in the case of a default in payment of principal of or interest on any Security of such series (including default in the making of any mandatory sinking fund or mandatory repurchase payment), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders of such series. Section 7.06. Reports by Trustee to Holders. Within 60 days after each May 15 beginning with the May 15 following the date on which Securities are originally issued under this Indenture, the Trustee shall transmit by mail to each Securityholder in the manner and to the extent provided in TIA (S) 313(c) a brief report dated as of such May 15 that complies with TIA (S) 313(a) if such report is required by TIA (S) 313(a). The Trustee also shall comply with TIA (S) 313(b). A copy of each report at the time of its mailing to Securityholders shall be filed by the Company with the SEC and each stock exchange on which the Securities are listed. The Company will promptly notify the Trustee if and when the Securities of any series are listed on any stock exchange. Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee such compensation for its services as shall be agreed upon in a writing between the Company and the Trustee. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any loss or liability incurred by it arising out of or in connection with the acceptance or administration of this trust and its duties hereunder. The Trustee shall notify the Company promptly of any claims asserted against the Trustee for which it may seek indemnity. Failure of the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall have the right to elect to defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its 31 written consent, which consent shall not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of or interest on particular Securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(4) or (5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section shall survive the termination of this Indenture. Section 7.08. Replacement of Trustee. The Trustee may resign at any time with respect to Securities of one or more series by so notifying the Company. The Holders of a majority in aggregate principal amount of the outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the removed Trustee and may appoint a successor Trustee with the Company's consent. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. If the Trustee resigns or is removed, or if a vacancy exists in the office of the Trustee for any reason, with respect to the Securities of one or more series, the Company shall promptly appoint a successor Trustee or Trustees (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee (subject to its lien, if any, provided for in Section 7.07), the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee 32 under this Indenture. A successor Trustee shall mail notice of its succession to each Securityholder. If a successor Trustee with respect to Securities of any series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in aggregate principal amount of the outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee. Section 7.09. Successor Trustee by Merger, etc. If the Trustee consolidates with, mergers or converts into, or transfers all or substantially all of its corporate trust assets to, another corporation or national banking association, the successor corporation or national banking association without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee who satisfies the requirements of TIA (S) 310(a). The Trustee shall always have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. With respect to the Securities of each series, the Trustee shall comply with TIA (S) 310(b). In determining whether the Trustee has a conflicting interest as defined in TIA (S) 310(b) with respect to the Securities of any series, there shall be excluded this Indenture with respect to the Securities of any series other than that series. Nothing herein shall prevent the Trustee from filing with the SEC the application referred to in the second to last paragraph of TIA (S) 310(b). Section 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated. 33 ARTICLE EIGHT Discharge of Indenture Section 8.01. Termination of Company's Obligations. The Company may terminate all of its obligations under the Securities of any series and this Indenture with respect to the Securities of such series if either (1) all Securities of such series previously authenticated and delivered (other than destroyed, lost or stolen Securities which have been replaced or paid or Securities for whose payment money (or, if permitted by the terms of such Securities, securities) has theretofore been held in trust and thereafter repaid to the Company, as provided in Section 8.03) have been delivered to the Trustee for cancellation; or (2) (i) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations sufficient to pay the principal of and interest, if any, on all Securities of such series not theretofore cancelled or delivered to the Trustee for cancellation (other than destroyed, lost or stolen Securities which have been replaced or paid or Securities for whose payment money (or, if permitted by the terms of such Securities, securities) has theretofore been held in trust and thereafter repaid to the Company, as provided in Section 8.03) to maturity or redemption, as the case may be and (ii) the Company delivers to the Trustee an opinion of counsel to the effect that, based upon the Company's receipt from, or the publication by, the Internal Revenue Service of a ruling or a change in law, the holders of the Securities will not recognize income, gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount in the same manner and at the same times as would have been the case if such deposit, defeasance or discharge had not occurred. The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 7.07, 7.08 and 8.03 of this Indenture, however, shall survive until the Securities of such series are no longer outstanding. Thereafter, the Company's obligations in Sections 7.07 and 8.03 shall survive. Notwithstanding the satisfaction and discharge of this Indenture with respect to the Securities of any series, if money or U.S. Government Obligations shall have been deposited with the Trustee pursuant to clause (2) of the first paragraph of this Section, the obligations of the Trustee under Section 8.02 and the second sentence of Section 8.03 shall survive. After a deposit and if all other conditions thereto are met, the Trustee for the Securities of such series shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture with respect to such Securities, except for those surviving obligations specified above; provided, however, that the Trustee shall not be required to execute such instrument until the expiration of 90 days after the date of a deposit and that such instrument may be made subject to the condition that such deposit had been in compliance with any applicable terms of the Securities of such series relating to subordination (as contemplated by Article Ten and Section 2.02). 34 In order to have money available on a payment date to pay the principal of or interest, if any, on the Securities, the U.S. Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's opinion. Section 8.02. Application of Trust Fund. The Trustee shall hold in trust money and U.S. Government Obligations deposited with it pursuant to Section 8.01. Subject to any applicable terms of the Securities of any series relating to subordination (as contemplated by Article Ten and Section 2.02), the Trustee shall apply the deposited money and the money from the U.S. Government Obligations through the Paying Agent and in accordance with the provisions of the Securities of such series and this Indenture to the payment of principal of and interest, if any, on the Securities of such series for the payment of which such money or U.S. Government Obligations has been deposited with the Trustee. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 8.01 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of outstanding Securities. Section 8.03. Repayment to Company. The Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon written request any money or securities held by them for the payment of principal or interest, if any, that remains unclaimed for two years. After that, Holders entitled to the money or securities must look to the Company for payment unless an applicable abandoned property law designates another Person. ARTICLE NINE Amendments, Supplements and Waivers Section 9.01. Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities of any series without notice to or consent of any Securityholder: (1) to cure any ambiguity, defect or inconsistency; (2) to comply with Section 5.01; 35 (3) to establish the form or terms of Securities of any series as permitted by Sections 2.01 and 2.02; (4) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; (5) to add any additional Events of Default (and if such Events of Default are to be applicable to less than all series of Securities, stating that such Events of Default are expressly being included solely to be applicable to such series); (6) to change or eliminate any of the provisions of this Indenture, provided that, except as otherwise contemplated by Section 2.02(14), any such change or elimination shall become effective only when there is no Security outstanding of any series created prior thereto which is entitled to the benefit of such provision; (7) to add or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to provide for uncertificated Securities in addition to certificated Securities (so long as any "registration-required obligation" within the meaning of Section 163(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code") is in registered form for purposes of the Code); (8) to make any change that, in the opinion of the Board of Directors, does not materially adversely affect the rights of any Securityholder; or (9) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA. Section 9.02. With Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities of any series without notice to any Securityholder but with the written consent of the Holders of a majority in aggregate principal amount of the outstanding Securities of each series affected by such amendment or supplement. The Holders of a majority in aggregate principal amount of the outstanding Securities of any series may on behalf of the Holders of 36 all Securities of such series waive compliance by the Company with any provision of this Indenture or of Securities of such series without notice to any Securityholder. Without the consent of each Securityholder affected, however, the amendment, supplement or waiver, including a waiver pursuant to Section 6.04, may not: (1) reduce the amount of Securities of any series whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or extend the time for payment of interest on any Security (or, in the case of an Original Issue Discount Security, reduce the rate of accrual of original issue discount); (3) reduce the principal of (or any premium payable upon the redemption of) or extend the fixed maturity of any Security (or, in the case of an Original Issue Discount Security, reduce the portion of the principal amount that would be due and payable upon acceleration of the maturity thereof pursuant to Section 6.02); (4) change the amount or time of any payment required by any sinking fund provisions of the Securities of any series; (5) make any change that materially adversely affects the rights of a Holder to require the Company to purchase a Security in accordance with the terms thereof and this Indenture; (6) waive a default in the payment of the principal of or interest, if any, on any Security; or (7) make any Security payable in money or securities other than that stated in the Security. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed supplement, but it shall be sufficient if such consent approves the substance thereof. An amendment to or supplement of this Indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. 37 Section 9.03. Compliance with the Trust Indenture Act. Every amendment to or supplement of this Indenture or the Securities shall comply with the TIA as then in effect. Section 9.04. Revocation and Effect of Consents. A consent to an amendment, supplement, waiver or other action by a Holder of a Security shall bind the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. Any such Holder or subsequent Holder, however, may revoke the consent as to his Security or portion of a Security. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement, waiver or other action becomes effective. An amendment, supplement, waiver or other action shall become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in aggregate principal amount of the outstanding Securities of the relevant series. After an amendment, supplement or waiver becomes effective, it shall bind every Securityholder of each series of Securities so affected. Section 9.05. Notation on or Exchange of Securities. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Section 9.06. Trustee to Sign Amendments, etc. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article if the amendment, supplement or waiver does not adversely affect the rights, duties, immunities or liabilities of the Trustee. If it does, the Trustee may but need not sign it. The Company may not sign an amendment or supplement until the Board of Directors approves it. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. 38 ARTICLE TEN Subordination Section 10.01. Subordination Terms. The payment by the Company of the principal of, premium, if any, and interest on the Securities of any series shall be subordinated in the manner and to the extent provided in the Securities of such series, as contemplated by Sections 2.01 and 2.02. ARTICLE ELEVEN Miscellaneous Section 11.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of TIA (S)(S) 310 to 317, inclusive, through operation of TIA (S) 318(c), such imposed duties shall control. Section 11.02. Notices. Any notice or communication shall be sufficiently given if in writing and delivered in person or mailed by first-class mail addressed as follows: If to the Company: TCI Communications, Inc. 5619 DTC Parkway Englewood, Colorado 80111 Attention: Chief Financial Officer If to the Trustee: The Bank of New York 101 Barclay Street Floor 21W New York, New York 10286 Attention: Corporate Trustee Trustee Administration The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. 39 Any notice or communication mailed to a Securityholder shall be mailed to him by first-class mail, postage prepaid, at his address as it appears on the registration books of the Registrar and shall be sufficiently given to him if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. Except for a notice to the Trustee, which is deemed given only when received, if a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 11.03. Communication by Holders with Other Holders. Securityholders may communicate pursuant to TIA (S) 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA (S)312(c). Section 11.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent (including any covenants compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent (including any covenants compliance with which constitutes a condition precedent) have been complied with. Section 11.05. Statements Required in Certificate or Opinion. Each Officers' Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture (other than certificates provided pursuant to Section 4.03) shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; 40 (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. Section 11.06. When Treasury Securities Disregarded. In determining whether the Holders of the required aggregate principal amount of Securities of any series have concurred in any direction, waiver or consent, Securities of such series owned by the Company or by any Affiliate of the Company shall be disregarded and treated as not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities of such series which the Trustee actually knows are so owned shall be so disregarded. Section 11.07. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or a meeting of the Securityholders of all series or any series. The Registrar and Paying Agent may make reasonable rules for its functions. Section 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking institutions in the City of New York, New York, are not required to be open. If a specified date (including a date for giving notice) is a Legal Holiday, any action to be taken on such date pursuant to this Indenture or the Securities (including such conversion) may be taken on the next succeeding day that is not a Legal Holiday, and, to the extent applicable, no interest, or original issue discount, as the case may be, shall accrue for the intervening period. Section 11.09. Governing Law. The internal laws of the State of New York shall govern this Indenture and the Securities. 41 Section 11.10. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 11.11. No Recourse Against Others. No past, present or future director, officer, employee or stockholder, as such, of the Company or the Trustee or any successor of either thereof shall have any liability for any obligations of the Company or the Trustee under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation and all such liability is hereby waived and released. Such waiver and release are part of the consideration for the issue of the Securities. Section 11.12. Successors. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. Section 11.13. Duplicate Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 11.14. Table of Contents, Headings, Etc. The table of contents and the titles and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. Section 11.15. Acts of Holders. (a) Any direction, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee, the Company and any Agent, if made in the manner provided in this Section. 42 (b) The fact and date of the execution by any Person of any such instrument may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The ownership, principal amount and serial numbers of outstanding Securities held by any person, and the date of holding the same, shall be provided by the security register. (d) If the Company shall solicit from the Holders of any Securities any direction, consent, waiver or other authorization, the Company may at its option (but is not obligated to), by or pursuant to a resolution of the Board of Directors, fix in advance a record date for the determination of Holders of Securities entitled to give such direction, consent, waiver or other authorization. Notwithstanding TIA (S) 316(c), such record date shall be the record date specified in or pursuant to such resolution of the Board of Directors, which shall be a date not earlier than 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such direction, consent, waiver or other authorization may be given before or after such record date, but only the Holders of Securities of record at the close of business on such record date shall be deemed to be Holders for the purpose of determining whether Holders of the requisite proportion of outstanding Securities have authorized or agreed or consented to such direction, consent, waiver or other authorization, and for that purpose the outstanding Securities shall be computed as of such record date; provided that no such consent or other authorization by the Holders shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. (e) Any consent, waiver or other authorization by the Holder of any Security shall bind such Holder and every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security. Section 11.16 Assignment. The Company shall have the right at all times to assign any to its rights or obligations under this Indenture to a direct or indirect wholly owned Subsidiary of the Company; provided, that, in the event of any such assignment, the Company shall remain liable for all such obligations. 43 SIGNATURES Dated: TCI COMMUNICATIONS, INC. By:/s/ Gerald Sokol.Jr. ------------------------------- Title: Gerald Sokol.Jr. (SEAL) ATTEST: /s/ Mary M. McChesney - ------------------------------- Assistant Secretary Dated: THE BANK OF NEW YORK By: ___________________________________ Title: (SEAL) ATTEST: _____________________________________ Assistant Secretary 44 SIGNATURES Dated: TCI COMMUNICATIONS,INC. By: ____________________________ Title: (SEAL) ATTEST: _________________________________ Assistant Secretary Dated: THE BANK OF NEW YORK By: /s/ WALTER N. GITLIN ----------------------------- Title: WALTER N. GITLIN VICE PRESIDENT ATTEST: (SIGNATURE ILLEGIBLE) - --------------------------------- 44 EX-4.14 10 FORM OF THIRD SUPPLEMENTAL INDENTURE EXHIBIT 4.14 ________________________________________________________________________________ TCI COMMUNICATIONS, INC. AND THE BANK OF NEW YORK, Trustee ____________________________________________ THIRD SUPPLEMENTAL INDENTURE TO INDENTURE Dated as of __________, 199_ ____________________________________________ ____% Subordinated Deferrable Interest Notes due ___________, 20__ ________________________________________________________________________________ TABLE OF CONTENTS -----------------
Page ---- ARTICLE I DEFINITIONS Section 1.1. Definition of Terms.............................. 2 Section 1.2. Interpretation................................... 3 ARTICLE II GENERAL TERMS AND CONDITIONS OF THE NOTES Section 2.1. Designation and Principal Amount................... 3 Section 2.2. Maturity........................................... 3 Section 2.3. Form and Payment................................... 3 Section 2.4. Global Note........................................ 4 Section 2.5. Interest........................................... 5 ARTICLE III REDEMPTION OF THE NOTES Section 3.1. Special Event Redemption........................... 6 Section 3.2. Optional Redemption by Company..................... 6 Section 3.3. No Sinking Fund.................................... 7 ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD Section 4.1. Extension of Interest Payment Period............. 7 Section 4.2. Notice of Extension.............................. 7 ARTICLE V EXPENSES Section 5.1. Payment of Expenses.............................. 8 ARTICLE VI SUBORDINATION Section 6.1. Agreement to Subordinate......................... 9 Section 6.2. Default on Senior Indebtedness................... 9
Section 6.3. Liquidation; Dissolution; Bankruptcy............. 10 Section 6.4. Subrogation...................................... 11 Section 6.5. Trustee to Effectuate Subordination.............. 12 Section 6.6. Notice by the Company............................ 12 Section 6.7. Rights of the Trustee; Holders of Senior Indebtedness..................................... 13 Section 6.8. Subordination May Not Be Impaired................ 13 ARTICLE VII COVENANT TO LIST ON EXCHANGE Section 7.1. Listing on Exchange.............................. 14 ARTICLE VIII FORM OF NOTE Section 8.1. Form of Note..................................... 14 ARTICLE IX ORIGINAL ISSUE OF NOTES Section 9.1. Original Issue of Notes.......................... 22 ARTICLE X CERTAIN COVENANTS Section 10.1. Limitation on Dividends and Other Payments....... 23 Section 10.2. Covenants as to the Trust........................ 23 ARTICLE XI CERTAIN EVENTS OF DEFAULT Section 11.1. Additional Events of Default..................... 24 Section 11.2. Waiver of Existing Defaults...................... 24 ARTICLE XII MISCELLANEOUS Section 12.1. Supplemental Indenture Incorporated Into Indenture....................................... 24 Section 12.2. Trustee Not Responsible for Recitals; Disclaimer...................................... 25 Section 12.3. Governing Law................................... 25 Section 12.4. Separability.................................... 25 ii
Section 12.5. Counterparts..................................... 25 Section 12.6. Acknowledgment of Rights of Holders of Preferred Securities....................................... 25
iii THIS THIRD SUPPLEMENTAL INDENTURE, dated as of __________, 199_ (this "Third Supplemental Indenture"), between TCI Communications, Inc., a Delaware corporation (the "Company"), and The Bank of New York, a New York banking corporation, not in its individual capacity but solely as trustee (the "Trustee"), under the Indenture dated as of January 29, 1996 between the Company and the Trustee (the "Indenture"). W I T N E S S E T H: WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide for the future issuance of the Company's unsecured subordinated Securities, to be issued from time to time in one or more series as might be determined by the Company in accordance with the Indenture, in an unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture; and WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its ____% Subordinated Deferrable Interest Notes due ____________, 20__ (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 Third Supplemental Indenture; and WHEREAS, TCI Communications Financing III, 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 $___________ 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 Third Supplemental Indenture, and all requirements necessary to make this Third 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 Third 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: 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 Third Supplemental Indenture, (b) a term defined anywhere in this Third Supplemental Indenture has the same meaning throughout and (c) the following terms have the meanings given to them in the Declaration (including, without limitation, Annex I thereto): Clearing Agency Delaware Trustee No Recognition Opinion Preferred Securities Guarantee Preferred Security Certificate Pricing Agreement Pro Rata Property Trustee Regular Trustee Special Event Tax Event Tax Event Opinion 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 III, a Delaware business trust, dated as of ___________, 199_. "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 2 deferred purchase price of property, all conditional sale obligations of the Company and all obligations of such obligor under any title retention agreement (but excluding trade accounts payable arising in the 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 Third 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 Third Supplemental Indenture as a whole. References to Articles and Sections are to the Articles and Sections of this Third Supplemental Indenture. The headings to the Articles and Sections are for convenience of reference and shall not affect the meaning or interpretation of this Third 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 ___________, 20__." The aggregate principal amount of Notes which may be authenticated and delivered under the Indenture is limited to $__________ (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 __________, 20__. 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 3 interest on the Notes issued in certificated form will be payable, the transfer of such Notes will be registrable and such Notes will be exchangeable for Notes bearing identical terms and provisions at the office or agency of the Trustee in New York, New York, provided, however, 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 Third Supplemental Indenture. Payments on the Notes issued as a global Note will be made to DTC (or a successor Clearing Agency); and (b) If any Preferred Securities are held in certificated form (i.e., not in book entry form), Notes in certificated form may be presented to the Trustee by the Property Trustee and any Preferred Security Certificate which represents Preferred Securities (other than Preferred Securities held by DTC (or a successor Clearing Agency) or its nominee) ("Non Book-Entry Preferred Securities") will be deemed to represent beneficial interests in Notes in certificated form presented to the Trustee by the Property Trustee having an aggregate principal amount equal to the aggregate stated liquidation amount of the Non Book-Entry Preferred Securities until such Preferred Security Certificates are presented to the Registrar for transfer or reissuance, at which time such Preferred Security Certificates will be canceled and a Note, registered in the name of the holder of such Preferred Security Certificate or the transferee of the holder of such Preferred Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate stated liquidation amount of the Preferred Security Certificate canceled, will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Indenture and this Third Supplemental Indenture. On issue of such Notes, Notes in certificated form with an equivalent aggregate principal amount that 4 were presented by the Property Trustee to the Trustee will be deemed to have been canceled. Section 2.5. Interest. (a) Each Note will bear interest at the rate of ____% 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 __________, 199_, 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. 5 ARTICLE III REDEMPTION OF THE NOTES Section 3.1. Special Event Redemption. If a Tax Event has occurred and is continuing and: (a) the Company has received a Redemption Tax Opinion; or (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 __________, 200_, 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 6 redemption or at such earlier time as the Company determines and specifies in the notice of redemption, provided the Company shall deposit with the Trustee an amount sufficient to pay the Optional Redemption Price by 11:00 a.m. on the date such Optional Redemption Price is to be paid. (b) If a partial redemption of the Notes would result in the delisting of the Preferred Securities issued by the Trust from any national securities exchange or other organization on which the Preferred Securities are then listed, the Company shall not be permitted to effect such partial redemption and may only redeem the Notes in whole. 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 7 such Distributions to the New York Stock Exchange or other applicable self- regulatory organization or to holders of the Preferred Securities, but in any event at least one Business Day before such record date. (b) If the Property Trustee is not the only Holder of the Notes at the time the Company selects an Extended Interest Payment Period, the Company shall give the Holders of the Notes and the Trustee written notice of its selection of such Extended Interest Payment Period ten (10) Business Days before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the date the Company is required to give notice of the record or payment date of such 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); 8 (c) be primarily liable for any indemnification obligations arising with respect to the Declaration; (d) pay any and all taxes, duties, assessments or governmental charges of whatever nature (other than United States withholding taxes attributable to the Trust or its assets) imposed on the Trust or its assets and all liabilities, costs and expenses of the Trust with respect to such taxes, duties, assessments or governmental charges; and (e) pay any and all fees and expenses related to the enforcement by the Property Trustee of the rights of the holders of the Preferred Securities. ARTICLE VI SUBORDINATION Section 6.1. Agreement to Subordinate. The Company covenants and agrees, and each holder of Notes issued hereunder by such holder's acceptance thereof likewise covenants and agrees, that all Notes shall be issued subject to the provisions of this Article VI; and each holder of a Note, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions. The payment by the Company of the principal of, premium, if any, and interest on all Notes issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full of all Senior Indebtedness, whether outstanding at the date of this Third 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. 9 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 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 10 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 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 Third 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 11 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 Third 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 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 as 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 Third 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 12 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. 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 Third 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 Third Supplemental Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with. 13 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 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 14 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.] 15 No. $ CUSIP No. TCI COMMUNICATIONS, INC. _____% SUBORDINATED DEFERRABLE INTEREST NOTE DUE ____________, 20__ 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 ___________, 20__, and to pay interest on said principal sum from ___________, 199_, or from the most recent interest payment date (each such date, an "Interest Payment Date") to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 31, June 30, September 30 and December 31 of each year, commencing ____________, 199_, at the rate of ____% per annum until the principal hereof shall have become due and payable, and on any overdue principal and premium, if any, and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest, 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, 16 notice whereof shall be given to the registered Holders of the Notes not less 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] Attest: 17 By Name: Title: 18 (FORM OF CERTIFICATE OF AUTHENTICATION) Date: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK as Trustee By Authorized Signatory (FORM OF REVERSE OF NOTE) This Note is one of a duly authorized series of Securities of the Company designated its "____% Subordinated Deferrable Interest Notes due _______, 20__" (herein sometimes referred to as the "Notes"), issued under and pursuant to an Indenture dated as of January 29, 1996, duly executed and delivered between the Company and The Bank of New York, not in its individual capacity but solely as trustee (the "Trustee"), as supplemented by a Third Supplemental Indenture dated as of ____________, 199_, 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. 19 The Notes are general unsecured obligations of the Company and are limited (except as otherwise provided in the Indenture) to $___________ million in aggregate principal amount. 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 ____________, 200_ (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 20 permitting the Holders of a majority in aggregate principal amount of the Securities of any series at the time outstanding affected thereby, on behalf of all of the Holders of the Securities of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or interest, if any, on any of the Securities of such series. Any such consent or waiver by the 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 21 notwithstanding any notice of ownership or writing hereon made by anyone other than the Registrar) for the purpose of receiving payment of principal of and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any Paying Agent nor the Registrar shall be affected by any notice to the contrary. 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 Third 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. 22 ARTICLE X CERTAIN COVENANTS The following covenants shall apply to the Notes (but not with respect to any other series of Securities), and are in addition to the covenants set forth in Article Four of the Indenture. Section 10.1. Limitation on Dividends and Other Payments. If (i) there shall have occurred any event that constitutes an Event of Default or (ii) the Company shall be in default with respect to its payment of any obligations under the Preferred Securities Guarantee, then (a) the Company shall not declare or pay any dividend on, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company which rank pari passu with or junior to the Notes, and (c) the Company shall not make any guarantee payments with respect to the foregoing (other than pursuant to the Preferred Securities Guarantee). If the Company shall have given notice of its election to defer payments of interest on the Notes by extending the interest payment period as provided in Article IV and such period, or any extension thereof, shall be continuing, then (i) the Company shall not declare or pay any dividend or, make any distributions with respect to, or redeem, purchase or make a liquidation payment with respect to, any of its capital stock, (ii) the Company shall not make any payment of interest, principal, premium, if any, on or repay, repurchase or redeem any debt securities issued by the Company which rank pari passu with or junior to the Notes, and (iii) the Company shall not make any guarantee payments with respect to the foregoing (other than pursuant to the Preferred Securities Guarantee). Notwithstanding the foregoing restrictions, nothing in this Section 10.1 shall prevent the Company, in any event, from making dividend, redemption, liquidation or guarantee payments on capital stock, or interest, principal, redemption or guarantee payments on debt securities issued by the Company ranking pari passu with or junior to the Notes, where the payment is made by way of (i) securities (including capital stock) that rank junior to the securities on which such payment is being made or (ii) securities (including capital stock) of Tele-Communications, Inc., a Delaware corporation (or any successor of such corporation). Section 10.2. Covenants as to the Trust. For so long as the Trust Securities remain outstanding, the Company will (i) maintain 100% direct or indirect ownership of the Common Securities; provided, however, that any permitted successor of the Company under the Indenture may succeed to the Company's ownership of the Common Securities, (ii) not to cause, as sponsor of the Trust, or to permit, as the holder of the Common Securities of the Trust, the termination, dissolution or winding-up of the Trust, except in connection with a 23 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 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 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 Third 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 Third Supplemental Indenture, are effective with respect to 24 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 Third 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 Third Supplemental Indenture. Section 12.3. Governing Law. This Third 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 Third 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 Third Supplemental Indenture or of the Notes, but this Third 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 Third Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Section 12.6. Acknowledgment of Rights of Holders of Preferred Securities. The Company hereby acknowledges the right of each holder of Preferred Securities, upon and during the continuance of an Event of Default under the Declaration that results from the failure of the Company to pay principal of or interest on the Notes when due, to directly institute proceedings against the Company to obtain payment to such holder of an amount equal to the principal or interest so defaulted on with respect to Notes in a principal amount equal to the aggregate liquidation amount of the Preferred Securities owned by such holder. 25 IN WITNESS WHEREOF, the parties hereto have caused this Third 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 ___________________________ Name: Title: Attest: __________________________ Title: THE BANK OF NEW YORK, as Trustee By:___________________________ Name: Title: Attest:___________________________ Title: 26 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 ) 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 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 27 EX-4.17 11 FORM OF GUARANTEE AGREEMENT - FIN. V (PREFERRED) EXHIBIT 4.17 ==================================== PREFERRED SECURITIES GUARANTEE AGREEMENT TCI Communications, Inc. Dated as of _________, 199_ ==================================== TABLE OF CONTENTS -----------------
Page ---- 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 by the Preferred Guarantee Trustee................................................ 5 ---------------------------------- 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.............. 11 -------------------------------------------------------------------- ARTICLE V GUARANTEE SECTION 5.1 Guarantee......................................................................... 12 --------- SECTION 5.2 Waiver of Notice and Demand....................................................... 12 --------------------------- SECTION 5.3 Obligations Not Affected.......................................................... 13 ------------------------ SECTION 5.4 Rights of Holders................................................................. 14 -----------------
Page ---- SECTION 5.5 Guarantee of Payment.............................................................. 14 -------------------- SECTION 5.6 Subrogation....................................................................... 14 ----------- SECTION 5.7 Independent Obligations........................................................... 14 ----------------------- ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION 6.1 Limitation of Transactions........................................................ 15 -------------------------- SECTION 6.2 Ranking........................................................................... 15 ------- 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............................................................ 17 ---------------------- SECTION 9.2 Amendments........................................................................ 17 ---------- SECTION 9.3 Notices........................................................................... 18 ------- SECTION 9.4 Benefit........................................................................... 18 ------- SECTION 9.5 Governing Law..................................................................... 19 ------------- SECTION 9.6 No Recourse Against Certain Persons............................................... 19 -----------------------------------
ii PREFERRED SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as of _________, 199_, 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 V, a Delaware statutory business trust (the "Issuer"). WITNESSETH: ----------- WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of _________, 199_, among the trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof ___________ 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 Prefer red Securities Guarantee, to pay to the Holders of the Preferred Securities the Guarantee Pay ments (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 Secur ities 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. 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 "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 distribu tion 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 January 29, 1996, among --------- the Guarantor and The Bank of New York, as trustee, and the _______ 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. "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. 3 "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 Pre ferred 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 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. "Subordinated Notes" means the series of subordinated debt securities ------------------ of the Guarantor, designated the ____% Subordinated Deferrable Interest Notes due ________, 20__, 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. 4 "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 Sections 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. (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. 5 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 Pre ferred Securities, notices of all Events of Default known to the Preferred Guarantee Trustee, unless such defaults have been cured before the giving of such notice; provided, that the Preferred Guarantee -------- Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers of the Preferred Guarantee Trustee in good faith 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. 6 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. (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: 7 (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 conform ing 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, 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 Pre ferred 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. 8 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 evi dence 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 re quest, shall be promptly delivered by the Guarantor. (iv) The Preferred Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (or any rerecording, refiling or reregis tration 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 coun sel 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 -------- 9 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 attor neys, 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. (ix) Any action taken by the Preferred Guarantee Trustee or its agents hereun der 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 Guaran tee 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. 10 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 responsi bility 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: (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. 11 (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 resig nation. The Preferred Guarantee Trustee may resign from office (without need for prior or subse quent accounting) by an instrument in writing executed by the Preferred Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Guarantee Trustee. (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 Guaran tor 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. 12 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; (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. 13 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 Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce its rights under this Preferred Securities Guarantee, without first insti tuting 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 14 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 de clare or pay any dividend on, or make any distribution with respect to, or redeem, purchase, ac quire 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 by the Guarantor which rank pari passu with or junior to the Subordinated Notes and (c) the Guarantor shall not make any guarantee payments with respect to any of the foregoing. (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) de claring or paying any dividend on, or making any distribution with respect to, or redeeming or making a liquidation or guarantee 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, repaying or redeeming, or making any guarantee payment with respect to 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 subsidiary or Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock. 15 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. Notwith standing 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. (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. 16 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, ac tion, 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 authorized in Section 8.2(a). (c) The provisions of this Section 8.2 shall survive the termination of this Preferred Securities Guarantee. 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. 17 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. 5619 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. 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. 18 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. 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: 19 EX-4.18 12 FORM OF GUARANTEE AGREEMENT - FIN. VI (PREFERRED) EXHIBIT 4.18 ==================================== PREFERRED SECURITIES GUARANTEE AGREEMENT TCI Communications, Inc. Dated as of _________, 199_ ==================================== TABLE OF CONTENTS -----------------
Page ---- 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.............................5 ------------------------------------------ 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..11 -------------------------------------------------------------------- ARTICLE V GUARANTEE SECTION 5.1 Guarantee.............................................................12 --------- SECTION 5.2 Waiver of Notice and Demand...........................................12 --------------------------- SECTION 5.3 Obligations Not Affected..............................................13 ------------------------ SECTION 5.4 Rights of Holders.....................................................14 -----------------
Page ---- SECTION 5.5 Guarantee of Payment..................................................14 -------------------- SECTION 5.6 Subrogation...........................................................14 ----------- SECTION 5.7 Independent Obligations...............................................14 ----------------------- ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION 6.1 Limitation of Transactions............................................15 -------------------------- SECTION 6.2 Ranking...............................................................15 ------- 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................................................17 ---------------------- SECTION 9.2 Amendments............................................................17 ---------- SECTION 9.3 Notices...............................................................18 ------- SECTION 9.4 Benefit...............................................................18 ------- SECTION 9.5 Governing Law.........................................................19 ------------- SECTION 9.6 No Recourse Against Certain Persons...................................19 -----------------------------------
ii PREFERRED SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as of _________, 199_, 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 VI, a Delaware statutory business trust (the "Issuer"). WITNESSETH: ----------- WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of _________, 199_, among the trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof ___________ 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 Secur ities 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. 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 "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 distribu tion 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 January 29, 1996, among --------- the Guarantor and The Bank of New York, as trustee, and the _______ 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. "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. 3 "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 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. "Subordinated Notes" means the series of subordinated debt securities ------------------ of the Guarantor, designated the ____% Subordinated Deferrable Interest Notes due ________, 20__, 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. 4 "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 Sections 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. (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. 5 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 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. 6 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. (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: 7 (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 conform ing 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, 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. 8 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 evi dence 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. (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 reregis tration 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 9 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 attor neys, 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. (ix) Any action taken by the Preferred Guarantee Trustee or its agents hereun der 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 Guaran tee 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. 10 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: (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. 11 (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 subse quent accounting) by an instrument in writing executed by the Preferred Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Preferred Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Preferred Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Guarantee Trustee. (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. 12 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; (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. 13 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 Preferred Securities may institute a legal proceeding directly against the Guarantor to enforce its rights under this Preferred Securities Guarantee, without first insti tuting 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 14 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 de clare or pay any dividend on, or make any distribution with respect to, or redeem, purchase, ac quire 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 by the Guarantor which rank pari passu with or junior to the Subordinated Notes and (c) the Guarantor shall not make any guarantee payments with respect to any of the foregoing. (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) de claring or paying any dividend on, or making any distribution with respect to, or redeeming or making a liquidation or guarantee 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, repaying or redeeming, or making any guarantee payment with respect to 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 subsidiary or Affiliate of the Guarantor, and (iii) senior to the Guarantor's common stock. 15 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. (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. 16 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. 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. 17 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. 5619 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. 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. 18 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. 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: 19 EX-4.21 13 FORM OF GUARANTEE AGREEMENT - FIN. V (COMMON) EXHIBIT 4.21 ___________________________________ COMMON SECURITIES GUARANTEE AGREEMENT TCI Communications, Inc. Dated as of _________, 199_ ___________________________________ TABLE OF CONTENTS -----------------
Page ---- 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..................................................... 7 ------- SECTION 5.4 Benefit..................................................... 7 ------- SECTION 5.5 Governing Law............................................... 8 -------------
COMMON SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated as of __________, 199_, 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 V, a Delaware business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of __________, 199_, among the Trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof ________ 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: (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 of 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- "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); -3- (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 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 -4- 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, 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, (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 Guarantor shall not make any guarantee payments with respect to any of the foregoing. (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 or making a liquidation or guarantee 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 redeeming, or making any guarantee payment with respect to 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 -5- 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. 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. -6- 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): c/o TCI Communications Financing V Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 Attention: Stephen M. Brett (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. -7- 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. This Common Securities Guarantee is executed as of the day and year first above written. TCI COMMUNICATIONS, INC. By:________________________________ Name: Title: -8- EX-4.22 14 FORM OF GUARNATEE AGREEMENT - FIN. VI (COMMON) EXHIBIT 4.22 ______________________________ COMMON SECURITIES GUARANTEE AGREEMENT TCI Communications, Inc. Dated as of _________, 199_ ______________________________ TABLE OF CONTENTS ----------------- Page ---- 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.............................................. 7 ------- SECTION 5.4 Benefit.............................................. 7 ------- SECTION 5.5 Governing Law........................................ 8 ------------- COMMON SECURITIES GUARANTEE AGREEMENT This GUARANTEE AGREEMENT (this "Common Securities Guarantee"), dated as of __________, 199_, 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 VI, a Delaware business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of __________, 199_, among the Trustees of the Issuer named therein, the Guarantor, as sponsor, and the holders from time to time of undivided beneficial interests in the assets of the Issuer, the Issuer is issuing on the date hereof ________ 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: (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 of 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- "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); -3- (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 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 -4- 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, 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, (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 Guarantor shall not make any guarantee payments with respect to any of the foregoing. (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 or making a liquidation or guarantee 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 redeeming, or making any guarantee payment with respect to 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 -5- 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. 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. -6- 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): c/o TCI Communications Financing VI Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 Attention: Stephen M. Brett (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. -7- 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. This Common Securities Guarantee is executed as of the day and year first above written. TCI COMMUNICATIONS, INC. By:_____________________________________ Name: Title: -8- EX-12 15 CALCULATION OF RATIOS OF EARNINGS EXHIBIT 12 TCI COMMUNICATIONS, INC. AND CONSOLIDATED SUBSIDIARIES CALCULATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (AMOUNTS IN MILLIONS, EXCEPT FOR RATIOS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER YEAR ENDED DECEMBER 31, 30, --------------------------------------- ------------- 1995 1994(B) 1993(B) 1992(B) 1991(B) 1996 1995(B) ------ ------- ------- ------- ------- ---- ------- Earnings (losses) before income taxes............ $ (169) 226 164 47 (107) (353) (75) Add: Interest on debt......... 971 784 738 815 928 770 720 Interest portion of rentals................. 35 25 23 22 23 34 26 Amortization of debt expense................. 14 12 12 9 6 11 10 Distributions from and losses of less than 50%- owned affiliates with debt not guaranteed by TCIC.................... 33 (35) 23 (12) (28) 39 26 Minority interests in (earnings) losses of consolidated subsidiaries............ (11) 12 13 277 24 43 -- Elimination of preferred stock dividend requirements of consolidated subsidiaries to 50%- owned affiliates........ -- -- -- (250) (42) -- -- Preferred stock dividend requirements of 50%- owned affiliates, other than amounts to TCIC.... -- -- -- 175 23 -- -- ------ ----- ---- ----- ----- ---- --- Earnings available for fixed charges........... $ 873 1,024 973 1,083 827 544 707 ====== ===== ==== ===== ===== ==== === Fixed charges: Interest on debt: TCIC and consolidated subsidiaries............ 962 777 731 718 826 760 713 Less than 50%-owned affiliates with debt guaranteed by TCIC...... 9 7 -- -- -- 10 -- Elimination of interest of consolidated subsidiaries to 50%- owned affiliates........ -- -- -- (36) (47) -- 7 TCIC's proportionate share of interest of 50%-owned affiliates.... -- -- 7 133 149 -- -- ------ ----- ---- ----- ----- ---- --- 971 784 738 815 928 770 720 Interest portion of rentals................. 35 25 23 22 23 34 26 Amortization of debt expense................. 14 12 12 9 6 11 10 Preferred stock dividend requirements of consolidated subsidiaries (a)........ 10 10 14 281 61 96 7 Preferred stock dividend requirements of TCIC(a)................. -- -- 3 25 -- 12 -- Elimination of preferred stock dividend requirements of consolidated subsidiaries to 50%- owned affiliates........ -- -- -- (250) (42) -- -- Preferred stock dividend requirements of 50%- owned affiliates, other than amounts to TCIC.... -- -- -- 175 23 -- -- Capitalized interest..... 13 15 9 6 5 9 7 ------ ----- ---- ----- ----- ---- --- Total fixed charges...... $1,043 846 799 1,083 1,004 932 770 ====== ===== ==== ===== ===== ==== === Ratio of earnings to fixed charges........... -- 1.21 1.22 1.00 -- -- -- Deficiency............... $ (170) -- -- -- (177) (388) (63)
- -------- (a) Preferred Stock dividend requirements have been increased to an amount representing the pretax earnings which would be required to cover such dividend requirements. The effective income tax rate utilized for purposes of increasing preferred stock dividend requirements in 1993 has been adjusted to exclude the effect of the federal income tax rate change in the third quarter of 1993. (b) Amounts have been restated for the effect of the change in ownership percentages of methods of accounting for certain investments. TCI COMMUNICATIONS, INC. AND CONSOLIDATED SUBSIDIARIES CALCULATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (AMOUNTS IN MILLIONS, EXCEPT FOR RATIOS) (UNAUDITED) Fixed charges related to interest on debt of less than 50%-owned affiliates or unaffiliated persons guaranteed by TCIC have not been included in fixed charges as follows:
YEAR ENDED DECEMBER 31, 1995................................................................... 5 1994................................................................... 5 1993................................................................... 14 1992................................................................... 3 1991................................................................... 1 NINE MONTHS ENDED SEPTEMBER 30, 1996................................................................... 3 1995................................................................... 3
EX-23.1 16 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholder TCI Communications, Inc.: We consent to the incorporation by reference in the Registration Statement on Form S-3 of TCI Communications, Inc. of our reports, dated March 18, 1996, relating to the consolidated balance sheets of TCI Communications, Inc. and subsidiaries as of December 31, 1995 and 1994, and the related consolidated statements of operations, stockholder's(s') equity, and cash flows for each of the years in the three-year period ended December 31, 1995, and all related financial statement schedules, which reports appear in the December 31, 1995 Annual Report on Form 10-K of TCI Communications, Inc. and to the reference to our firm under the heading "Experts" in the registration statement. /s/ KPMG Peat Marwick LLP KPMG Peat Marwick LLP Denver, Colorado November 26, 1996 EX-23.2 17 CONSENT OF KPMG FINSTERBUSCH PICKENHAYN EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders of Tele-Communications International, Inc.: We consent to the incorporation by reference in the registration statement on Form S-3 of TCI Communications, Inc. of our report, dated March 24, 1995, relating to the combined balance sheets of Cablevision (A combination of certain cable television assets of Cablevision S.A., Televisora Belgrano S.A., Construred S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and the related combined statements of operations and deficit and cash flows for each of the years in the three-year period ended December 31, 1994, which report appears in the Current Report on Form 8-K of TCI Communications, Inc., dated April 20, 1995, as amended, and to the reference to our firm under the heading "Experts" in the registration statement. KPMG Finsterbusch Pickenhayn Sibille /s/ Juan Carlos Pickenhayn Juan Carlos Pickenhayn Partner Buenos Aires, Argentina November 26, 1996 EX-23.3 18 CONSENT OF PRICE WATERHOUSE, LLP EXHIBIT 23.3 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of the Registration Statement on Form S-3 of TCI Communications, Inc. of our report dated February 14, 1996, relating to the combined financial statements of VII Cable which appears in the Current Report on Form 8-K of Tele-Communications, Inc. dated June 19, 1996. We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/ Price Waterhouse LLP PRICE WATERHOUSE LLP San Jose, California November 26, 1996 EX-25.1 19 ELIGIBILITY OF B.O.N.Y. AS TRUSTEE FOR INDENTURE EXHIBIT 25.1 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ______________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ______________________ TCI COMMUNICATIONS, INC. (Exact name of obligor as specified in its charter) Delaware 84-0588868 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Subordinated Debt Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/STEPHEN J. GIURLANDO ------------------------------- Name: STEPHEN J. GIURLANDO Title: ASSISTANT VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.2 20 ELIGIBILIITY OF B.O.N.Y -- FINANCING III EXHIBIT 25.2 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- TCI COMMUNICATIONS FINANCING III (Exact name of obligor as specified in its charter) Delaware 84-6289177 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Preferred Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/STEPHEN J. GIURLANDO --------------------------- Name: STEPHEN J. GIURLANDO Title: ASSISTANT VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.3 21 ELIGIBILITY OF B.O.N.Y. -- FINANCING IV EXHIBIT 25.3 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ______________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ______________________ TCI COMMUNICATIONS FINANCING IV (Exact name of obligor as specified in its charter) Delaware 84-6289178 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Preferred Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the trustee, describe each such affiliation. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/ STEPHEN J. GIURLANDO ------------------------------ Name: STEPHEN J. GIURLANDO Title: ASSISTANT VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.4 22 ELIGIBILITY OF B.O.N.Y. -- FINANCING V EXHIBIT 25.4 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [__] ______________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ______________________ TCI COMMUNICATIONS FINANCING V (Exact name of obligor as specified in its charter) Delaware Applied For (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Preferred Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/ WALTER N. GITLIN ------------------------- NAME: WALTER N. GITLIN TITLE: VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.5 23 ELIGIBILITY OF B.O.N.Y. -- FINANCING VI EXHIBIT 25.5 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- TCI COMMUNICATIONS FINANCING VI (Exact name of obligor as specified in its charter) Delaware Applied For (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ---------------------- Preferred Securities (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/WALTER N. GILTIN ------------------------- Name: WALTER N. GITLIN Title: VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.6 24 ELIGIBILITY OF B.O.N.Y. -- GUARANTEE FINANCING III EXHIBIT 25.6 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- TCI COMMUNICATIONS, INC. (Exact name of obligor as specified in its charter) Delaware 84-0588868 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Guarantee of Preferred Securities of TCI Communications Financing III (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/WALTER N. GILTIN -------------------------- Name: WALTER N. GITLIN Title: VICE PRESIDENT -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.7 25 ELIGIBILITY OF B.O.N.Y. -- GUARANTEE FINANCING IV EXHIBIT 25.7 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ______________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ______________________ TCI COMMUNICATIONS, INC. (Exact name of obligor as specified in its charter) Delaware 84-0588868 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Guarantee of Preferred Securities of TCI Communications Financing IV (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/PAUL J. SCHMALZEL -------------------------- Name: PAUL J. SCHMALZEL Title: ASSISTANT TREASURER -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.8 26 ELIGIBILITY OF B.O.N.Y. -- GUARANTEE FINANCING V EXHIBIT 25.8 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ---------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ---------------------- TCI COMMUNICATIONS, INC. (Exact name of obligor as specified in its charter) Delaware 84-0588868 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ---------------------- Guarantee of Preferred Securities of TCI Communications Financing V (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T- 1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/PAUL J. SCHMALZEL ------------------------- Name: PAUL J. SCHMALZEL Title: ASSISTANT TREASURER -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- EX-25.9 27 ELIGIBILITY OF B.O.N.Y. -- GUARANTEE FINANCING VI EXHIBIT 25.9 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| ______________________ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) 48 Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) ______________________ TCI COMMUNICATIONS, INC. (Exact name of obligor as specified in its charter) Delaware 84-0588868 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (Address of principal executive offices) (Zip code) ______________________ Guarantee of Preferred Securities of TCI Communications Financing VI (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. (See Note on page 3.) 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A- 29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE COMMISSION'S RULES OF PRACTICE. 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) -2- 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33- 44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. NOTE Inasmuch as this Form T-1 is filed prior to the ascertainment by the Trustee of all facts on which to base a responsive answer to Item 2, the answer to said Item is based on incomplete information. Item 2 may, however, be considered as correct unless amended by an amendment to this Form T-1. -3- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of November, 1996. THE BANK OF NEW YORK By: /S/ PAUL J. SCHMALZEL --------------------------- Name: PAUL J. SCHMALZEL Title: ASSISTANT TREASURER -4- Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business March 31, 1996, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands Cash and balances due from depos- itory institutions: Noninterest-bearing balances and currency and coin...................... $ 2,461,550 Interest-bearing balances.............. 835,563 Securities: Held-to-maturity securities............ 802,064 Available-for-sale securities.......... 2,051,263 Federal funds sold in domestic offices of the bank: Federal funds sold....................... 3,885,475 Loans and lease financing receivables: Loans and leases, net of unearned income .............................. 27,820,159 LESS: Allowance for loan and lease losses ........................ 509,817 LESS: Allocated transfer risk reserve.............................. 1,000 Loans and leases, net of unearned income, allowance, and reserve....... 27,309,342 Assets held in trading accounts.......... 837,118 Premises and fixed assets (including capitalized leases).................... 614,567 Other real estate owned.................. 51,631 Investments in unconsolidated subsidiaries and associated companies.............................. 225,158 Customers' liability to this bank on acceptances outstanding................ 800,375 Intangible assets........................ 436,668 Other assets............................. 1,247,908 ----------- Total assets............................. $41,558,682 =========== LIABILITIES Deposits: In domestic offices.................... $18,851,327 Noninterest-bearing.................... 7,102,645 Interest-bearing....................... 11,748,682 In foreign offices, Edge and Agreement subsidiaries, and IBFs....... 10,965,604 Noninterest-bearing.................... 37,855 Interest-bearing....................... 10,927,749 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal funds purchased................ 1,224,886 Securities sold under agreements to repurchase........................ 29,728 Demand notes issued to the U.S. Treasury............................... 118,870 Trading liabilities...................... 673,944 Other borrowed money: With original maturity of one year or less.............................. 2,713,248 With original maturity of more than one year............................. 20,780 Bank's liability on acceptances exe- cuted and outstanding.................. 803,292 Subordinated notes and debentures........ 1,022,860 Other liabilities........................ 1,590,564 ----------- Total liabilities........................ 38,015,103 ----------- EQUITY CAPITAL Common stock............................. 942,284 Surplus.................................. 525,666 Undivided profits and capital reserves............................... 2,078,197 Net unrealized holding gains (losses) on available-for-sale securities............................. 3,197 Cumulative foreign currency translation adjustments............................ ( 5,765) ----------- Total equity capital..................... 3,543,579 ----------- Total liabilities and equity capital................................ $41,558,682 ===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot } Thomas A. Renyi } Directors Alan R. Griffith } - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----