(..continued)
EXHIBIT 4B
___________________________________
AMENDED AND RESTATED DECLARATION
OF TRUST
U S WEST FINANCING II
Dated as of October 24, 1996
____________________________________
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application 9
SECTION 2.2 Lists of Holders of Securities 10
SECTION 2.3 Reports by the Property Trustee 10
SECTION 2.4 Periodic Reports to Property Trustee 10
SECTION 2.5 Evidence of Compliance with Conditions
Precedent 11
SECTION 2.6 Events of Default; Waiver 11
SECTION 2-7 Event of Default; Notice 13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name 14
SECTION 3.2 Office 14
SECTION 3.3 Purpose 14
SECTION 3.4 Authority 15
SECTION 3.5 Title to Property of the Trust 15
SECTION 3.6 Powers and Duties of the Regular Trustees 15
SECTION 3.7 Prohibition of actions by the Trust and the
Trustees 19
SECTION 3.8 Powers and Duties of the Property Trustee 21
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee 23
SECTION 3.10 Certain Rights of Property Trustee 26
SECTION 3.11 Delaware Trustee 30
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 31
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities 33
SECTION 4.2 Responsibilities of the Sponsor. 34
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees 34
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 38
SECTION 5.7 Vacancies among Trustees 40
SECTION 5.8 Effect of Vacancies 40
SECTION 5.9 Meetings 40
SECTION 5.10 Delegation of Power 41
RTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions 41
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities 42
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust 43
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities 45
SECTION 9.2 Transfer of Certificates 45
SECTION 9.3 Deemed Security Holders 46
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 Certificates. 48
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability 49
SECTION 10.2 Exculpation 50
SECTION 10.3 Fiduciary Duty 50
SECTION 10.4 Indemnification 52
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 55
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments 55
SECTION 12.2 Meetings of the Holders of Securities;
Action by Written consent. 57
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
SECTION 13.1 Representations and Warranties of Property
Trustee. 60
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices 62
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
CROSS-REFERENCE TABLE*
Section of Trust Indenture
Act of 1939, as amended Section of Declaration
- -------------------------- ----------------------
310(a) 5.3(a)
310(b) 5.3(c)
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(f) Inapplicable
315(a) 3.9(b)
315(b) 2.8
315(c) 3.9(a)
315(d) 3.9(a)
316(a) Exhibit A, 2.6
316(c) 3.6(e)
_______________
<FN>
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or provisions.
</FN>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
U S WEST FINANCING II
October 24, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of October 24, 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"), U S WEST,
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;
WHEREAS, certain of the Trustees and the Sponsor established a trust (the
"Trust") under the Delaware Business Trust Act pursuant to a Declaration of
Trust, dated as of March 1, 1995 (the "Original Declaration") and a
Certificate of Trust filed with the Secretary of State of Delaware on March 1,
1995, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures of the Debenture Issuer
and the Debenture Guarantee of the Sponsor endorsed thereon;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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 Amended and Restated Declaration of Trust as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Exhibits are to Articles and Sections of 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;
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 or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a 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. Sections 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, 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 October 29, 1996.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be
dated as of October 29, 1996 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Annex II to Exhibit A.
"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.
"Debenture Guarantee" means the guarantee by the Sponsor of the
Debentures endorsed thereon.
"Debenture Issuer" means U S WEST Capital Funding, Inc., a
Colorado corporation.
"Debenture Trustee" means Norwest Bank Minnesota, National
Association, as trustee under the Indenture until a successor is appointed
thereunder and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee
pursuant to Section 3.6(c), a specimen certificate for such series of
Debentures being Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
"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.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"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 Debentures.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Indemnified Person" means
(a) any Trustee;
(b) any Affiliate of any Trustee;
(c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or
(d) any employee or agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of September 6, 1995
among the Debenture Issuer, U S WEST, Inc., a Colorado corporation, as
guarantor, and Norwest Bank Minnesota, National Association, as trustee, as
supplemented by a Second Supplemental Indenture dated as of October 31, 1995
among the Debenture Issuer, the Sponsor, as guarantor, and Norwest Bank
Minnesota, National Association, as trustee, and any indenture supplemental
thereto pursuant to which the Debentures and the Debenture Guarantee are to be
issued.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time or any successor legislation.
"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 Securities voting together as a single class or,
as the context may require, Holder(s) of Preferred Securities or Common
Securities voting separately as a class, who vote Securities of a relevant
class and 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
the Securities voted by such Holders represents more than 50% of the above
stated liquidation amount of all Securities of such class.
"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:
1. a statement that each officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
2. a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
3. 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
4. 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 to
be dated as of October 29, 1996 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 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 Annex I to Exhibit A.
"Pricing Agreement" means the pricing agreement between the Trust,
the Debenture 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).
"Purchase Agreement" means the Purchase Agreement for the offering
and sale of Preferred Securities in the form of Exhibit 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.
"Responsible Officer" means, with respect to the Property Trustee,
the chairman of the board of directors, the president, 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 Property Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"66-2/3% 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 Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities,
voting separately as a class, who vote Securities of a relevant class and 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 the Securities voted by such Holders represents 66-2/3% of the above-stated
liquidation amount of all Securities of such class.
"Special Event" has the meaning set forth in the terms of the
Securities.
"Sponsor" means U S WEST, Inc., a Delaware corporation or any
permitted successor thereof under the Indenture, in its capacity as sponsor of
the Trust.
"Successor Property Trustee" means a successor Trustee possessing
the qualifications to act as Property Trustee under Section 5.3(a).
"10% 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 Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities,
voting separately as a class, who vote Securities of a relevant class and 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 the Securities
voted by such Holders represents 10% of the above stated liquidation amount of
all Securities of such class.
"Treasury Regulations" means the income tax regulations, 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.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to
the extent applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which 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 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(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, the Debenture Issuer 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 none of the Sponsor, the Debenture Issuer or
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, the
Debenture Issuer 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
for 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 its capacity
as 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; and
(b) the Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the 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 Property Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee
Each of the Sponsor, the Debenture Issuer, and the Regular Trustees
on behalf of the Trust shall provide to the Property 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.
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 which 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.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences provided that if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in principal amount of the Debentures affected thereby (a "Super
Majority") to be waived, 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 which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
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 provided below in the proviso to this Section 2.6(b), the
Event of Default under the Declaration shall also be not 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 the proviso
to 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 Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding,
provided that, each Holder of Common Securities will be deemed to
have waived any Event 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. 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 any 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.
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 Debentures or in the payment of any sinking
fund installment established for the Debentures, 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 determine 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)(1) and 6.01(a)(2) 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 of.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "U S WEST Financing II", as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of 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 7800 East
Orchard Road, Englewood, Colorado 80111. On ten Business Days written notice
to the Holders of 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 Securities and use the proceeds from such sale to acquire the
Debentures and the Debenture 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.
It is the intention of all of the parties hereto that the Trust created
hereunder constitutes a "grantor trust" for federal income tax purposes under
the code, and all parties hereto, and the Holders of the Preferred Securities
by the purchase of the Preferred Securities will be deemed to, agree to treat
the Trust with such characterization. The provisions of this Agreement shall
be interpreted consistently with such characterization.
SECTION 3.4. Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures,
the Debenture Guarantee 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 and authority
and duty 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
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 Securities and Exchange Commission
(the "Commission") the registration statement on Form S-3 prepared by the
Sponsor in relation to the Preferred Securities, including any amendments
thereto prepared by the Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor as necessary in order to qualify or
register all or part of the Preferred Securities in any State in which the
Sponsor has determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application prepared by the Sponsor to
the New York Stock Exchange or any other national stock exchange or the Nasdaq
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 prepared by the Sponsor relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto prepared by the Sponsor; and
(v) execute and enter into the Purchase Agreement providing for the
sale of the Preferred Securities;
(c) to acquire the Debentures and the Debenture 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 Debentures and the Debenture Guarantee to be owned by and held of record
in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Common Securities;
(d) to give the Debenture Issuer, the Sponsor and the Property Trustee
prompt written notice of the occurrence of 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 for the
purposes of 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and 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;
(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(f), 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 to the Property Trustee required by Section
314(a)(4) of the Trust Indenture Act which certificate may be executed by any
Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying 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 Debenture Issuer of its election to defer
payments of interest on the Debentures 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 which 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 Securities or
to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, which 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 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 Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture 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 which is consistent with the purposes, functions and
characterization for federal income tax purposes of the Trust set out in
Section 3.3 and the Regular Trustees shall not take any action which is
inconsistent with the purposes, functions and characterization for federal
income tax purposes 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) Notwithstanding any provision herein to the contrary, the Trust
shall not, and the Trustees (including the Property Trustee) shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, 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 Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities;
or
(vii) other than as expressly provided in this Declaration and
Exhibit A hereto, (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under Section 6.06 of
the Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable or (D) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, unless the Trust shall have received an
opinion of counsel to the effect that such modification will not cause more
than an insubstantial risk that for United States federal income tax purposes
the Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures and the Debenture Guarantee 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 Debentures and the Debenture Guarantee
shall vest automatically in each Person who may hereafter be appointed as
Property Trustee as set forth in Section 5.6. Such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered;
(b) the Property Trustee shall not transfer its right, title and
interest in the Debentures and the Debenture Guarantee 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 bank
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
Debentures and Debenture Guarantee held by the Property Trustee, deposit such
funds into the Property Trustee Account and make payments to the Holders of
the Preferred Securities and 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 which is maintained with a
banking institution the rating on whose long term unsecured indebtedness is at
least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Debentures and the Debenture
Guarantee to Holders of Securities upon the Sponsor's election to dissolve the
Trust in accordance with Section 8.1(a)(v);
(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) no resignation of the Property Trustee shall be effective 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 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 Debentures and the Debenture
Guarantee 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 Debentures and the Debenture
Guarantee subject to the rights of the Holders pursuant to the terms of such
Securities;
(h) the Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and
any such Paying Agent shall comply with 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; and
(i) subject to this Section 3.8, the Property Trustee shall have none of
the 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 which is consistent with the purposes, functions and
characterization for federal income tax purposes of the Trust set forth in
Section 3.3 and the Property Trustee shall not take any action which is
inconsistent with the purposes, functions and characterization for federal
income tax purposes 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 or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration in Sections 2.2, 2.3, 2.7, 3.8, 3.9, 3.10 and 6.1
and in the terms of the Securities, and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Property Trustee shall exercise such of the rights and powers vested
in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of 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 Property Trustee shall be
determined solely by the express provisions of this Declaration in Sections
2.2, 2.3, 2.7, 3.8, 3.9, 3.10 and 6.1 and in the terms of the Securities, 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 at the time outstanding 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; and
(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 ground 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.
SECTION 3.10 Certain Rights of 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 act of the Sponsor or the Regular Trustees contemplated by this
Declaration shall be sufficiently evidenced by 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 and 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 (or any rerecording, refiling or
registration thereof);
(v) the Property Trustee may consult with counsel and the written 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 Sponsor or any of its Affiliates,
and may include any of its 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 of the Securities 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 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 and the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of 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, both of the Regular Trustees are authorized to execute on behalf of
the Trust any documents which the Regular Trustees have the power and
authority to execute pursuant to Section 3.6, provided that any listing
application prepared by the Sponsor referred to in Section 3.6(b)(iii) may be
executed by any Regular Trustee.
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 55 years from the Closing Date.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with
or into, or be replaced by a trust organized as such under the laws of any
State; provided, that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities; or
(B) substitutes for the Preferred 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 maturity;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures and the Sponsor expressly acknowledges
such trustee of the Successor Entity as the holder of the Debenture Guarantee;
(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 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 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; and
(c) notwithstanding Section 3.15(b), the Trust shall not
consolidate, amalgamate, merge with or into, or be replaced by any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger or replacement
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, at the same time as the Preferred Securities
are sold, in an amount equal to 3% of the capital of the Trust.
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:
5. 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;
6. 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
take 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;
7. 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;
8. 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
9. to negotiate the terms of the Purchase Agreement providing for the
sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially 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, however, that the number of Trustees
shall in no event be less than three (3); provided further that (1) one
Trustee, in the case of a natural person, shall be a person who is a resident
of the State of Delaware or that, if not a natural person, is an entity which
has its principal place of business in the State of Delaware, (2) there shall
be at least two Trustees who are employees or officers of, or are affiliated
with the Sponsor; and (3) one Trustee shall be the Property Trustee for so
long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
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.
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; 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 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;
(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 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 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of 310(b) of the Trust Indenture Act;
and
(d) the Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in 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 which shall act through one or more
Authorized Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees under this Declaration shall be:
James T. Anderson
7800 East Orchard Road
Englewood, Colorado 80111
Rahn K. Porter
7800 East Orchard Road
Englewood, Colorado 80111
Roger Fox
7800 East Orchard Road
Englewood, Colorado 80111
The initial Delaware Trustee under this Declaration shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Pursuant to Section 5.6(a)(i) hereof, the Sponsor hereby removes
Charles J. Burdick as a Regular Trustee and Michael J. Majchrzak as the
Delaware Trustee, each of whom was appointed as such in the Original
Declaration.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument executed
by the Sponsor; and
(ii) after the issuance of any Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(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 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; and
(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 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 until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
(d) the Holders of the Common Securities shall use their best efforts to
promptly appoint a Successor Delaware Trustee or Successor Property
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; and
(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
may petition any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon after 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 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, or any one of them, 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.
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 a 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.
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 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 Debenture Issuer makes a payment of interest (including Additional
Interest (as defined in the Indenture)), premium and principal on the
Debentures (or the Sponsor makes a payment in respect of the Debenture
Guarantee) 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
10. 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 Exhibit A and
incorporated herein by reference (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 Exhibit A and
incorporated herein by reference (the "Common Securities"). The Trust shall
have no securities or other interests in 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 the
Regular Trustees (or if there are more than two Regular Trustees by any two of
the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Certificate. 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 Certificate so signed shall be delivered by
the Trust, such Certificate nevertheless may be delivered as though the person
who signed such Certificate had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who shall at
the actual date of execution of such Security, 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 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; and
(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
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor or the Debenture Issuer;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor or the Debenture Issuer, upon the consent (other
than in connection with a dissolution of the Trust pursuant to clause (v) of
this Section 8.1(a)) of the holders of at least 66-2/3% in liquidation amount
of the Securities, voting together as a single class, to file a certificate of
cancellation with respect to the Trust, or the revocation of the charter
of the Sponsor or the Debenture Issuer 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 Sponsor,
the Debenture Issuer 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 election by the Sponsor, effective upon notice to the
Trust, the Property Trustee and the Delaware Trustee, to dissolve the Trust in
accordance with the terms of the Securities and all of the Debentures and
Debenture Guarantees endorsed thereon 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; and
(b) as soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon the completion of the winding up of the Trust,
one of the Regular Trustees (each Regular Trustee being hereby authorized to
take such action) shall file a certificate of cancellation with the Secretary
of State of the State of Delaware terminating the Trust; and
(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 terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void;
(b) subject to this Article IX, Preferred Securities shall be freely
transferable; and
(c) the Sponsor may not transfer the Common Securities.
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 which 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 documents incorporated by reference herein.
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 Trustees shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities,
the Preferred Securities Certificates, on original issuance, will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the
initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of 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. DTC
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; provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Declaration, so long
as Definitive Preferred Securities have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing
Agency setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in whole
or in part.
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 such 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 discontinuance 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 such Preferred
Securities; and
11. upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive 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, such instructions. 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 Preferred Securities may be
listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates 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 two Regular Trustees on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Debenture Guarantee, 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 of the Securities which
shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise; and
(b) Pursuant to 3803(a) of the Business Trust Act, the Holders of
the Securities, in their capacity as such, 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 the Property Trustee, except as otherwise set
forth in Section 3.9) or willful misconduct with respect to such acts or
omissions; and
(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 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 an
Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provide 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 of Securities,
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; and
(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 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, in the case of the
Property Trustee, except as set forth in Section 3.9) or willful misconduct
with respect to such acts or omissions; and
(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 10.4(a); and
(c) the provisions of this Section 10.4 shall survive the
termination of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Debenture Issuer, 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 of Securities 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 Debenture Issuer, 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 Debenture Issuer, the Delaware Trustee and the Property Trustee shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of
account and the records of the Trust shall be examined by and reported upon,
as of the end of each Fiscal Year, 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 of Securities, 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 of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each 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; and
(d) the Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed
by the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures and the Debenture Guarantee 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
sole signatories for the Property Trustee Account.
SECTION 11.4 Withholding.
The Trust and the 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 the 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 the Holder. In the event of any claimed over-withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount
required to be withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and
only by, a written instrument approved and executed by the Regular Trustees
(or, if there are more than two Regular Trustees a majority of the Regular
Trustees); provided, however, that:
(i) no amendment shall be made, and any such purported amendment shall
be void and ineffective, to the extent the result thereof would be to
(A) cause the Trust to fail to be classified for the purposes of United
States federal income taxation as a grantor trust;
(B) educe or otherwise adversely affect the powers of the Property
Trustee; or
(C) cause the Trust to be deemed to be an Investment Company which is
required to be registered under the Investment Company Act;
(ii) t such time after the Trust has issued any Securities which remain
outstanding, any amendment which would adversely affect the rights, privileges
or preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(iii) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities; and
(v) 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.
(b) Notwithstanding Section 12.1(a)(ii), 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;
and
(iii) add to the covenants, restrictions or obligations of the Sponsor.
(iv) to ensure the Trust's status as a grantor trust for federal income
tax purposes.
SECTOPM 12.2 Meetings of the Holders of Securities; 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 such class of Holders, 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 of Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of Securities calling a meeting shall
specify in writing the Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those specified shall be
counted for purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met; and
(b) except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders 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 the Holders of Securities 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 the Holders of Securities. Any action that may
be taken at a meeting of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is signed by
the Holders of Securities 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 ballot submitted to the Security Holder 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 of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of Securities 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 of Securities executing
it. Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities 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, the Trust Indenture Act, this
Declaration, the terms of the Securities 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 of Securities,
including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders of Securities, 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 THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
The Trustee which 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 national banking association with trust
powers, duly organized, validly existing and in good standing under the laws
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 Articles
of Organization or By-laws of the Property Trustee;
(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;
(e) the Property Trustee, pursuant to the Declaration, shall hold legal
title and a valid ownership interest in the Debentures and the Debenture
Guarantee under the law of its place of incorporation and Delaware law; and
(f) if the Property Trustee also acts as the Delaware Trustee, the
Delaware Trustee under Delaware law is either a natural person who is a
resident of the State of Delaware or if not a natural person, an entity which
maintains its principal place of business in the State of Delaware.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustees which act as initial Delaware Trustee and initial
Property Trustee each represent and warrant, jointly and severally, to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee and each Successor Property Trustee each represent and
warrant, jointly and severally, to the Trust and the Sponsor at the time of
the Successor Delaware Trustee's or Successor Property Trustee's, as the case
may be, acceptance of its appointment as such that;
(a) The Delaware Trustee under Delaware law is either a natural
person who is a resident of the Sate of Delaware or if not a natural person,
an entity which maintains its principal place of business in the State of
Delaware;
(b) the Delaware Trustee satisfies the requirments set forth in Section
5.2 and has the power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration and, if it is
not a natural person, is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization;
(c) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration. This 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); 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 Delaware Trustee of this
Declaration.
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 of the Securities):
U S WEST FINANCING II
c/o U S WEST, Inc.
7800 East Orchard Road
Englewood, Colorado 80111
Attention: Treasurer
(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 of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
(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 of the Securities):
THE FIRST NATIONAL BANK OF CHICAGO
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust 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 to the Trust):
U S WEST, Inc.
7800 East Orchard Road
Englewood, Colorado 80111
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
James T. Anderson
as Trustee
__________________________
Rahn K. Porter
as Trustee
__________________________
Roger Fox
as Trustee
__________________________
FIRST CHICAGO DELAWARE INC.
as Trustee
By:
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:
Name:
Title:
U S WEST, INC.
as Sponsor
By:
Name:
Title:
EXHIBIT A
TERMS OF SECURITIES
EXHIBIT B
SPECIMEN OF DEBENTURE
EXHIBIT C
PURCHASE AGREEMENT
EXHIBIT A
TERMS OF
8 % TRUST ORIGINATED PREFERRED SECURITIES
8 % TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of October 24, 1996 (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. 19,200,000 Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of Four Hundred Eighty Million Dollars ($480,000,000), 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 "8
% Trust Originated Preferred Securities" (the "Preferred Securities"). The
Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Annex I, 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. 593,815 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
Fourteen Million Eight Hundred Forty-Five Thousand Three Hundred Seventy-Five
($14,845,375), 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 "8 % Trust Originated Common Securities" (the "Common
Securities"). The Common Security Certificates evidencing the Common
Securities shall be substantially in the form attached hereto as Annex II,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. DISTRIBUTIONS.
(a) Periodic Distributions payable on each Security will be fixed at a
rate per annum of 8 % (the "Coupon Rate") of the stated liquidation amount of
$25 per Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon at the Coupon Rate (to the
extent permitted by applicable law). The term "Distributions" as used in
these terms includes such periodic 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 Debentures or the Debenture
Guarantee held by the Property Trustee. 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 in such a 30-day month.
(b) Distributions on the Securities will be cumulative, will accrue from
October 29, 1996 and will be payable quarterly in arrears, on March 31,
June 30, September 30, and December 31 of each year, commencing on December
31, 1996, except as otherwise described below. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each, an "Extension Period") and, as a
consequence of such extension, 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 during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture 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. 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 after the end of the
Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture 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 Debentures. 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 Supplement dated October 24, 1996 to the Prospectus
dated October 31, 1995 (together, the "Prospectus") of the Trust included
in the Registration Statement on Form S-3 of the Sponsor, the Debenture
Issuer, the Trust and certain other business trusts. 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 the
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 Debentures. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debenture Issuer or the Sponsor having failed to make a payment
under the Debentures or the Debenture Guarantee, as the case may be, will
cease to be payable to the Person in whose name such Securities are registered
on the relevant 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. 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 of the Securities 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
of Securities, after paying or making reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, 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,
Debentures 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, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures 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 Debentures
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 Preferred Securities to be redeemed will be as described in
Paragraph 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each as
defined below, and each a "Special Event") shall occur and be continuing,
the Debenture Issuer shall have the right, upon not less than 30 nor more than
60 days notice, to redeem the Debentures 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 Debentures so redeemed shall be redeemed by
the Trust at the Redemption Price on a Pro Rata basis in accordance with
Paragraph 8 hereof. The Common Securities will be redeemed Pro Rata with the
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities will have priority over the Common
Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters to the effect that on or after the date of the 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 therefore 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 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
Debentures, (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 Debenture Issuer to the
Trust on the Debentures is not, or within 90 days of the date thereof will not
be, deductible, in whole or in part, by the Debenture 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 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 Supplement.
(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) In the event that the Sponsor makes the election referred to in
Section 8.1(a)(v) of the Declaration, the Regular Trustees shall dissolve the
Trust and, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, cause Debentures, held by the Property Trustee, having an 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 of the Securities in liquidation
of such Holders' interests in the Trust on a Pro Rata basis in accordance with
paragraph 8 hereof. On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(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 Debentures and
the Debenture Guarantee to be delivered upon such distribution and (iii) 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 Debentures 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 presented to the
Debenture Issuer or its agent for transfer or reissue. If the Debentures are
distributed to Holders of the Securities, pursuant to the terms of the
Indenture, the Debenture Issuer will use its best efforts to have the
Debentures listed on the New York Stock Exchange or on such other exchange as
the Preferred Securities were listed immediately prior to the distribution of
the Debentures.
(f) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of Debentures
in exchange for the 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 Debentures. For purposes of the calculation
of the date of redemption or exchange and the dates on which notices are given
pursuant to this paragraph 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 of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Securities at the address of each
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 will be redeemed Pro Rata from each
Holder of Securities, it being understood that, in respect of Preferred
Securities registered in the name of and held of record by DTC (or any
successor Clearing Agency) or any other nominee, the distribution of the
proceeds of such redemption will be made to each Clearing Agency Participant
(or person on whose behalf such 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
Debentures are redeemed as set out in this paragraph 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, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will deposit
irrevocably with the Depository (or successor Clearing Agency) funds
sufficient to pay the 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,
and (B) if the Preferred Securities are issued in definitive form, with
respect to the Preferred Securities, and with respect to the Common
Securities, provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the 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. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption date, as
applicable, 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 which 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 Securities is improperly withheld or refused
and not paid 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
Preferred Security Certificates have been issued, to the Holder thereof, 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 paragraphs 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 of the second to last sentence of 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, and place of
conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waiving any past default and its consequences
that is waivable under Section 6.06 of the Indenture, or (iii) exercising any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable, provided, however, that where a
consent under the Indenture would require the consent or act of the Holders
greater than a majority in principal amount of Debentures 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 which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Debenture 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.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures 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 by any entity directly
or indirectly controlling or controlled by or under direct or indirect common
control with 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 paragraphs 6(b), 6(c) and 7 and 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 second to
last 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
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that is waivable under Section 6.06 of the Indenture, or (iii)
exercising any right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable, provided, however, that where
a consent or action under the Indenture would require the consent or act of
the Holders of greater than a majority in principal amount of Debentures
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 Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Debentures
outstanding. Pursuant to this paragraph 6(c), the Property Trustee shall not
revoke any action previously authorized or approved by a vote of the Holders
of the Common Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Property Trustee or
the Debenture 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.
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 Debentures 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 as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities
as a class, 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 66-2/3% in
liquidation amount of the Securities, voting together as a single class;
provided, however, that if 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 66-2/3% in liquidation amount of such class of
Securities.
(b) In the event the consent of the Property Trustee as the holder of
the Debentures and the Debenture Guarantee is required under the Indenture
with respect to any amendment, modification or termination of the Indenture,
the Debentures or the Debenture Guarantee, 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 greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Property Trustee may only
give such consent at the direction of the Holders of at least the proportion
in liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures 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
paragraph 7(b) unless the Property Trustee has been furnished 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 Indenture 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, 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
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities.
10. LISTING.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange
Limited.
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 and the Indenture to a Holder without charge on written
request to the Trust at its principal place of business.
ANNEX I
[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 "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository 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 Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) 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) 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. 90338M204
Certificate Evidencing Preferred Securities
of
U S WEST FINANCING II
8 % Trust Originated Preferred Securities.
(liquidation amount $25 per Preferred Security)
U S WEST FINANCING II, a 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 undivided
beneficial interests in the assets of the Trust designated the 8 % 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 designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred 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 October 24, 1996, as the same may be amended from time to time (the
"Declaration") including the designation of the terms of the Preferred
Securities as set forth in Exhibit A 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 Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide
a copy of the Declaration, the Preferred Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder 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 Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of, 199__.
as Trustee
as Trustee
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
_____________________________________________________________________________
_____________________________________________________________________________
_______________
(Insert assignee's social security or tax identification number)
_____________________________________________________________________________
_____________________________________________________________________________
________________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
_____________________________________________________________________________
_____________________________________________________________________________
________ agent
to transfer this Preferred 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 Preferred
Security Certificate)
ANNEX II
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
U S WEST FINANCING II
Common Securities.
(liquidation amount $25 per Common Security)
U S WEST FINANCING II, a 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 8 % 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 October 24, 1996, 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 Exhibit A 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 Trust at its principal place of business.
Upon receipt of this certificate, the Holder 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 Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of, 199.
as Trustee
as Trustee
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
____________________________________________________________________________
____________________________________________________________________________
_______________
(Insert assignee's 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)