Exhibit 4(a)
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AMENDED AND RESTATED DECLARATION
OF TRUST
MediaOne Finance Trust I
Dated as of May , 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions.................................................... 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application............................... 7
Section 2.2. Lists of Holders of Securities................................. 7
Section 2.3. Reports by the Property Trustee................................ 7
Section 2.4. Periodic Reports to Property Trustee........................... 8
Section 2.5. Evidence of Compliance with Conditions Precedent............... 8
Section 2.6. Events of Default; Waiver...................................... 8
Section 2.7. Event of Default; Notice....................................... 9
ARTICLE III
ORGANIZATION
Section 3.1. Name...........................................................10
Section 3.2. Office.........................................................10
Section 3.3. Purpose........................................................10
Section 3.4. Authority......................................................10
Section 3.5. Title to Property of the Trust.................................11
Section 3.6. Powers and Duties of the Regular Trustees......................11
Section 3.7. Prohibition of Actions by the Trust and the Trustees...........13
Section 3.8. Powers and Duties of the Property Trustee......................14
Section 3.9. Certain Duties and Responsibilities of the Property Trustee....16
Section 3.10. Certain Rights of Property Trustee.............................17
Section 3.11. Delaware Trustee...............................................19
Section 3.12. Execution of Documents.........................................20
Section 3.13. Not Responsible for Recitals or Issuance of Securities.........20
Section 3.14. Duration of Trust..............................................20
Section 3.15. Mergers........................................................20
ARTICLE IV
SPONSOR
Section 4.1. Sponsor's Purchase of Common Securities........................22
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Section 4.2. Responsibilities of the Sponsor................................22
ARTICLE V
TRUSTEES
Section 5.1. Number of Trustees.............................................22
Section 5.2. Delaware Trustee...............................................23
Section 5.3. Property Trustee; Eligibility..................................23
Section 5.4. Qualifications of Regular Trustees and Delaware Trustee
Generally......................................................24
Section 5.5. Initial Trustees...............................................24
Section 5.6. Appointment, Removal and Resignation of Trustees...............25
Section 5.7. Vacancies among Trustees.......................................26
Section 5.8. Effect of Vacancies............................................26
Section 5.9. Meetings.......................................................26
Section 5.10. Delegation of Power............................................27
ARTICLE VI
DISTRIBUTIONS
Section 6.1. Distributions..................................................27
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1. General Provisions Regarding Securities........................27
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1. Dissolution and Termination of Trust...........................28
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1. Transfer of Securities.........................................29
Section 9.2. Transfer of Certificates.......................................29
Section 9.3. Deemed Security Holders........................................30
Section 9.4. Book Entry Interests...........................................30
Section 9.5. Notices to Clearing Agency.....................................31
Section 9.6. Appointment of Successor Clearing Agency.......................31
Section 9.7. Definitive Preferred Security Certificates.....................31
Section 9.8. Mutilated, Destroyed, Lost or Stolen Certificates..............32
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Article X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTTEES OR OTHERS
Section 10.1. Liability.. . . . . . . . . . . . . . . . . . . . . . . . . . .32
Section 10.2. Exculpation.. . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 10.3. Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . .33
Section 10.4. Indemnification.. . . . . . . . . . . . . . . . . . . . . . . .34
Section 10.5. Outside Businesses. . . . . . . . . . . . . . . . . . . . . . .34
Article XI
ACCOUNTING
Section 11.1. Fiscal Year.. . . . . . . . . . . . . . . . . . . . . . . . . .35
Section 11.2. Certain Accounting Matters. . . . . . . . . . . . . . . . . . .35
Section 11.3. Banking.. . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 11.4. Withholding.36
Article XII
AMENDMENTS AND MEETINGS
Section 12.1. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 12.2. Meetings of the Holders of Securities; Action by Written
Consent.. . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Article XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
Section 13.1. Representations and Warranties of Property Trustee. . . . . . .39
Section 13.2. Representations and Warranties of Delaware Trustee. . . . . . .40
Article XIV
MISCELLANEOUS
Section 14.1. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 14.2. Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . .41
Section 14.3. Intention of the Parties. . . . . . . . . . . . . . . . . . . .42
Section 14.4. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Section 14.5. Successors and Assigns. . . . . . . . . . . . . . . . . . . . .42
Section 14.6. Partial Enforceability. . . . . . . . . . . . . . . . . . . . .42
Section 14.7. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .42
Section 14.8. Of Trust Indenture Act Section of of 1939, as amended
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . .iv
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
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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)
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* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MediaOne Finance Trust I
May , 1998
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of May , 1998 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. (to be renamed "MediaOne Group, 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 April 9, 1998 (the "Original Declaration")
and a Certificate of Trust filed with the Secretary of State of Delaware on
April 13, 1998, 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;
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(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 .
"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 of the Sponsor in respect of the Common
Securities.
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"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.
"DEALER MANAGER AGREEMENT" means the Dealer Manager Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
"DEBENTURE GUARANTEE" means the guarantee by the Sponsor of the
Debentures endorsed thereon.
"DEBENTURE ISSUER" means MediaOne Group Funding, Inc., a Delaware
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.
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"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
(i) any Trustee;
(ii) any Affiliate of any Trustee;
(iii) any officers, directors, shareholders, members,
partners, employees, representatives or agents of any
Trustee; or
(iv) any employee or agent of the Trust or its Affiliates.
"INDENTURE" means the Indenture dated as of
among the Debenture Issuer, U S WEST, Inc., a Delaware corporation, as
guarantor, and Norwest Bank Minnesota, National Association, as trustee, as
supplemented by a Second Supplemental Indenture dated as of
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:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Certificate;
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(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement to
be dated as of 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.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section
3.8(c).
"QUORUM" means a majority of the Regular Trustees or if there are
only two Regular Trustees, both of them.
"REGULAR TRUSTEE" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"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,
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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.
"SPECIAL EVENT" has the meaning set forth in the terms of the
Securities.
"SPONSOR" means U S WEST, Inc., a Delaware corporation (to be
renamed MediaOne Group, Inc.) 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;
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(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 Sections 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.
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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:
(iii) 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
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(iv) 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:
(v) a default under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
9
(vi) 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 "MediaOne Finance Trust I", 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 188 Inverness
Drive West, Englewood, Colorado 80112. 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.
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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-4 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; enter into and perform, on behalf of the
Trust, the Dealer Manager Agreement providing for the
sale of the Preferred Securities;
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(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 Section 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
12
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;
13
(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
14
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 Section 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
15
(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
16
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, request and rely upon an
Officers' Certificate which, upon receipt
17
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
18
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 Section 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, each of the Regular Trustees is
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.
19
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
20
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.
21
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:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-4 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
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;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Dealer Manager 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
22
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;
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(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 Section 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 Section 310(b) of the Trust Indenture Act) shall
in all respects comply with the provisions of Section 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 Section 310(b) of the Trust Indenture Act.
Section 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who
is at least 21 years of age or a legal entity which shall act through one or
more Authorized Officers.
Section 5.5. INITIAL TRUSTEES.
The initial Regular Trustees under this Declaration shall be:
Constance P. Campbell
188 Inverness Drive West
Englewood, Colorado 80112
Christine J. Brennet-Morris
188 Inverness Drive West
Englewood, Colorado 80112
Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
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
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Pursuant to Section 5.6(a)(i) hereof, the Sponsor hereby removes
RCSP Inc. as the Delaware Trustee, who 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
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(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
26
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
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
27
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 a
Majority 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;
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(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
29
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
30
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
(d) 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.
31
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 Section 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
32
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:
33
(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
34
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
35
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) reduce 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;
36
(ii) at 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;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to ensure the Trust's status as a grantor trust for
federal income tax purposes.
Section 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
37
(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
38
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; 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
39
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 State 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 requirements 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):
40
MediaOne Finance Trust I
c/o U S WEST, Inc. (to be renamed "MediaOne Group, Inc.")
188 Inverness Drive West
Englewood, Colorado 80112
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. (to be renamed "MediaOne Group, Inc.")
188 Inverness Drive West
Englewood, Colorado 80112
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 AND OBLIGATIONS OF HOLDERS, THE
TRUST, THE SPONSOR AND THE TRUSTEES 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 THE PRINCIPLES OF CONFLICT
OF LAWS OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL
FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF
DELAWARE; PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE
HOLDERS, THE TRUST, THE SPONSOR, THE TRUSTEES OR THIS DECLARATION ANY
PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE
PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT
WITH THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR
AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B)
AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR
EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF
REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES,
OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND
EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE
PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR
REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR
INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER
STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES
THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND
POWERS OF THE TRUSTEES AS SET FORTH OR REFERENCED IN THIS DECLARATION.
SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE TRUST.
41
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.
42
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
Constance P. Campbell
as Regular Trustee
- --------------------------
Christine J. Brennet-Morris
as Regular Trustee
- --------------------------
Rahn K. Partes
as Regular Trustee
- --------------------------
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By:
--------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By:
--------------------------
Name:
Title:
U S WEST, INC. (to be renamed "MediaOne Group, Inc.")
as Sponsor
By:
--------------------------
Name:
Title:
43
EXHIBIT A
TERMS OF SECURITIES
44
EXHIBIT A
TERMS OF
% TRUST ORIGINATED PREFERRED SECURITIES
% TRUST ORIGINATED COMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of , 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and
the Common Securities are set out below (each capitalized term used but not
defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) PREFERRED SECURITIES. Preferred Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust
of Dollars ($ ), and a liquidation amount with respect
to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as " %Trust Originated
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in
the form attached hereto as Annex I, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on which the
Preferred Securities are listed.
(b) COMMON SECURITIES. Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
Dollars ($ ), and a liquidation amount with respect to the assets
of the Trust of $25 per Common Security, are hereby designated for the
purposes of identification only as " % Trust Originated Common Securities"
(the "Common Securities"). The Common Security Certificates evidencing the
Common Securities shall be substantially in the form 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 % (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 , 1998 and will be payable quarterly in arrears, on March 31, June
30, September 30, and December 31 of each year, commencing on , 1998,
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 "Chapter 6: The New
Preferred Securities -- The New Preferred Securities -- Book-Entry Only
Issuance; The Depository Trust Company" in the Prospectus dated ,
1998 (the "Prospectus") of the Trust included in the Registration Statement on
Form S-4 of the Sponsor, the Debenture Issuer, the Trust and a certain other
business trust. 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
2
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.
3
(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 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,
4
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 isted 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.
5
(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 othr
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.
6
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.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing with respect to the Preferred Securities and such event is
attributable to the failure of the Debenture Issuer or the Sponsor to pay
interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the
redemption date), then a holder of Preferred Securities may institute a
proceeding for enforcement of payment to such holder of the principal of, or
interest on, Debentures having a principal amount equal tothe aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Debentures.
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
7
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
8
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. Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing with respect to the Common Securities and such event is
attributable to the failure of the Debenture Issuer or the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a holder of Common Securities may institute a proceeding for enforcement of
payment to such holder of the principal of, or interest on, Debentures having a
principal amount equal to the aggregate liquidation amount of the Common
Securities of such holder on or after the respective due date specified in the
Debentures.
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 a Majority
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
9
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount of
such class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the 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.
10
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.
11
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.
12
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.
----------
Certificate Evidencing Preferred Securities
of
MEDIAONE FINANCE TRUST I
% Trust Originated Preferred Securities.
(liquidation amount $25 per Preferred Security)
13
MEDIAONE FINANCE TRUST I, 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 % 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, 1998, 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.
14
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)
15
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
MEDIAONE FINANCE TRUST I
Common Securities.
(liquidation amount $25 per Common Security)
MEDIAONE FINANCE TRUST I, 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 % 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 , 1998, 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.
16
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)
17
EXHIBIT B
SPECIMEN OF DEBENTURE
45
EXHIBIT C
DEALER MANAGER AGREEMENT
46
EXHIBIT C
FORM OF OPINIONS OF WEIL, GOTSHAL & MANAGES LLP
TO BE DELIVERED ON THE COMMENCEMENT DATE:
(i) The Registration Statement is effective under the Securities Act
and, to the best of such counsel's knowledge and information, no stop order
suspending the effectiveness of the Registration Statement has been issued under
the Securities Act or proceedings therefor initiated or threatened by the
Commission.
(ii) At the time the Registration Statement became effective and at the
Settlement Date, the Registration Statement (other than the documents
incorporated by reference, the financial statements and supporting schedules,
included therein and other financial and statistical data included therein and
those parts of the Registration Statement that constitute the Indenture
Trustee's and the Property Trustee's respective Statements of Eligibility and
Qualification under the Trust Indenture Act (Form T-1), as to which no opinion
need be rendered) complied as to form in all material respects with the
requirements of the Securities Act, the Exchange Act and the Trust Indenture
Act, and the rules and regulations promulgated thereunder.
(iii) The statements in the Prospectus under the captions "Chapter
6:The New Preferred Securities--The New Preferred Securities," "--Description of
the New Debt Securities and the New Debt Guarantees," "--Description of the New
Preferred Securities Guarantees," and "--Effect of Obligations Under the New
Debt Securities, the New Debt Guarantees and the New Preferred Securities
Guarantee," insofar as they constitute summaries of legal matters or documents,
have been reviewed by such counsel and are accurate in all material respects.
(iv) The section of the Prospectus entitled "Certain Federal Income Tax
Consequences" is accurate in all material respects.
(v) U S WEST is a corporation in good standing, duly incorporated and
validly exiting under the laws of the State of Delaware and is authorized by its
articles or certificate of incorporation to transact the business in which it is
engaged, as set forth in the Prospectus.
(vi) Capital Funding is a corporation in good standing, duly incorporated
and validly exiting under the laws of the State of Colorado and is authorized by
its articles of incorporation to transact the business in which it is engaged,
as set forth in the Prospectus.
C-1
(vii) MediaOne Funding is a corporation in good standing, duly incorporated
and validly exiting under the laws of its state of incorporation and is
authorized by its articles of incorporation to transact the business in which it
is engaged, as set forth in the Prospectus.
(viii) The execution, delivery and performance of this Agreement by U S
WEST and Capital Funding have been duly authorized by all necessary corporate
action on the part of U S WEST and Capital Funding; and this Agreement has been
duly and validly executed and delivered by each of U S WEST and Capital Funding.
(ix) No federal authorization, approval, consent or order of any court or
governmental authority or agency is required in connection with the execution
and delivery by U S WEST or MediaOne Funding or the issuance of the Common
Securities, the New Preferred Securities, the New Debt Securities or the
Guarantees pursuant to the terms of this Agreement, except such as have been
obtained under the Securities Act and the rules and regulations thereunder, the
Exchange Act and the rules and regulations thereunder, and the qualification of
the Trust Agreement and the Indenture under the Trust Indenture Act.
(x) The Trust Agreements and the New Preferred Securities Guarantees
have been duly qualified under the Trust Indenture Act.
(xi) The New Series I Trust and the New Series II Trust are not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
TO BE DELIVERED ON THE SETTLEMENT DATE:
(xii) Assuming that each of the guarantee agreements has been duly
authorized by U S WEST, each of the guarantee agreements has been duly executed
and delivered by U S WEST and assuming due authorization, execution and delivery
by the Indenture Trustee constitutes a valid and binding obligation of U S WEST,
enforceable against U S WEST in accordance with its terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(xiii) Assuming that the Indenture has been duly authorized by each of U S
WEST and MediaOne Funding and has been duly authorized, executed and delivered
by the Indenture Trustee, the Indenture has been duly executed and delivered by
each of U S WEST and MediaOne Funding and is a valid and binding obligation of
each of U S WEST and MediaOne Funding, enforceable against each of U S WEST and
MediaOne Funding in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions; and the
Indenture has been duly qualified under the Trust Indenture Act.
C-2
(xiv) Assuming that the New Series I Debt Securities and New Series II
Debt Securities have been duly authorized by MediaOne Funding, the New Series I
Debt Securities and New Series II Debt Securities have been duly executed by
MediaOne Funding, and when authenticated in the manner provided in the Indenture
and delivered against exchange therefor as described in the Prospectus, will
constitute valid and binding obligations of MediaOne Funding, enforceable
against MediaOne Funding in accordance with their terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(xv) Assuming that the New Preferred Securities Guarantees have been duly
authorized by U S WEST, the New Preferred Securities Guarantees have been duly
executed by U S WEST, and when authenticated in the manner provided in the
Indenture and delivered against payment therefor as described in the Prospectus,
constitute a valid and binding obligation of U S WEST, enforceable against U S
WEST in accordance with its terms, except to the extent that enforcement thereof
may be limited by the Bankruptcy Exceptions.
(xvi) The New Series I Trust and the New Series II Trust will not be
classified as a grantor trust for United States federal income tax purposes.
In addition, on each of the Commencement Date and the Settlement Date such
opinion shall state that such counsel has participated in the preparation of the
Offering Materials, including the documents incorporated by reference therein,
and in conferences with officers and other representatives of U S WEST, Capital
Funding, New Series I Trust, New Series II Trust and MediaOne, and
representatives and counsel for the Dealer Managers at which the contents of the
Offering Materials and related matters were discussed and, although such counsel
need not undertake to determine independently nor pass upon or assume any
responsibility, explicitly or implicitly, for the accuracy, completeness or
fairness of the statements contained in the Offering Materials, on the basis of
and subject to the foregoing, no facts have come to the attention of such
counsel to lead such counsel to believe that the Offering Materials (including
the Schedule 13E-4) or any amendment thereto (except for the financial
statements, notes or schedules thereto and other financial and statistical data
included therein or omitted therefrom and except for that part of the
Registration Statement that constitutes the Forms T-1), as of the date of the
Offering Materials and at the Settlement Date, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading
In giving such opinions, Weil, Gotshal & Manges may rely as to matters
governed by the laws of the State of Colorado on an opinion or opinions of
Stephen E. Brilz, Esq., and as to certain matters governed by the laws of the
State of Delaware, on an opinion or opinions of Morris, Nichols, Arsht &
Tunnell, respectively, provided that such opinion or opinions shall be addressed
to the Dealer Managers, shall be dated as of such date and shall expressly
permit Weil, Gotshal & Manges to rely thereon.
C-3
EXHIBIT D
FORM OF OPINION OF STEPHEN E. BRILZ, ESQ.
TO BE DELIVERED ON THE COMMENCEMENT DATE:
(A) U S WEST has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Colorado with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Materials and to enter into
and perform its obligations under this Agreement, the Trust Agreement, the
Indenture and each of the guarantee agreements and to purchase, own and hold
the Common Securities issued by New Series I Trust and New Series II Trust,
respectively. U S WEST has all requisite corporate power and authority to
make and consummate the Offers in accordance with their terms.
(B) Capital Funding has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Colorado
with corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Materials and to
enter into and perform its obligations under this Agreement.
(C) MediaOne Funding has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its state of
incorporation with corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Materials and to enter into and perform its obligations under Indenture and
the Trust Agreements.
(D) The execution, delivery and performance of this Agreement, the
Trust Agreement, the New Preferred Securities, the Common Securities, the
Indenture, the New Debt Securities, the Guarantee Agreements, the Indenture
and the New Preferred Securities Guarantees and the consummation of the
transactions contemplated herein and therein and compliance by U S WEST and
Capital Funding with their respective obligations hereunder and thereunder
will not conflict with in any material matter or result in a material breach
or violation of any term or provision of, or constitute a default under any
indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument known to such counsel to which U S WEST, any of U S WEST
Communications Group, Inc., U S WEST Communications Inc. and Capital Funding
(the "Significant Subsidiaries") or the New Series I Trust or New Series II
Trust is a party or by which any of them may be bound, or to which any of the
property or assets of U S West, any of the Significant Subsidiaries or the
New Series I Trust or the New Series II Trust is subject, nor will such
action result in any violation of the provisions of the charter or by-laws of
U S WEST or of Capital Funding or the Trust Agreement or the Certificate of
Trust, or any statute (other than the Securities Act
D-1
or state securities or Blue Sky laws) or any order, rule or regulation known
to such counsel of any court or Other Agency having jurisdiction over
U S WEST or any of its subsidiaries or any of their properties; except any
statute, order, rule or regulation the violation of which would not have a
material adverse effect on the consolidated financial position, shareholders'
equity or results of U S WEST taken as a whole.
(E) No state authorization, approval, consent or order of any court or
Other Agency is required in connection with the issuance of the Common
Securities or the exchange of the New Preferred Securities, the New Debt
Securities or the Preferred Securities Guarantees, except such as have been
obtained under the Securities Act or the rules and regulations thereunder,
and the qualification of the Trust Agreements and the Indenture under the
Trust Indenture Act and such as may be required under state securities law.
(F) The Schedule l3E-4 (except for any financial data contained therein
as to which counsel does not express an opinion) complies in all material
respects to the requirements of Section 13(e) of the Exchange Act and the
rules and regulations thereunder.
TO BE DELIVERED ON THE SETTLEMENT DATE:
(G) The Trust Agreements have been duly authorized, executed and
delivered by U S WEST and the Indenture Trustee.
(H) This Agreement, the guarantee agreements, the Indenture, the New
Preferred Securities, the Common Securities, the New Debt Securities and the
New Preferred Securities Guarantees have been duly authorized, executed and
delivered by U S WEST.
(I) This Agreement, the Indenture, the New Preferred Securities, the
Common Securities, the New Debt Securities, and the Preferred Securities
Guarantees have been duly authorized, executed and delivered by MediaOne
Funding.
(J) No state authorization, approval, consent or order of any court or
Other Agency is required in connection with the issuance of the Common
Securities or the exchange of the New Preferred Securities, the New Debt
Securities or the Preferred Securities Guarantees, except such as have been
obtained under the Securities Act or the rules and regulations thereunder,
and the qualification of the Trust Agreements and the Indenture under the
Trust Indenture Act and such as may be required under state securities law.
(K) All of the issued and outstanding Common Securities of the New
Series I Trust and New Series II Trust are directly owned by U S WEST free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
D-2
(L) The Indenture Trustee is the record holder of New Debt Securities
and the Preferred Securities Guarantees and no security interest, mortgage,
pledge, lien, encumbrance, claim or equity is noted thereon or on the
register.
(M) Each of the documents incorporated by reference in the Offering
Materials at the time they were filed or last amended (other than the
financial statements and related schedules and other financial or statistical
data included or incorporated by reference therein as to which such counsel
need express no opinion), complied as to form in all material respects with
the requirements of the Securities Act, the rules and regulations thereunder
and the Exchange Act, the rules and regulations thereunder, as applicable.
In giving such opinions, Stephen E. Brilz, Esq. may rely as to certain
matters governed by the laws of the State of Delaware or the State of New
York on an opinion or opinions of Morris, Nichols, Arsht & Tunnell and Weil,
Gotshal & Manges, respectively, provided that such opinion or opinions shall
be addressed to the Dealer Managers, shall be dated as of such date and shall
expressly permit Stephen E. Brilz, Esq. to rely thereon.
D-3
EXHIBIT E
[TO BE REVISED AFTER DISCUSSIONS WITH MORRIS NICHOLS]
FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & TUNNELL
TO BE DELIVERED ON THE COMMENCEMENT DATE:
(i) Each of New Series I Trust and the New Series II Trust has been
duly created and is validly existing in good standing as a business trust
under the Delaware Act; all filings required under the laws of the State of
Delaware with respect to the creation and valid existence of each of New
Series I Trust and the New Series II Trust as a business trust have been
made; under the Delaware Act and the Trust Agreement, each of New Series I
Trust and the New Series II Trust has the business trust power and authority
to own property and conduct its business, all as described in the Offering
Materials, (y) enter into and perform its obligations under this Agreement,
and (z) issue and perform its obligations under the New Preferred Securities
and the Common Securities.
(ii) The issuance and exchange by the New Series I Trust and the New
Series II Trust of the New Preferred Securities and Common Securities; the
execution, delivery and performance by the New Series I Trust and the New
Series II Trust of this Agreement; and the consummation of the transactions
contemplated herein and therein; and compliance by the New Series I Trust and
the New Series II Trust with their obligations hereunder and thereunder will
not violate any of the provisions of the Certificate of Trust or the Trust
Agreement, or any applicable Delaware law or administrative regulation.
TO BE DELIVERED ON THE SETTLEMENT DATE:
(iii) Assuming the Trust Agreement has been duly authorized, executed
and delivered by the Indenture Trustee and U S WEST, the Trust Agreement is a
valid and binding obligation of U S WEST and the Indenture Trustee,
enforceable against U S WEST and the Indenture Trustee, in accordance with
its terms, except as enforcement thereof may be limited by the (i) bankruptcy,
insolvency, moratorium, receivership, reorganization, liquidation, fraudulent
conveyance and other similar laws relating to or affecting the rights and
remedies of creditors generally, and (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law).
(iv) Under the Delaware Act and the Trust Agreement, the execution and
delivery by New Series I Trust and New Series II Trust of this Agreement, and
the performance by
E-1
New Series I Trust and New Series II Trust of each of their obligations
thereunder, have been duly authorized by all necessary business trust action
on the part of the Trust; and this Agreement and the Pricing Agreement have
been duly executed and delivered by New Series I Trust and New Series II
Trust, respectively, under the laws of Delaware.
(v) The Common Securities have been duly authorized by the Trust
Agreement and are validly issued and represent undivided beneficial interests
in the assets of the New Series I Trust and New Series II Trust,
respectively; and under the Delaware Act and the Trust Agreement, the
issuance of the Common Securities is not subject to preemptive rights.
(vi) The New Preferred Securities to be exchanged for Old Preferred
Securities have been duly authorized by the Trust Agreements and, when
exchanged for Old Preferred Securities pursuant to the Offers, will be
validly issued, and (subject to the qualifications set forth herein) fully
paid and nonassessable undivided beneficial interests in the assets of New
Series I Trust or New Series II Trust, respectively; the holders of the New
Preferred Securities, as beneficial owners of New Series I Trust or New
Series II Trust, respectively, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware;
and under the Delaware Act and the Trust Agreement, the issuance of the New
Preferred Securities is not subject to preemptive rights. Such counsel may
note that the New Preferred Security holders may be obligated, pursuant to
the Trust Agreement, to (i) provide indemnity and/or security in connection
with and pay taxes or governmental charges arising from transfers of New
Preferred Security Certificates and the issuance of replacement New Preferred
Security Certificates, and (ii) provide security and indemnity in connection
with requests of or directions to the property trustee to exercise its rights
and powers under the Trust Agreement.
(vii) Assuming that the New Series I Trust and the New Series II Trust
derive no income from or in connection with sources within the State of
Delaware and has no assets, activities (other than having a Delaware trustee
as required by the Delaware Act and the filing of documents with the Delaware
Secretary of State) or employees in the State of Delaware, no authorization,
approval, consent or order of any Delaware court or governmental authority or
agency is required to be obtained by the New Series I Trust and the New
Series II Trust solely in connection with the issuance and exchange of the
Common Securities and the New Preferred Securities or the exchange by the
Trust of the Subordinated Debt Securities and the Guarantees except such as
have been obtained and such as may be required by state securities laws.
E-2
EXHIBIT F
[TO BE REVISED AFTER DISCUSSIONS WITH PEPPER HAMILTON]
FORM OF OPINION OF PEPPER, HAMILTON & SCHEETZ
TO BE DELIVERED ON THE SETTLEMENT DATE:
(i) , a trustee (the "Delaware Trustee") of the New Series I Trust
is a natural person and is a resident of the State of Delaware.
(ii) The Trust Agreement for New Series II Trust has been duly
executed and delivered by each property trustee and the Delaware Trustee, and
constitutes the legal, valid and binding obligation of each property trustee
and the Delaware Trustee, respectively, enforceable against each property
trustee and the Delaware Trustee in accordance with its terms, except as
enforcement thereof may be limited by the Bankruptcy Exceptions.
(iii) , a trustee (the "Delaware Trustee") of the New Series II
Trust is a natural person and is a resident of the State of Delaware.
(iv) The Trust Agreement for New Series II Trust has been duly
executed and delivered by each property trustee and the Delaware Trustee, and
constitutes the legal, valid and binding obligation of each property trustee
and the Delaware Trustee, respectively, enforceable against each property
trustee and the Delaware Trustee in accordance with its terms, except as
enforcement thereof may be limited by the Bankruptcy Exceptions.
In giving such opinion, Pepper, Hamilton & Scheetz may rely as to
matters governed by the laws of the State of Colorado on an opinion of
Stephen E. Brilz, Esq. as to matters concerning The First National Bank of
Chicago under the federal banking laws on an opinion the Law Department of
The First National Bank of Chicago, Norwest Bank Minnesota, N.A., under the
federal banking laws on an opinion the Law Department of Norwest Bank
Minnesota, N.A., respectively, provided that such opinion or opinions shall
be addressed to the Dealers Managers, shall be dated as of such date and
shall expressly permit Pepper, Hamilton & Scheetz to rely thereon.
F-1
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
P-1
CUSIP NO.
Certificate Evidencing Preferred Securities
of
MEDIAONE FINANCE TRUST I
___% Trust Originated Preferred Securities.
(liquidation amount $25 per Preferred Security)
MEDIAONE FINANCE TRUST I, a business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of preferred securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the ____%
Trust Originated Preferred Securities (liquidation amount
$25 per Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The 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 ________ __, 1998, 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 extend 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.
2
IN WITNESS WHEREOF, the Trust has executed this certificate this ___th
day of __________, 1998.
as Trustee
---------------------------------
as Trustee
---------------------------------
3
------------------------------
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)
4