REGISTERED PRINCIPAL AMOUNT
No. $
CUSIP 912912AN2
U S WEST CAPITAL FUNDING, INC.
6 1/4% NOTES DUE JULY 15, 2005
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF
PRINCIPAL AND INTEREST BY
U S WEST, INC.
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary, or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary, or by
the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary. Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55 Water
Street, New York, New York) to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate 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 is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered owner
hereof, Cede & Co., has an interest herein.
U S WEST Capital Funding, Inc., a corporation duly organized and existing
under the laws of the State of Colorado (herein called the "Company") for value
received hereby promises to pay Cede & Co., or registered assigns, the
principal sum of
$ ( Million Dollars)
on July 15, 2005, by wire transfer of immediately available funds in such
coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts and to pay
interest semiannually on each January 15 and July 15, commencing January 15,
1999, on said principal sum at the rate per annum specified in the title of
this Note, in the same manner, in like coin or currency, from the fifteenth
day of January or July, as the case may be, to which interest on this Note
has been paid preceding the date hereof (unless the date hereof is a January
15 or July 15 to which interest has been paid, in which case from the date
hereof, or unless the date hereof is prior to the first payment of interest,
in which case from June 29, 1998) until payment of said principal sum has
been made or duly provided for. Notwithstanding the foregoing, unless this
Note shall be authenticated at a time when there is an existing default in
the payment of interest on the Notes, if the date hereof is between January 1
and the immediately following January 15 or is between July 1 and the
immediately following July 15, this Note shall bear interest from such
January 15 or July 15; provided, however, that if the Company shall default
in the payment of interest due on such January 15 or July 15, then this Note
shall bear interest from the next preceding date to which interest has been
paid or, if no interest has been paid on this Note, from June 29, 1998. The
interest so payable on any January 15 or July 15 will, subject to certain
exceptions provided in the Indenture referred to herein, be paid to the
person in whose
name this Note shall be registered at the close of business on the January 1
prior to such January 15 or the July 1 prior to such July 15 unless such
January 1 or July 1 shall be a Legal Holiday (as defined in said Indenture),
in which event the next preceding day that is not a Legal Holiday. Interest
will be computed on the basis of a 360-day year consisting of twelve 30-day
months.
This Note is one of the duly authorized issue of Notes of the Company,
designated as set forth herein (the "Notes"), limited to the aggregate
principal amount of $_______________, all issued or to be issued under and
pursuant to an Indenture dated as of June 29, 1998, as amended, modified or
supplemented from time to time (as so amended, modified or supplemented, the
"Indenture"), duly executed and delivered by the Company and U S WEST, Inc.
(the "Guarantor") to The First National Bank of Chicago, as trustee (herein
referred to as the "Trustee"), to which Indenture and all Indentures
supplemental thereto reference is hereby made for a description of the
rights, limitation of rights, obligations, duties and immunities thereunder
of the Trustee, the Company, the Guarantor and the Holders (the words
"Holders" or "Holder" meaning the registered holders or registered holder of
the Notes).
In case an Event of Default shall occur and be continuing, the principal
hereof may be declared, and upon such declaration shall become due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Company, the Guarantor
and the Trustee, with the written consent of the Holders of a majority in
principal amount of the outstanding Securities of each series affected by a
supplemental indenture (with each series voting as a class), to enter into a
supplemental indenture to add any provisions to or to change or eliminate any
provisions of the Indenture or of any supplemental indenture or to modify, in
each case in any manner not covered by provisions in the Indenture relating
to amendments and waivers without the consent of Holders, the rights of the
Holders of each such series. The Holders of a majority in principal amount
of the outstanding Securities of each series affected by such waiver (with
each series voting as a class), by notice to the Trustee, may waive
compliance by the Company or the Guarantor with any provision of the
Indenture, any supplemental indenture or the Securities of any such series,
except a Default in payment of the principal of or interest on any Security.
However, without the consent of each Holder affected, an amendment or waiver
may not: (1) reduce the amount of Securities whose Holders must consent to
an amendment or waiver; (2) change the rate of or change the time for payment
of interest on any Security; (3) change the principal of or change the fixed
maturity of any Security; (4) waive a Default in the payment of the principal
of or interest on any Security; (5) make any Security payable in money other
than that stated in the Security; or (6) make any change in the provisions of
the Indenture: (i) with respect to the right of the Holders of a majority in
principal amount of any series of Securities, by notice to the Trustee, to
waive an existing Default with respect to that series and its consequences;
(ii) with respect to the right of any Holder of a Security to receive payment
of principal of and interest on the Security, on or after the respective due
dates expressed in the Security, the right of any Holder of a coupon to
receive payment of interest due as provided in such coupon, or the right to
bring suit for enforcement of any such payments on or after their respective
dates; and (iii) described in this sentence.
This Note will be redeemable at the option of the Company, in whole at
any time or in part from time to time, at a redemption price equal to the
greater of (i) 100% of the principal
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amount of this Note to be redeemed and (ii) the sum, as determined by the
Quotation Agent (as defined below), of the present values of the principal
amount of this Note to be redeemed and the remaining scheduled payments of
interest on the principal amount of this Note to be redeemed from the
redemption date to July 15, 2005 (the "Remaining Life"), in each case
discounted from their respective scheduled payment dates to the redemption
date on a semiannual basis (assuming a 360-day year consisting of 30-day
months) at the Treasury Rate (as defined below) plus 15 basis points, plus in
either case, accrued interest thereon to the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
Remaining Life that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity with the Remaining Life.
"Comparable Treasury Price" means, with respect to any redemption date,
the average of five Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury
Dealer Quotations, or if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means each of: (i) Merrill Lynch Government
Securities, Inc., Goldman, Sachs & Co., J.P. Morgan Securities Inc., Lehman
Brothers Inc. and Morgan Stanley & Co. Incorporated and their respective
successors; PROVIDED, HOWEVER, that if any of the foregoing shall cease to be
a primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third Business Day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual yield to maturity of the Comparable Treasury
Issue, calculated on the third Business Day preceding such redemption date
using a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such
redemption date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to the Holder hereof at its
registered address. Unless the Company defaults in payment of the redemption
price, on and after the redemption date interest will cease to accrue on the
principal amount of this Note called for redemption.
If money sufficient to pay the redemption price with respect to and
accrued interest on the principal amount of this Note to be redeemed on the
redemption date is deposited with the Trustee on or before the redemption
date and certain other conditions are satisfied, then on or
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after such date, interest will cease to accrue on the principal amount of
this Note called for redemption.
Except as provided above, this Note is not redeemable by the Company
prior to maturity and is not subject to any sinking fund.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the place, at the respective times, at the rate, and in the coin or
currency herein prescribed.
No director, officer, employee or stockholder, as such, of the Company
or the Guarantor shall have any liability for any obligations of the Company
under this Note or the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Holder, by accepting
this Note, waives and releases all such liability. The waiver and release
are part of the consideration for the issue of this Note and the Guarantee
endorsed hereon.
The laws of the State of New York shall govern the Indenture and this
Note.
Ownership of Notes shall be proved by the register for the Notes kept by
the Registrar. The Company, the Guarantor, the Trustee and any agent of the
Company may treat the person in whose name a Note is registered as the
absolute owner thereof for all purposes.
Terms used herein without definition that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Indenture referred to herein by the manual signature of one
of its authorized officers, or on behalf of the Trustee by the manual
signature of an authorized officer of the Trustees authenticating agent, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or by facsimile, and its corporate seal or a facsimile of
its corporate seal to be imprinted hereon.
Dated: June 29, 1998
U S WEST CAPITAL FUNDING, INC.
By:
------------------------------
Name:
Title:
(SEAL)
By:
------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein, issued
under the Indenture described herein.
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By:
-----------------------------
Authorized Officer
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GUARANTEE OF U S WEST, INC.
FOR VALUE RECEIVED, U S WEST, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (the "Guarantor"), hereby
unconditionally guarantees to the holder of the Note upon which this
Guarantee is endorsed the due and punctual payment of the principal of and
interest on said Note, when and as the same shall become due and payable,
whether at maturity or otherwise, according to the terms thereof and of the
Indenture referred to therein.
The Guarantor agrees to determine, at least one business day prior to
the date upon which a payment of principal of or interest on said Note is due
and payable, whether U S WEST Capital Funding, Inc. (the "Company") has
available the funds to make such payment as the same shall become due and
payable. In case of the failure of the Company punctually to pay any such
principal or interest, the Guarantor hereby agrees to cause any such payment
to be made punctually when and as the same shall become due and payable,
whether at maturity or otherwise, and as if such payment were made by the
Company.
The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrevocable and absolute, irrespective of the validity,
regularity, or enforceability of said Note or said Indenture, the absence of
any action to enforce the same, any waiver or consent by the holder of said
Note with respect to any provisions thereof, the recovery of any judgment
against the Company or any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge
or defense of a guarantor. The Guarantor hereby waives diligence,
presentment, demand or payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to said Note or
indebtedness evidenced thereby and all demands whatsoever and covenants that
this Guarantee will not be discharged except by complete performance of the
obligations contained in said Note and in this Guarantee.
The Guarantor shall be subrogated to all rights of the holder of said
Note against the Company in respect of any amounts paid by the Guarantor
pursuant to the provisions of this Guarantee; provided, however, that the
Guarantor shall not, without the consent of the holders of all of the Notes
then outstanding, be entitled to enforce or to receive any payments arising
out of, or based upon, such right of subrogation until the principal of and
interest on all Notes of the Company known as "6 1/4% Notes due July 15, 2005"
shall have been paid in full or payment thereof shall have been provided for
in accordance with said Indenture.
Notwithstanding anything to the contrary contained herein, if following
any payment of principal or interest by the Company on the Notes to the
holders of the Notes, it is determined by a final decision of a court of
competent jurisdiction that such payment shall be avoided by a trustee in
bankruptcy (including any debtor-in-possession) as a preference under 11
U.S.C. Section 547 and such payment is paid by such holder to such trustee in
bankruptcy, then and to the extent of such repayment the obligations of the
Guarantor hereunder shall remain in full force and effect.
This Guarantee shall not be valid or become obligatory for any purpose
with respect to a Note until the certificate of authentication of such Note
shall have been signed by the Trustee or on its behalf by the Trustee's
authenticating agent.
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This Guarantee shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, U S WEST, Inc. has caused this Guarantee to be
signed in its corporate name by the signature of two of its officers
thereunto duly authorized and has caused its corporate seal to be affixed
hereunto.
U S WEST, INC.
By:
------------------------------
Name:
Title:
(SEAL)
By:
------------------------------
Name:
Title:
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FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
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Please insert social security number or other identifying number of
assignee:
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Please print or type name and address (including zip code) of
assignee:
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the within Note and all rights thereunder, hereby irrevocably constituting
and appointing _____________________ attorney to transfer said Note of
U S WEST Capital Funding, Inc. on the books of the Company, with full power of
substitution in the premises.
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Dated:
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NOTICE: The signature to this assignment must correspond with the name as
written upon the face of this Note in every particular without alteration or
enlargement or any change whatsoever.
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