-------------------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
MediaOne Finance Trust [ ]
Dated as of [ ], 199[ ]
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TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application. . . . . . . . . . . . . . . . 9
Section 2.2 Lists of Holders of Securities. . . . . . . . . . . . . . . . . 9
Section 2.3 Reports by the Property Trustee . . . . . . . . . . . . . . . .10
Section 2.4 Periodic Reports to Property Trustee. . . . . . . . . . . . . .10
Section 2.5 Evidence of Compliance with Conditions Precedent. . . . . . . .10
Section 2.6 Events of Default; Waiver.. . . . . . . . . . . . . . . . . . .10
Section 2.7 Event of Default; Notice. . . . . . . . . . . . . . . . . . . .12
ARTICLE III
ORGANIZATION
Section 3.1 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.2 Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.3 Purpose.. . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 3.4 Authority.. . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 3.5 Title to Property of the Trust. . . . . . . . . . . . . . . . .14
Section 3.6 Powers and Duties of the Regular Trustees.. . . . . . . . . . .14
Section 3.7 Prohibition of Actions by the Trust and the Trustees. . . . . .18
Section 3.8 Powers and Duties of the Property Trustee.. . . . . . . . . . .19
Section 3.9 Certain Duties and Responsibilities of the Property Trustee. ..22
Section 3.10 Certain Rights of Property Trustee. . . . . . . . . . . . . . .24
Section 3.11 Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .27
Section 3.12 Execution of Documents. . . . . . . . . . . . . . . . . . . . .27
Section 3.13 Not Responsible for Recitals or Issuance of Securities. . . . .27
Section 3.14 Duration of Trust.. . . . . . . . . . . . . . . . . . . . . . .27
Section 3.15 Mergers.. . . . . . . . . . . . . . . . . . . . . . . . . . . .28
i
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.. . . . . . . . . . . .30
Section 4.2 Responsibilities of the Sponsor.. . . . . . . . . . . . . . . .30
Section 4.3 Right to Proceed. . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE V TRUSTEES
Section 5.1 Number of Trustees. . . . . . . . . . . . . . . . . . . . . . .31
Section 5.2 Delaware Trustee. . . . . . . . . . . . . . . . . . . . . . . .32
Section 5.3 Property Trustee; Eligibility.. . . . . . . . . . . . . . . . .32
Section 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Section 5.5 Initial Trustees. . . . . . . . . . . . . . . . . . . . . . . .33
Section 5.6 Appointment, Removal and Resignation of Trustees. . . . . . . .34
Section 5.7 Vacancies among Trustees. . . . . . . . . . . . . . . . . . . .36
Section 5.8 Effect of Vacancies.. . . . . . . . . . . . . . . . . . . . . .36
Section 5.9 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Section 5.10 Delegation of Power.. . . . . . . . . . . . . . . . . . . . . .37
Section 5.11 Merger, Conversion, Consolidation or Succession to Business . .37
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.. . . . . . . . . . . . . . . . . . . . . . . . .38
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.. . . . . . . . . . . .38
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust. . . . . . . . . . . . . .39
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ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities. . . . . . . . . . . . . . . . . . . . .41
Section 9.2 Transfer of Certificates. . . . . . . . . . . . . . . . . . . .41
Section 9.3 Deemed Security Holders.. . . . . . . . . . . . . . . . . . . .42
Section 9.4 Book Entry Interests. . . . . . . . . . . . . . . . . . . . . .42
Section 9.5 Notices to Clearing Agency. . . . . . . . . . . . . . . . . . .43
Section 9.6 Appointment of Successor Clearing Agency. . . . . . . . . . . .43
Section 9.7 Definitive Preferred Security Certificates. . . . . . . . . . .43
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.. . . . . . .44
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.. . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 10.2 Exculpation.. . . . . . . . . . . . . . . . . . . . . . . . . .46
Section 10.3 Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . . .46
Section 10.4 Indemnification.. . . . . . . . . . . . . . . . . . . . . . . .47
Section 10.5 Outside Businesses. . . . . . . . . . . . . . . . . . . . . . .48
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.. . . . . . . . . . . . . . . . . . . . . . . . . .49
Section 11.2 Certain Accounting Matters. . . . . . . . . . . . . . . . . . .49
Section 11.3 Banking.. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 11.4 Withholding.. . . . . . . . . . . . . . . . . . . . . . . . . .50
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 12.2 Meetings of the Holders of Securities; Action by Written
Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . .52
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ARTICLE XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee. . . . . . .54
Section 13.2 Representations and Warranties of Delaware Trustee. . . . . . .55
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 14.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .57
Section 14.3 Intention of the Parties. . . . . . . . . . . . . . . . . . . .58
Section 14.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Section 14.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . .58
Section 14.6 Partial Enforceability. . . . . . . . . . . . . . . . . . . . .59
Section 14.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .59
iv
CROSS-REFERENCE TABLE*
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED DECLARATION
- ------------------- -----------
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(c)
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)
- -----------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MediaOne Finance Trust [ ]
[ ], 199[ ]
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of [ ], 199[ ] 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"), 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 October 5, 1998 (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
Delaware on October 5, 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;
(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.
2
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York or Chicago, Illinois are authorized or
required by law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 DEL. C. Section 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 [ ], 199[ ].
"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 [ ], 199[ ] of the Sponsor in respect of the
Common Securities.
"COMMON SECURITY CERTIFICATE" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Annex II to Exhibit A.
"COVERED PERSON" means:
(a) any officer, director, shareholder, partner, member,
representative, employee or agent of:
3
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
"DEBENTURE GUARANTEE" means the guarantee by the Sponsor of
the Debentures endorsed thereon.
"DEBENTURE GUARANTOR" means the Sponsor in its capacity as
guarantor under the Debenture Guarantee.
"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.
"DIRECT ACTION" has the meaning set forth in Section 3.8(e).
"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.
4
"EVENT OF DEFAULT" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means
(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 June 12, 1998
among the Debenture Issuer, MediaOne Group, Inc., a Delaware corporation, as
guarantor, and Norwest Bank Minnesota, National Association, as trustee, as
supplemented by a [ ] Supplemental Indenture dated as of
[ ], 199[ ] 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,
5
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;
(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 [ ], 199[ ] of the Sponsor in respect of the
Preferred Securities.
"PREFERRED SECURITY" has the meaning specified in Section 7.1.
6
"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).
"PURCHASE AGREEMENT" means the Purchase Agreement for the offering and
sale of Preferred Securities in the form of Exhibit C.
"QUORUM" means a majority of the Regular Trustees or if there are only
two Regular Trustees, both of them.
"REGULAR TRUSTEE" means any Trustee other than the Property Trustee
and the Delaware Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Property Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
7
"SPECIAL EVENT" has the meaning set forth in the terms of the
Securities.
"SPONSOR" means MediaOne Group, Inc., a Delaware corporation or any
permitted successor thereof under the Indenture, in its capacity as sponsor of
the Trust.
"SUCCESSOR PROPERTY TRUSTEE" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3(a).
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of Securities voting together as a single class or, as the
context may require, Holder(s) of Preferred Securities or Common Securities,
voting separately as a class, who vote Securities of a relevant class and the
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents 10% of the above stated liquidation amount of
all Securities of such class.
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
"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.
8
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions;
(b) the Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act;
(c) if and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by 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
9
(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, commencing May [ ], the
Property Trustee shall provide to the Holders of the Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor, the Debenture Issuer, and the Regular Trustees on
behalf of the Trust shall provide to the Property Trustee such documents,
reports and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences provided that if the underlying Event of Default
under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
10
(ii) requires the consent or vote of the holders of greater
than a majority in principal amount of the Debentures
affected thereby (a "Super Majority") to be waived, the
Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Preferred Securities of an Event of Default with
respect to the Preferred Securities shall also be deemed to constitute a waiver
by the Holders of the Common Securities of any such Event of Default with
respect to the Common Securities for all purposes of this Declaration without
any further act, vote or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED THAT, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided
below in the proviso to this Section 2.6(b), the Event of
Default under the Declaration shall also be not waivable;
or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities
are deemed to have waived such Event of Default under the
Declaration as provided below in the proviso to this
Section 2.6(b), the Event of Default under the
11
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 with respect to the Securities known to the Property
Trustee, transmit by mail, first class postage prepaid, to the Holders of the
Securities, notices of all such defaults 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,
12
of the Property Trustee in good faith determine that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 6.01(a)(1) and 6.01(a)(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged
with the administration of the Declaration shall have
obtained written notice of.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "MediaOne Finance Trust [ ]", 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
13
cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust. It is the intention of all of the parties
hereto that the Trust created hereunder constitutes a "grantor trust" for
federal income tax purposes under the Code, and all parties hereto, and the
Holders of the Preferred Securities by the purchase of the Preferred
Securities will be deemed to, agree to treat the Trust with such
characterization. The provisions of this Agreement shall be interpreted
consistently with such characterization.
SECTION 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures, the
Debenture Guarantee and the Property Trustee Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
The Regular Trustees shall have the exclusive power and authority and
duty to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, PROVIDED FURTHER, there shall be no
interests in the Trust other than the Securities and the issuance of Securities
shall be limited to a one-time,
14
simultaneous issuance of both Preferred Securities and Common Securities on
the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange
Commission (the "Commission") the registration statement
on Form S-3 prepared by the Sponsor in relation to the
Preferred Securities, including any amendments thereto
prepared by the Sponsor;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor as necessary in
order to qualify or register all or part of the Preferred
Securities in any State in which the Sponsor has
determined to qualify or register such Preferred
Securities for sale;
(iii) execute and file an application prepared by the Sponsor to
the New York Stock Exchange or any other national stock
exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) execute and file with the Commission a registration
statement on Form 8-A prepared by the Sponsor relating to
the registration of the Preferred Securities under Section
12(b) of the Exchange Act, including any amendments
thereto prepared by the Sponsor; and
(v) execute and enter into the Purchase Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Debentures and the Debenture Guarantee with the
proceeds of the sale of the Preferred Securities and the Common Securities;
PROVIDED, HOWEVER, that the Regular Trustees shall cause legal title to the
Debentures and the Debenture Guarantee to be owned by and held of record in the
name of the Property Trustee for the benefit of the Holders of the Preferred
Securities and the Common Securities;
15
(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;
16
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities or
to enable the Trust to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their discretion to
be necessary or desirable in carrying out the activities of the Trust as set out
in this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes,
provided that such action does not adversely affect the interests of Holders;
and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner which is consistent with the purposes, functions and
characterization for federal income tax purposes of the Trust set out in Section
3.3 and the Regular Trustees shall not take any action which is inconsistent
with the purposes, functions and characterization for federal income tax
purposes of the Trust set forth in Section 3.3.
17
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) Notwithstanding any provision herein to the contrary, the Trust
shall not, and the Trustees (including the Property Trustee) shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in
any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as expressly provided in this Declaration and
Exhibit A hereto, (A) direct the time, method and place of
exercising any trust or power conferred upon the Debenture
Trustee with respect to the Debentures, (B) waive any past
default that is waivable under Section 6.06 of the
Indenture, (C) exercise any right to rescind or annul any
declaration that the principal of all the Deben-
18
tures 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 for
the benefit of the Trust and the Holders of the Securities. The right, title
and interest of the Property Trustee to the Debentures and the Debenture
Guarantee shall vest automatically in each Person who may hereafter be
appointed as Property Trustee as set forth in Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered;
(b) the Property Trustee shall not transfer its right, title and
interest in the Debentures and the Debenture Guarantee to the Regular
Trustees or to the Delaware Trustee (if the Property Trustee does not also
act as Delaware Trustee);
(c) the Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
bank account (the "Property Trustee Account") in the
name of and under the exclusive control of the Property
Trustee on behalf of the Holders of the Securities and,
upon the receipt of payments of funds made in respect of
the Debentures and Debenture Guarantee held by the
Property Trustee, deposit such funds into the Property
Trustee Account and make payments to the Holders of the
Preferred Securities and the Common Securities from the
Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an
account which is maintained with a banking institution
the
19
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. If
the Property Trustee fails to enforce its rights under the Debentures and/or
the Debenture Guarantee after a Holder of Preferred Securities has made a
written request, such Holder may institute a legal proceeding against the
Debenture Issuer and/or the Debenture Guarantor, as the case may be, to
enforce the Property Trustee's rights under the Debentures and/or the
Debenture Guarantee, as the case may be, without first instituting any legal
proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest, premium, if any, or principal on the Debentures on
the date such interest, premium, if any, or principal is otherwise payable
(or in the case of redemption, on the redemption date) or a failure of the
Debenture Guarantor to make a payment under the Debenture Guarantee when
payable, then a Holder of Preferred Securities may
20
directly institute a proceeding for enforcement of payment to such Holder of
the principal of, premium, if any, or interest on, the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action"). Notwithstanding any payments
made to such Holder of Preferred Securities by the Debenture Issuer or the
Debenture Guarantor in connection with a Direct Action, the Debenture Issuer
and the Debenture Guarantor shall remain obligated to pay the principal of
premium, if any, or interest on the Debentures held by the Trust or the
Property Trustee of the Trust, and the Debenture Issuer and the Debenture
Guarantor shall be subrogated to the rights of the Holder of such Preferred
Securities with respect to payments on the Preferred Securities. Except as
provided in the preceding sentences and in the Preferred Securities
Guarantee, the Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures and the
Debenture Guarantee.
(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
21
Agent or additional Paying Agents may be appointed at any time by the
Property Trustee; and
(i) subject to this Section 3.8, the Property Trustee shall have
none of the powers or the authority of the Regular Trustees set forth in
Section 3.6;
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes, functions and
characterization for federal income tax purposes of the Trust set forth in
Section 3.3 and the Property Trustee shall not take any action which is
inconsistent with the purposes, functions and characterization for federal
income tax purposes of the Trust set out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration in Sections 2.2, 2.3, 2.7, 3.8, 3.9, 3.10 and 6.1
and in the terms of the Securities, and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(b) no provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that
may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions
of this Declaration in Sections 2.2, 2.3, 2.7, 3.8,
3.9, 3.10 and 6.1 and in the terms of the
Securities, and the Property Trustee shall not be
liable
22
except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
of the Property Trustee, unless it shall be proved that
the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the
Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee
under this Declaration; and
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of
23
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 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);
24
(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
25
directly or by or through agents or attorneys and the
Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities and the signature of the Property Trustee or
its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be
required to inquire as to the authority of the Property
Trustee to so act, or as to its compliance with any of
the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of
the Securities which instructions may only be given by
the Holders of the same proportion in liquidation amount
of the Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking
such other action until such instructions are received,
and (iii) shall be protected in acting in accordance
with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary
under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in
26
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 Trustees described in this Declaration, except as
mandated by the Business Trust Act. 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
are authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute pursuant to Section
3.6.
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.
27
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c);
(b) the Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with
or into, or be replaced by a trust organized as such under the laws of any
State; PROVIDED, THAT:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as
the Preferred Securities (the "Successor
Securities") so long as the Successor Securities
rank the same as the Preferred Securities rank
with respect to Distributions and payments upon
liquidation, redemption and maturity;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity which possesses the same powers and
duties as the Property Trustee as the Holder of the
Debentures and the Sponsor expressly acknowledges such
trustee of the Successor Entity as the holder of the
Debenture Guarantee;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or other organization on which the Preferred
Securities are then listed;
28
(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
29
any other entity to consolidate, amalgamate, merge with or into, or replace
it if such consolidation, amalgamation, merger or replacement would cause the
Trust or Successor Entity to be classified as other than a grantor trust for
United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all the Common
Securities issued by the Trust, at the same time as the Preferred Securities
are sold, in an amount equal to 3% of the capital of the Trust.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in
the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to
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
30
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Purchase Agreement providing for
the sale of the Preferred Securities.
SECTION 4.3 RIGHT TO PROCEED.
The Sponsor acknowledges the rights of Holders to institute a Direct
Action as set forth in Section 3.8(e) hereto.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees shall initially be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; PROVIDED, HOWEVER, that the number of Trustees shall in
no event be less than three (3); PROVIDED FURTHER that (1) one Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware, (2) there shall be at least two
Trustees who are employees or officers of, or are affiliated with the Sponsor;
and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
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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) (i) the Preferred Securities Guarantee, (ii) the Preferred
Securities Guarantee Agreement dated June 12, 1998 relating to MediaOne
Finance Trust I, (iii) the Preferred Securities Guarantee Agreement dated
June 12, 1998 relating to MediaOne Finance Trust II, (iv) the Preferred
Securities Guarantee Agreement dated September 11, 1995 relating to MediaOne
Financing A, (v) the Preferred Securities Guarantee Agreement dated October
29, 1996 relating to MediaOne Financing B, (vi) the Amended and Restated
Declaration of Trust dated June 12, 1998 of MediaOne Finance Trust I, (vii)
the Amended and Restated Declaration of Trust dated June 12, 1998 of MediaOne
Finance Trust II, (viii) the Amended and Restated Declaration of Trust dated
September 11, 1995 of MediaOne Financing A and (ix) the Amended and Restated
Declaration of Trust dated October 29, 1996 of MediaOne Financing B 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
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Rahn K. Porter
188 Inverness Drive West
Englewood, Colorado 80112
Stephen E. Brilz
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
Attn: Michael J. Majchrzak
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Attn: Corporate Trust Services Division
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
34
accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a
successor Trustee possessing the qualifications to act as
Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular
Trustees and the Sponsor; and
(c) a Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; PROVIDED, HOWEVER,
that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until a Successor
Property Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor
and the resigning Property Trustee; or until the assets of
the Trust have been completely liquidated and the proceeds
thereof distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor
and the resigning Delaware Trustee; and
(d) the Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property
35
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
36
Regular Trustees or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting
has not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of
the Regular Trustees.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section 3.6
including any registration statement or amendment thereto filed with the
Commission or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be bound by this Declaration, or any corporation succeeding to all
or substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
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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 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
38
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
39
amount of the Securities, voting together as a single
class, to file a certificate of cancellation with respect
to the Trust, or the revocation of the charter of the
Sponsor or the Debenture Issuer and the expiration of
90 days after the date of revocation without a
reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, the Debenture Issuer or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in accordance
with the terms of the Securities;
(v) upon the election by the Sponsor, effective upon notice to
the Trust, the Property Trustee and the Delaware Trustee,
to dissolve the Trust in accordance with the terms of the
Securities and all of the Debentures and Debenture
Guarantees endorsed thereon shall have been distributed to
the Holders of Securities in exchange for all of the
Securities; or
(vi) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon the completion of the winding up of the
Trust, one of the Regular Trustees (each Regular Trustee being hereby authorized
to take such action) shall file a certificate of cancellation with the Secretary
of State of the State of Delaware terminating the Trust; and
(c) the provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
40
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.
(a) The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges which may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration and
the documents incorporated by reference herein.
(b) Notwithstanding any other provisions of this Declaration, a
Global Certificate may not be transferred as a whole, except by the Clearing
Agency to a nominee of the Clearing Agency or by the Clearing Agency or any such
nominee to a successor Clearing Agency or a nominee of such successor Clearing
Agency.
41
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
42
by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC
will make book entry transfers among the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants; PROVIDED, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred Securities
have voted on any matter provided for in this Declaration, so long as Definitive
Preferred Securities have not been issued, the Trustees may conclusively rely
on, and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Preferred Security Beneficial Owners' votes or assigning the right to vote on
any matter to any other Persons either in whole or in part.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications, specified herein to be given to the Preferred
Security Holders, to the Clearing Agency, and shall have no notice obligations
to the Preferred Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 9.7 DEFINITIVE PREFERRED SECURITY CERTIFICATES.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6; or
43
(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.
Preferred Security Certificates issued in exchange for a beneficial
interest in a Global Certificate shall be registered in such names and in such
authorized denominations as the Clearing Agency, pursuant to instructions from
Clearing Agency Participants or indirect participants or otherwise, shall
instruct the Property Trustee. The Property Trustee shall deliver such
Preferred Security Certificate to the persons in whose names such Preferred
Securities are so registered in accordance with the instruction of the Clearing
Agency.
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
44
(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.
45
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, except as otherwise set forth in Section 3.9) or
willful misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Persons; or
46
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provide that an Indemnified
Person shall act in a manner that is, or provides terms
that are, fair and reasonable to the Trust or any Holder
of Securities,
the Indemnified Person shall resolve such conflict of interest, take
such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give
any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard
and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 10.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Declara-
47
tion, 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 or resignation or removal of any Trustee.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Debenture Issuer, the Delaware
Trustee and the Property Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Debenture Issuer, the Delaware Trustee, or the Property Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Debenture
Issuer, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
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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.
49
SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; PROVIDED, HOWEVER, that all payments of funds in
respect of the Debentures and the Debenture Guarantee held by the Property
Trustee shall be made directly to the Property Trustee Account and no other
funds of the Trust shall be deposited in the Property Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
PROVIDED, HOWEVER, that the Property Trustee shall designate the sole
signatories for the Property Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust and the Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and only
by, a written instrument approved and executed by the Regular Trustees (or, if
there are
50
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) affect the powers or the rights of the Property
Trustee or the Delaware Trustee without the
written consent of the Property Trustee or the
Delaware Trustee, as the case may be; or
(C) cause the Trust to be deemed to be an Investment
Company which is required to be registered under
the Investment Company Act;
(ii) 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.
51
(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
(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
52
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
53
(iv) unless the Business Trust Act, the Trust Indenture Act,
this Declaration, the terms of the Securities or the
listing rules of any stock exchange on which the Preferred
Securities are then listed or trading, otherwise provides,
the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the
establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee which acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a national banking association with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of
54
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; and
(e) if the Property Trustee also acts as the Delaware Trustee, the
Delaware Trustee under Delaware law is either a natural person who is a resident
of the State of Delaware or if not a natural person, an entity which maintains
its principal place of business in the State of Delaware.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee which acts as Delaware Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as 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
55
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 Delaware 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):
MediaOne Finance Trust [ ]
c/o 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):
56
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):
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.
THE DECLARATION AND THE RIGHTS AND OBLIGATIONS OF THE 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 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
57
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 THE 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, (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.
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.
58
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.
59
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
- -----------------------------
Rahn K. Porter
as Regular Trustee
- -----------------------------
Stephen E. Brilz
as Regular Trustee
- -----------------------------
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By:
--------------------------
Name:
Title:
60
THE FIRST NATIONAL BANK OF CHICAGO
as Property Trustee
By:
------------------------------
Name:
Title:
MEDIAONE GROUP, INC.
as Sponsor
By:
------------------------------
Name:
Title:
61
EXHIBIT A
TERMS OF
[ ]% PREFERRED SECURITIES
[ ]% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [ ], 199[ ] (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
a. PREFERRED SECURITIES. [ ] Preferred Securities
of the Trust with an aggregate liquidation amount with respect to the assets of
the Trust of [ ] Dollars ($[ ]), and a liquidation
amount with respect to the assets of the Trust of $[ ] per Preferred
Security, are hereby designated for the purposes of identification only as
"[ ]% Preferred Securities" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form attached hereto as Annex I, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred
Securities are listed.
b. COMMON SECURITIES. [ ] Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] Dollars ($[ ]), and a liquidation amount
with respect to the assets of the Trust of $[ ] per Common Security, are
hereby designated for the purposes of identification only as "[ ]% 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.
A-1
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 $[ ] 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 [ ] period 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 [ ] Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full [ ] 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 [ ], 199[ ] and will be payable [ ] in
arrears, on [ ] of each year, commencing on [ ], 199[ ], 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 [ ]
consecutive [ ]periods (each, an "Extension Period") and, as a
consequence of such extension, Distributions will also be deferred. Despite
such deferral, [ ]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 [ ] consecutive
[ ] periods. 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
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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 "Certain Terms of the Preferred Securities --
Book-Entry-Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated [ ] (the "Prospectus Supplement") to the
Prospectus dated [ ], 1998 (as so supplemented the "Prospectus") of
the Trust included in the Registration Statement on Form S-3 of the Sponsor,
the Debenture Issuer, the Trust and certain other business trusts. The
relevant record dates for the Common Securities shall be the same record
dates as for the Preferred Securities. If the Preferred Securities shall not
continue to remain in book-entry only form, the relevant record dates for the
Preferred Securities, shall conform to the rules of any securities exchange
on which the securities are listed and, if none, shall be selected by the
Regular Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer or the Sponsor having
failed to make a payment under the Debentures or the Debenture Guarantee, as
the case may be, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
d. In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, an amount equal to the
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aggregate of the stated liquidation amount of $[ ] 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 the redemption price for the Debentures, 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(g)(ii) below.
c. The Debentures are redeemable, in whole or in part, at the option
of the Debenture Issuer, on or after [ ] 200[ ], at a Redemption Price
equal to [ ]% of the principal amount per Debenture, plus, in each case,
accrued and unpaid interest thereon at the date of the redemption for the
Debentures.
d. 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, at a Redemption Price equal
to [ ]%
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of the principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption 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.
e. The following terms used herein shall be defined as follows:
"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.
"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.
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f. 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 [ ] Distribution periods terminating on or
before the date of redemption.
g. In the event that the Sponsor makes the election referred to
in Section 8.1(a)(v) of the Declaration, the Regular Trustees shall dissolve
the Trust and, after paying or making reasonable provision to pay all claims
and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, cause Debentures, held by the Property Trustee, having an
aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on and having the same record date for payment, as the
Securities, to be distributed to the Holders of the Securities in liquidation
of such Holders' interests in the Trust on a Pro Rata basis in accordance
with paragraph 8 hereof. On and from the date fixed by the Regular Trustees
for any distribution of Debentures and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The Depository
Trust Company (the "Depository") or its nominee (or any successor Clearing
Agency or its nominee), as the record Holder of the Preferred Securities,
will receive a registered global certificate or certificates representing the
Debentures and the Debenture Guarantee to be delivered upon such distribution
and (iii) any certificates representing Securities, except for certificates
representing Preferred Securities held by the Depository or its nominee (or
any successor Clearing Agency or its nominee), will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the Coupon Rate of, and accrued and unpaid interest equal to
accrued and unpaid Distributions on such Securities until such certificates
are presented to the Debenture Issuer or its agent for transfer or reissue.
If the Debentures are distributed to Holders of the Securities, pursuant to
the terms of the Indenture, the Debenture Issuer will use its best efforts to
have the Debentures listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
h. 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
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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(h)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed, by first-class mail, postage
prepaid, to Holders of Securities. Each Redemption/Distribution Notice shall
be addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
ii. In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed will be redeemed
Pro Rata from each Holder of Securities, it being understood that, in respect
of Preferred Securities registered in the name of and held of record by DTC
(or any successor Clearing Agency) or any other nominee, the distribution of
the proceeds of such redemption will be made to each Clearing Agency
Participant (or person on whose behalf such nominee holds such securities) in
accordance with the procedures applied by such agency or nominee.
iii. If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice which notice may only be issued if the
Debentures are redeemed as set out in this paragraph 4 (which notice will be
irrevocable) then (A) while the Preferred Securities are in book-entry only
form, with respect to the Preferred Securities, by 12:00 noon, New York City
time, on the redemption date, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will deposit
irrevocably with the Depository (or successor Clearing Agency) funds
sufficient to pay the Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (B) if the Preferred Securities are issued in definitive
form, with respect to the Preferred Securities, and with respect to the
Common Securities, provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Property Trustee will pay the Redemption
Price to the Holders of such Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accrue on the Securities so called
for redemption and all
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rights of Holders of such Securities so called for redemption will cease,
except the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities which have been so called for
redemption. If any date fixed for redemption of Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of Securities is improperly withheld or refused
and not paid either by the Property Trustee or by the Sponsor as guarantor
pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accrue, from the original redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price.
iv. Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in respect of the Preferred
Securities, the Depository or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or if Definitive
Preferred Security Certificates have been issued, to the Holder thereof, and
(B) in respect of the Common Securities to the Holder thereof.
v. Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided the
acquiror is not the Holder of the Common Securities or the obligor under the
Indenture, the Sponsor or any of its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
5. VOTING RIGHTS - PREFERRED SECURITIES.
a. Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
b. Subject to the requirements of the second to last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the
Preferred Securities voting separately as a class may direct the time,
method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or
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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, premium, if any, or
principal on the Debentures on the date such interest, premium, if any, or
principal is otherwise payable (or in the case of redemption, on the
redemption date), then a holder of Preferred Securities may institute a
Direct Action for enforcement of payment to such holder of the principal of,
premium, if any, or interest on, Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such
holder on or after the respective due date specified in the Debentures.
Notwithstanding any payments made to such Holder of Preferred Securities by
the Debenture Issuer or the Debenture Guarantor in connection with a Direct
Action, the Debenture Issuer and the Debenture Guarantor shall remain
obligated to pay the principal of, premium, if any, and interest on the
Debentures held by the Trust or the Property Trustee, and the Debenture
Issuer and the Debenture Guarantor shall be subrogated to the rights of the
Holder of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any
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payment made by the Debenture Issuer or the Debenture Guarantor, as the case
may be, to such Holder in any Direct Action.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of
any meeting at which Holders of Preferred Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor, or by any entity directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
6. VOTING RIGHTS - COMMON SECURITIES.
a. Except as provided under paragraphs 6(b), 6(c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
b. The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
c. Subject to Section 2.6 of the Declaration and only after all
Events of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common
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Securities voting separately as a class may direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee
under the Declaration, including (i) directing the time, method, place of
conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waiving any past default and its consequences
that is waivable under Section 6.06 of the Indenture, or (iii) exercising any
right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable, PROVIDED, HOWEVER, that where a consent
or action under the Indenture would require the consent or act of the Holders
of greater than a majority in principal amount of Debentures affected thereby
(a "Super Majority"), the Property Trustee may only give such consent or take
such action at the direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this paragraph 6(c), the Property Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Common Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Property Trustee fails to enforce its
rights under the Declaration, any Holder of Common Securities may institute a
legal proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Property Trustee or any other Person. 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
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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 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
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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.
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10. 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. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional Securities.
12. 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.
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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 [ ]
[ ]% Preferred Securities.
(liquidation amount $[ ] per Preferred Security)
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MEDIAONE FINANCE TRUST [ ], 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 [ ]% Preferred Securities (liquidation amount $[ ] 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 [ ], 199[ ], 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.
A-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)
A-17
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 [ ]
[ ] Common Securities.
(liquidation amount $[ ] per Common Security)
MEDIAONE FINANCE TRUST [ ], 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 [ ]% Common Securities (liquidation amount $[ ] per
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of [ ], 199[ ], as the same may be amended from time to
time (the "Declaration") including the designation of the terms of the Common
Securities as set forth in 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.
A-18
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.
A-19
IN WITNESS WHEREOF, the Trust has executed this certificate this day
of _____________, 199__.
as Trustee
as Trustee
-------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee) and irrevocably appoints
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A-20
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
EXHIBIT C
PURCHASE AGREEMENT
C-1