-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S9js/J7V84xkvpjRHy2g1o2ikUoabFLSLFqlDHMhg+5jIl8eor66yGKjhFtFIw7D naMW+9YZIeDrxlssci4hyQ== 0000940180-98-000664.txt : 19980612 0000940180-98-000664.hdr.sgml : 19980612 ACCESSION NUMBER: 0000940180-98-000664 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 12 REFERENCES 429: 333-00765 FILED AS OF DATE: 19980611 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELE COMMUNICATIONS INC /CO/ CENTRAL INDEX KEY: 0000925692 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 840588868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-56635 FILM NUMBER: 98646742 BUSINESS ADDRESS: STREET 1: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 BUSINESS PHONE: 3032675500 MAIL ADDRESS: STREET 1: 5619 DTC PARKWAY CITY: ENGLEWOOD STATE: CO ZIP: 80111-3000 FORMER COMPANY: FORMER CONFORMED NAME: TCI LIBERTY HOLDING CO DATE OF NAME CHANGE: 19940620 S-3 1 FORM S-3 As filed with the Securities and Exchange Commission on June 11, 1998 Registration No.333- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TELE-COMMUNICATIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 84-1260157 (State or other jurisdiction (IRS Employer of incorporation or Identification No.) organization) Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 (303) 267-5500 (Address, including zip code and telephone number, including area code, of registrant's principal executive offices) Stephen M. Brett, Esq. Copy to: Tele-Communications, Inc. Elizabeth M. Markowski, Esq. Terrace Tower II Baker & Botts, L.L.P. 5619 DTC Parkway 599 Lexington Avenue Englewood, Colorado 80111-3000 New York, New York 3000 10022-6030 (303) 267-5500 (Name, address, including zip code, and telephone number, including area code, of agent for service) APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement as determined by market conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [X] CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------
PROPOSED MAXIMUM TITLE OF EACH CLASS OF AGGREGATE PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE AGGREGATE AMOUNT OFFERING PRICE AGGREGATE OFFERING REGISTRATION REGISTERED TO BE REGISTERED PER UNIT PRICE(1)(2) FEE - ------------------------------------------------------------------------------------------------------- Debt Securities......... __ __ __ __ Series Preferred Stock, | | | | par value $.01 per | | | | share.................. | | | | Depositary Shares(5).... | | | $1,500,000,000(3) | $442,500(3)(4) Tele-Communications, | | | | Inc. Series A TCI Group | | | | Common Stock, par value | | | | $1.00 per share(6)..... |__ (4) |__ (4) |__ |-- Tele-Communications, | | | | Inc. Series A Liberty | | | | Media Group Common | | | | Stock, par value | | | | $1.00 per share(6)..... | | | $1,000,000,000(3) | $0(3) Tele-Communications, | | | | Inc. Series A TCI | | | | Ventures Group Common | | | | Stock, par value | | | | $1.00 per share(6)..... __| __| __| __|
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (1) In United States dollars or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. (2) Such amount includes (i) the principal amount of any Debt Securities issued at their principal amount and the issue price rather than the principal amount of any Debt Securities issued at an original issue discount, (ii) the initial offering price of shares of Series Preferred Stock, par value $.01 per share ("Series Preferred Stock"), and (iii) the initial offering price for shares of any of the following series of Common Stock, par value $1.00 per share, of Tele-Communications, Inc. ("Common Stock"): Tele-Communications, Inc. Series A TCI Group Common Stock, Tele- Communications, Inc. Series A Liberty Media Group Common Stock, and Tele- Communications, Inc. Series A TCI Ventures Group Common Stock. No separate consideration will be received for shares of Common Stock that are issuable upon conversion of Debt Securities or Series Preferred Stock that are convertible into Common Stock. In no event will the aggregate initial offering price of all securities registered hereby (the "Offered Securities") exceed $2.5 billion. Such Offered Securities may be sold from time to time separately or in any combination of units. (3) Offered Securities having a maximum aggregate initial offering price of $2.5 billion are registered hereby. On February 7, 1996, the registrant paid a filing fee of $344,827.59 in connection with the filing of Registration No. 333-00765, which filing registered $1 billion in maximum aggregate initial offering price of Debt Securities, Series Preferred Stock, Depositary Shares and Series A TCI Group Common Stock (collectively, the "Previously Registered Securities") to which the prospectus included herein relates in part. As of the date of the filing of this registration statement, none of the Previously Registered Securities were sold. Pursuant to Rule 429 of the Securities Act, the registrant (i) is applying the $344,827.59 paid in connection with the prior registration of $1 billion in maximum aggregate initial offering price of Previously Registered Securities to the registration of $1 billion in maximum aggregate initial offering price of Offered Securities and (ii) is paying the $442,500 registration fee associated with $1.5 billion in maximum aggregate initial offering price of Offered Securities, calculated pursuant to Rule 457(o) of the Securities Act. (4) The aggregate amount to be registered and the aggregate offering price per unit have been omitted pursuant to General Instruction II.D. of Form S-3. The registration fee has been calculated in accordance with Rule 457(o) under the Securities Act of 1933. (5) There are being registered an indeterminate number of Depositary Shares as may be issued, from time to time, if the registrant elects to offer fractional interests in shares of any Series Preferred Stock. (6) Includes such presently indeterminate number of shares which may be (a) issuable from time to time, (b) issuable from time to time upon conversion of the Debt Securities and Series Preferred Stock registered hereunder and (c) necessary to adjust the number of shares from time to time reserved for issuance upon such conversion in accordance with the anti-dilution provisions of the Debt Securities or Series Preferred Stock, respectively, as a result of a stock split, stock dividend or other adjustment to or change in the outstanding shares of Common Stock. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. Pursuant to Rule 429 of the Securities Act, the prospectus included herein also relates to the registrant's registration statement on Form S-3, Registration No. 333-00765. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED JUNE 11, 1998 PROSPECTUS TELE-COMMUNICATIONS, INC. DEBT SECURITIES SERIES PREFERRED STOCK DEPOSITARY SHARES SERIES A TCI GROUP COMMON STOCK SERIES A LIBERTY MEDIA GROUP COMMON STOCK SERIES A TCI VENTURES GROUP COMMON STOCK Tele-Communications, Inc. (the "Company" or "TCI") from time to time may offer (i) debentures, notes, bonds or other evidences of indebtedness of the Company ("Debt Securities"), (ii) shares of the Company's Series Preferred Stock, par value $.01 per share ("Series Preferred Stock"), which may be issued in the form of depositary shares ("Depositary Shares") evidencing depositary receipts, and (iii) shares of Tele-Communications, Inc. Common Stock, par value $1.00 per share ("Common Stock") in any of the following series: Tele- Communications, Inc. Series A TCI Group Common Stock, Tele-Communications, Inc. Series A Liberty Media Group Common Stock or Tele-Communications, Inc. Series A TCI Ventures Group Common Stock. (Debt Securities, Series Preferred Stock, Depositary Shares and Common Stock in respect of which this Prospectus is being delivered are collectively referred to as the "Offered Securities"), or any combination of the foregoing, at an aggregate initial offering price not to exceed $2.5 billion (or the equivalent thereof denominated in one or more foreign currencies, foreign currency units or composite currencies) at prices and on terms to be determined at or prior to the time of sale and to be set forth in supplements to this Prospectus. Debt Securities may be offered as convertible or exchangeable Debt Securities which will be convertible as specified in an accompanying supplement to this Prospectus (a "Prospectus Supplement") into shares of Common Stock or exchangeable as specified in a Prospectus Supplement into other securities (whether or not issued by, or the obligation of, the Company) or a combination of cash, other securities and/or property. Debt Securities may be issued as Original Issue Discount Securities to be sold at a substantial discount below their principal amount and, if issued, certain terms thereof will be set forth in a Prospectus Supplement. Debt Securities may be issued in registered form without coupons attached ("Registered Debt Securities"), in bearer form with or without coupons attached ("Bearer Debt Securities") and in the form of one or more global securities ("Global Securities"). See "Description of Debt Securities." Bearer Debt Securities will be offered only to non-United States persons (subject to certain exceptions) and to branches, located outside the United States, of certain United States financial institutions. See "Description of Debt Securities--Limitations on Issuance of Bearer Debt Securities." Debt Securities may be offered as separate series in amounts, at prices and on terms to be determined at the time of sale and set forth in a Prospectus Supplement. Series Preferred Stock may be issued as a series of convertible Series Preferred Stock which, unless previously redeemed or otherwise purchased, will be convertible at any time during the conversion period specified in a Prospectus Supplement into shares of Common Stock. Series Preferred Stock may be offered as separate series in amounts, at prices and on terms to be determined at the time of sale and set forth in a Prospectus Supplement. See "Description of Series Preferred Stock." If the Company elects to issue fractional interests in shares of a series of Series Preferred Stock, such fractional interests will be represented by depositary receipts evidencing Depositary Shares, each equivalent to a fractional interest in a share of such series of Series Preferred Stock. See "Description of Depositary Shares." Shares of Common Stock may be offered in amounts, at market prices prevailing at the time of sale or at prices and on terms to be determined at or prior to the time of sale and set forth in a Prospectus Supplement. See "Description of Capital Stock--Common Stock." Certain terms of the Offered Securities in respect of which this Prospectus is being delivered will be set forth in a Prospectus Supplement. In the case of Debt Securities, the Prospectus Supplement will include, where applicable, the specific designation (including whether senior, senior subordinated or subordinated and whether convertible or exchangeable), aggregate principal amount, maturity (which may be fixed or extendible), interest rate or rates (which may be fixed or variable), if any, and time of payment of interest, if any, authorized denominations, currency or currencies in which principal, premium, if any, and interest are payable, any terms relating to the conversion or exchange of convertible or exchangeable Debt Securities (including the conversion or exchange rate or the conversion or exchange price (together with any adjustments thereto) and the period during which such Offered Securities may be converted or exchanged), any terms for a sinking fund or for redemption, purchase or exchange at the option of the Company or the holder (including the form or method of payment, which may include cash, Debt Securities of another series or other forms of consideration), any covenants or events of default that are in addition to or different from those described herein, the designation and qualification of any trustee with respect to the Debt Securities, other specific terms of the Debt Securities and the terms of the offer and sale thereof. In the case of a series of Series Preferred Stock, the Prospectus Supplement will include the designation, the number of shares being offered, the initial public offering price, any redemption provisions, any conversion or exchange rights, the liquidation preference per share, the dividend rate (or method of calculation thereof), dates on which dividends shall be payable and dates from which dividends shall accrue, and the terms of the offering and sale thereof. In the case of Depositary Shares, the Prospectus Supplement will include the designation of the series of Series Preferred Stock represented thereby, the fraction of a share of such Series Preferred Stock represented by each Depositary Share, the number of Depositary Shares offered, the name of the depositary and the terms of the offering and sale thereof. In the case of Common Stock, the Prospectus Supplement will include the number of shares being offered, the initial public offering price and terms of the offering and sale thereof. The Company may sell Offered Securities to or through underwriters or dealers designated from time to time, which may be a group of underwriters represented by one or more managing underwriters. In addition, the Offered Securities may be sold directly by the Company to other purchasers or through agents. See "Plan of Distribution." The names of any such underwriters, dealers, managing underwriters, purchasers, or agents involved in the sale of the Offered Securities in respect of which this Prospectus is being delivered, the amounts, if any, to be purchased by such persons, the purchase price of the Offered Securities sold, the proceeds to the Company from such sale, and the compensation, if any, of such underwriters, dealers, managing underwriters, purchasers or agents will be set forth in the Prospectus Supplement. The Company reserves the sole right to accept and, together with its agents, from time to time, to reject in whole or in part any proposed purchase of the Offered Securities to be made directly or through agents. See "Plan of Distribution" for possible indemnification arrangements for agents, dealers and underwriters. This Prospectus may not be used to consummate sales unless accompanied by the Prospectus Supplement applicable to the Offered Securities being sold. ---------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------- The date of this Prospectus is June , 1998. AVAILABLE INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission"), Washington, D.C., a registration statement on Form S-3 (Registration No. 333- ) (together with all amendments and exhibits thereto, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Debt Securities, Series Preferred Stock, Depositary Shares and Common Stock that may be offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information pertaining to the Company and the Debt Securities, Series Preferred Stock, Depositary Shares and Common Stock that may be offered hereby, reference is made to the Registration Statement. Statements contained herein concerning the provisions of any document are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the Commission. Each such statement is qualified in its entirety by such reference. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements, information statements and other information with the Commission. Such reports, proxy statements, information statements and other information filed with the Commission under the Exchange Act by the Company can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the Commission located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a site on the World Wide Web that contains reports, proxy and information statements and other information regarding registrants (including the Company) that file electronically with the Commission. The address of the Commission's Web site is http://www.sec.gov. 2 INCORPORATION OF DOCUMENTS BY REFERENCE The following documents have been filed with the Commission by the Company (File No. 0-20421) and are hereby incorporated into this Prospectus by reference and made a part hereof: 1.The Annual Report on Form 10-K of the Company for the year ended December 31, 1997. 2.The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 1998. 3.The Current Reports on Form 8-K of the Company dated February 25, 1998 and March 6, 1998. All documents filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated herein by reference and to be a part hereof from the respective dates of the filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such previous statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, on the written or oral request of any such person, a copy of any or all of the documents incorporated by reference herein, other than certain exhibits to such documents (unless such exhibits are specifically incorporated by reference into the documents which this Prospectus incorporates). Such requests should be addressed to Stephen M. Brett, Esq., Executive Vice President, Secretary and General Counsel, Tele-Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. 3 THE COMPANY The Company, through its subsidiaries and affiliates, is principally engaged in the construction, acquisition, ownership and operation of cable television systems and in the provision of satellite-delivered programming services to various distribution media, principally cable television systems. Based on the number of subscribers at March 31, 1998, the Company is one of the largest providers of basic cable television services in the United States. The Company also has investments in cable and telecommunications operations and television programming in certain international markets as well as investments in companies and joint ventures involved in developing and providing programming for new television and telecommunications technologies. The Company is a Delaware corporation and was incorporated in 1994. TCI Communications, Inc., a wholly owned subsidiary of the Company, and its predecessors have been engaged in the cable television business since the early 1950's. The executive offices of the Company are located at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500. Unless the context indicates otherwise, as used in this Prospectus the "Company" means Tele-Communications, Inc. and its consolidated subsidiaries. USE OF PROCEEDS The net proceeds from the sale of the Offered Securities, together with internally generated funds, may be used (i) to repay, redeem or repurchase outstanding indebtedness of the Company, (ii) for general operations of the Company, including acquisitions, capital expenditures and working capital requirements or (iii) for such other purposes as may be specified in the related Prospectus Supplement. All or a portion of such proceeds may be advanced to affiliates of the Company in the form of loans or as a contribution to capital. RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS The ratio of earnings to combined fixed charges and preferred stock dividends of the Company was 1.46, 1.19 and 1.23 for the years ended December 31, 1996, 1994 and 1993, respectively, and 2.83 for the three months ended March 31, 1998. The ratio of earnings to combined fixed charges and preferred stock dividends of the Company was less than 1.00 for the years ended December 31, 1997 and 1995, and for the three months ended March 31, 1997; thus, earnings available for combined fixed charges were inadequate to cover combined fixed charges and preferred stock dividends for such periods. The amounts of the coverage deficiencies were $158 million and $217 million for the years ended December 31, 1997 and 1995, respectively, and $73 million for the three months ended March 31, 1997. For the ratio calculations, earnings available for fixed charges and preferred stock dividends consists of earnings (losses) before income taxes plus fixed charges (minus capitalized interest and preferred stock dividend requirements of the Company), distributions from and losses of less than 50%-owned affiliates with debt not guaranteed by the Company (net of earnings not distributed of less than 50%-owned affiliates) and minority interests in earnings (losses) of consolidated subsidiaries. Combined fixed charges and preferred stock dividends consist of (i) interest (including capitalized interest) on debt, including interest related to debt guaranteed by the Company of less than 50%-owned affiliates where the investment in such affiliates results in the recognition of a loss, (ii) the Company's proportionate share of interest of 50%-owned affiliates, (iii) that portion of rental expense the Company believes to be representative of interest (one-third of rental expense), (iv) amortization of debt expense, (v) that portion of minority interests in earnings (losses) of consolidated subsidiaries that represents the amount of pretax earnings that would be required to cover preferred stock dividend requirements of consolidated subsidiaries, (vi) that portion of minority interests in earnings (losses) of consolidated subsidiaries that represents dividend requirements on Company- obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debt securities of a subsidiary, and (vii) the amount of pretax earnings that would be required to cover preferred stock dividend requirements of the Company. The Company has guaranteed the debt of certain less than 50%-owned affiliates and certain unaffiliated entities in which it has an interest. Fixed charges of $19 million, $8 million, $8 million, $6 million and $14 million relating to such guarantees for the years ended December 31, 1997, 1996, 1995, 1994 and 1993, respectively, and fixed charges of $6 million and $5 million relating to such guarantees for the three months ended March 31, 1998 and 1997, respectively, have not been included in fixed charges because the investment in such entities does not result in the recognition of a loss and it is not probable that the Company will be required to honor the guarantee. 4 HOLDING COMPANY STRUCTURE The Company is a holding company and its assets consist almost entirely of investments in its subsidiaries. As a holding company, the Company's ability to meet its financial obligations, including any obligation to pay dividend, interest, principal or other payments with respect to Offered Securities, is dependent on the earnings of, or other funds available to, such subsidiaries and the distribution or other payment of such earnings or other funds to the Company in the form of dividends, loans or other advances, payment or reimbursement of management fees and expenses and repayment of loans and advances from the Company. The Company's subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due pursuant to any Offered Securities or to make any funds available therefor, whether by dividends, loans or other payments. The payment of dividends or the making of loans and advances to the Company by its subsidiaries may be subject to statutory or regulatory restrictions, are contingent upon the earnings of those subsidiaries and are subject to various business considerations. Further, certain of the Company's subsidiaries are subject to loan agreements that prohibit or limit the transfer of funds by such subsidiaries to the Company in the form of loans, advances or dividends and require that such subsidiaries' indebtedness to the Company be subordinate to the indebtedness under such loan agreements. The amount of net assets of subsidiaries subject to such restrictions exceeds the Company's consolidated net assets. Moreover, almost all of the consolidated liabilities of the Company have been incurred by its subsidiaries. Therefore, the Company's rights and the rights of its creditors, including holders of any Offered Securities, to participate in the distribution of assets of any subsidiary upon the latter's liquidation or reorganization will be subject to prior claims of the subsidiary's creditors, including trade creditors, except to the extent that the Company may itself be a creditor with recognized claims against the subsidiary (in which case the claims of the Company would still be subject to the prior claims of any secured creditor of such subsidiary and of any holder of indebtedness of such subsidiary that is senior to that held by the Company). At March 31, 1998, the Company's subsidiaries had total Debt (as defined in "Description of Debt Securities--General") of approximately $15.4 billion (including guarantees of indebtedness of others and the unaccreted portion of indebtedness issued at a discount, but excluding indebtedness owed to the Company). 5 DESCRIPTION OF DEBT SECURITIES The Company may offer Debt Securities consisting of Senior Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt Securities, any of which Debt Securities may be issued as convertible or exchangeable Debt Securities, or any combination of the foregoing. The Debt Securities will represent unsecured general obligations of the Company. The Senior Debt Securities will be senior to all subordinated indebtedness of the Company, and pari passu (equally and ratably) with other unsecured, unsubordinated indebtedness of the Company. The Senior Subordinated Debt Securities will be subordinate in right of payment to certain other debt obligations of the Company, pari passu with certain other senior subordinated indebtedness of the Company and senior to certain other subordinated indebtedness of the Company. The Subordinated Debt Securities will be subordinate in right of payment to certain other debt obligations of the Company and pari passu with certain other subordinated indebtedness of the Company. At March 31, 1998, the Company had no Debt (as defined in "Description of Debt Securities--General") (excluding indebtedness to subsidiaries). The Company is a holding company and substantially all of the consolidated liabilities of the Company have been incurred by its subsidiaries. At March 31, 1998, the Company's subsidiaries had total Debt of approximately $15.4 billion (including guarantees of indebtedness of others and the unaccreted portion of indebtedness issued at a discount, but excluding indebtedness owed to the Company). At that date, the Company's subsidiaries also had an aggregate of approximately $2.8 billion in undrawn lines of credit (excluding amounts related to lines of credit which provide availability to support commercial paper). The Debt Securities will be effectively subordinated to all existing and future liabilities, including trade payables, of the Company's subsidiaries, except to the extent that the Company may itself be a creditor with recognized claims against such subsidiary. See "Holding Company Structure." The Senior Debt Securities will be issued under an Indenture to be executed by the Company and a trustee designated in accordance with the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") (the "Senior Indenture"); the Senior Subordinated Debt Securities will be issued under an Indenture to be executed by the Company and a trustee designated in accordance with the Trust Indenture Act (the "Senior Subordinated Indenture"); and the Subordinated Debt Securities will be issued under an Indenture to be executed by the Company and a trustee designated in accordance with the Trust Indenture Act (the "Subordinated Indenture"). In this Prospectus, the Senior Indenture, the Senior Subordinated Indenture and the Subordinated Indenture are sometimes collectively referred to as the Indentures and individually as an Indenture and the Trustee under the Senior Indenture, the Trustee under the Senior Subordinated Indenture and the Trustee under the Subordinated Indenture are sometimes collectively referred to as the Trustees and individually as a Trustee. The terms of the Senior Debt Securities, the Senior Subordinated Debt Securities and the Subordinated Debt Securities include those stated in the respective Indentures and in any supplemental indenture, and those made part of the Indentures by reference to the Trust Indenture Act, as in effect on the date of the Indentures. The Indentures (or form thereof, as the case may be) are filed as exhibits to the Registration Statement. The Debt Securities are subject to all such terms and holders of Debt Securities are referred to the respective Indentures and the Trust Indenture Act for a statement of such terms. See "Additional Information." The following summaries of certain provisions of the Indentures do not purport to be complete and are subject to, and qualified in their entirety by reference to, all provisions of the Indentures. As used in this section "Description of Debt Securities," unless the context indicates otherwise, the term "Company" means Tele-Communications, Inc. and does not include any of its subsidiaries. All other capitalized terms used in this section and not otherwise defined have the meanings assigned to them in the Indentures. Whenever particular sections or defined terms of each Indenture are referred to, such sections or defined terms are incorporated by reference as part of the statements made, and such statements are qualified in their entirety by such reference. GENERAL The Indentures do not limit the amount of Debt Securities which can be issued thereunder and provide that Debt Securities may be issued in one or more series, in such form, with such terms and up to the aggregate principal amount authorized from time to time by the Company. (Sections 2.01 and 2.02 of the Indentures) 6 Reference is made to the Prospectus Supplement for the following terms of the Offered Securities consisting of Debt Securities: (i) the designation (including whether they are Senior Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt Securities), aggregate principal amount, authorized denominations and currency or currencies in which principal, premium, if any, and interest on the Offered Securities are payable; (ii) whether the Offered Securities are to be issuable initially in temporary global form and whether any of the Offered Securities are issuable in permanent global form as Global Securities; (iii) whether the Offered Securities are to be issuable as Registered Debt Securities or Bearer Debt Securities or both; (iv) the index or indices used to determine the amount of payments of principal, premium, if any, and interest on the Offered Securities; (v) the percentage of their principal amount at which such Offered Securities will be issued; (vi) the date on which the Offered Securities will mature (which may be fixed or extendible); (vii) the rate or rates (which may be fixed or variable) per annum, if any, at which the Offered Securities will bear interest and the date from which such interest will accrue; (viii) the times at which any such interest will be payable and with respect to Registered Debt Securities the record date for the interest payable on any interest payment date; (ix) any mandatory or optional sinking fund or analogous provisions; (x) the date or dates, if any, on or after which, or the circumstances under which, and the price or prices (and form or method of payment thereof) at which the Offered Securities may be redeemed, purchased or exchanged at the option of the Company or any holder; (xi) any terms relating to the conversion of convertible Debt Securities, including the conversion rate or the conversion price (together with any adjustments thereto) and the period during which such Offered Securities may be so converted; (xii) any terms relating to the exchange of exchangeable Debt Securities, including the exchange rate or the exchange price (together with any adjustments thereto) and the period during which such Offered Securities may be so exchanged; (xiii) if any covenants or Events of Default that are in addition to or different from those described herein; and (xiv) any other specific terms. Reference is made to the Prospectus Supplement with respect to the designation and qualification of the Trustee under each Indenture. The Prospectus Supplement relating to any Offered Securities consisting of Debt Securities will also set forth the aggregate amount of Debt of the Company as of the most recent practicable date and (i), in the case of Offered Securities consisting of Senior Subordinated Debt Securities, the amount of such Debt that would be senior to or pari passu with such Senior Subordinated Debt Securities and (ii), in the case of Offered Securities consisting of Subordinated Debt Securities, the amount of such Debt that would be senior to or pari passu with such Subordinated Debt Securities. If the purchase price of any Offered Securities consisting of Debt Securities is denominated in one or more foreign currencies, foreign currency units or composite currencies, or if the principal, premium, if any, and interest on any such Offered Securities are payable in one or more foreign currencies, foreign currency units or composite currencies, the restrictions, elections, general tax considerations, specific terms and other information with respect to such Offered Securities and such foreign currency or currencies or foreign currency unit or units or composite currencies will be set forth in the applicable Prospectus Supplement. Debt Securities may be issued under the Indentures as Original Issue Discount Securities to be sold at a substantial discount below their principal amount ("original issue discount"). The issue price of Offered Securities that are Original Issue Discount Securities, the amount of the original issue discount with respect thereto, the manner and rate or rates per annum (which may be fixed or variable) at which such original issue discount shall accrue, the yield to maturity represented thereby, the date or dates from or to which or period or periods during which such original issue discount shall accrue, the portion of the principal amount of such Offered Securities that will be payable upon acceleration of the maturity thereof or upon the optional or mandatory redemption, purchase or exchange thereof, and any other specific terms thereof will be described in the Prospectus Supplement relating thereto, together with special federal income tax and other considerations applicable to such Offered Securities. As used in the Indentures, "Debt" of any person means: (1) any indebtedness of such person (i) for borrowed money or (ii) evidenced by a note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any property or assets, including securities; (2) any guarantee by such person of any indebtedness of others described in the preceding clause (1); and (3) any amendment, extension, renewal or refunding of any such indebtedness or guarantee. 7 Nothing in any of the Indentures affords holders of Debt Securities protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving the Company or in the event of a change of control of the Company. SENIOR SUBORDINATED DEBT SECURITIES The following provisions will apply to Offered Securities that are Senior Subordinated Debt Securities unless otherwise provided in the Prospectus Supplement for such Offered Securities. Subordination. The indebtedness evidenced by the Senior Subordinated Debt Securities will be subordinate to the prior payment in full of all Senior Debt as described below. The Indenture does not limit Senior Debt or any other debt, secured or unsecured, of the Company or any subsidiary, except as described under "--Limitation on Subordinated Debt Superior to the Senior Subordinated Debt Securities" below. Upon maturity (by acceleration or otherwise) of any Senior Debt, payment in full must be made on such Senior Debt (or duly provided for) before any payment is made on or in respect of the Senior Subordinated Debt Securities (except payments made in capital stock of the Company or in warrants, rights or options to purchase or acquire capital stock of the Company, sinking fund payments made in Senior Subordinated Debt Securities acquired by the Company before the maturity of such Senior Debt, and payments made through the exchange of other debt obligations of the Company for such Senior Subordinated Debt Securities in accordance with the terms of such Senior Subordinated Debt Securities provided that such Debt obligations are subordinated to Senior Debt at least to the extent that the Senior Subordinated Debt Securities for which they are exchanged are so subordinated in accordance with the Indenture). During the continuance of any default in payment of the principal of, premium, if any, interest on, or other amounts due in respect of, any Senior Debt, no payment may be made by the Company on, or in respect of, the Senior Subordinated Debt Securities (except payments made in capital stock of the Company or in warrants, rights or options to purchase or acquire capital stock of the Company, sinking fund payments made in Senior Subordinated Debt Securities acquired by the Company before such default and notice thereof, and payments made through the exchange of other debt obligations of the Company for such Senior Subordinated Debt Securities in accordance with the terms of such Senior Subordinated Debt Securities provided that such debt obligations are subordinated to Senior Debt at least to the extent that the Senior Subordinated Debt Securities for which they are exchanged are so subordinated in accordance with the Indenture). Upon any distribution of assets of the Company in any dissolution, winding up, liquidation or reorganization of the Company, payment of all amounts due in respect of the Senior Subordinated Debt Securities will be subordinated, to the extent and in the manner set forth in the Indenture, to the prior payment in full of all Senior Debt. Such subordination will not prevent the occurrence of any Event of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the Senior Subordinated Indenture) Securities Senior to Junior Subordinated Debt. The indebtedness evidenced by the Senior Subordinated Debt Securities will be superior in right of payment to all Junior Subordinated Debt as described below. Upon maturity (by acceleration or otherwise) of the Senior Subordinated Debt Securities of any series, payment in full must be made thereon, or duly provided for, before any payment is made on or in respect of any Junior Subordinated Debt (except payments made in capital stock of the Company or in warrants, rights or options to purchase or acquire capital stock of the Company, sinking fund payments made in instruments evidencing Junior Subordinated Debt of the same issue acquired before the maturity of the Senior Subordinated Debt Securities of such series, and payments made through the exchange of other debt obligations of the Company for such Junior Subordinated Debt in accordance with the terms of such Junior Subordinated Debt provided that such debt obligations are subordinated to the Senior Subordinated Debt Securities at least to the extent that the Junior Subordinated Debt for which they are exchanged is so subordinated in accordance with the Indenture). During the continuance of any default in payment of the principal of, premium, if any, interest on, or other amounts due in respect of, the Senior Subordinated Debt Securities of any series, no payment may be made by the Company on, or in respect of, any Junior Subordinated Debt (except payments made in capital stock of the Company or in warrants, rights or options to purchase or acquire capital stock of the Company, sinking fund payments made in instruments evidencing Junior Subordinated Debt of the same issue acquired before such default and notice 8 thereof, and payments made through the exchange of other debt obligations of the Company for such Junior Subordinated Debt in accordance with the terms of such Junior Subordinated Debt provided that such debt obligations are subordinated to the Senior Subordinated Debt Securities at least to the extent that the Junior Subordinated Debt for which they are exchanged is so subordinated in accordance with the Indenture). Upon any distribution of assets of the Company in any dissolution, winding up, liquidation or reorganization of the Company, holders of the Senior Subordinated Debt Securities will be entitled to receive payment in full of all amounts due in respect thereof before the holders of any Junior Subordinated Debt are entitled to receive any payment on account of such Junior Subordinated Debt. (Section 4.05 of the Senior Subordinated Indenture) Limitation on Subordinated Debt Superior to the Senior Subordinated Debt Securities. As long as any Senior Subordinated Debt Securities remain outstanding, the Company may not create or incur any Debt which is subordinate or junior in right of payment to any Senior Debt if such Debt is superior in right of payment to the Senior Subordinated Debt Securities. (Section 4.06 of the Senior Subordinated Indenture) Definitions. The following are certain of the terms defined in the Senior Subordinated Indenture (Sections 4.05 and 10.01): "Junior Subordinated Debt" means the principal of (premium, if any) and interest on Debt of the Company created or incurred after the date of the Indenture which by its terms is subordinate in right of payment to the Senior Subordinated Debt Securities, including any Subordinated Debt Securities issued under the Subordinated Indenture. "Senior Debt" means the principal of (premium, if any) and interest on Debt of the Company outstanding at any time other than (i) the Senior Subordinated Debt Securities, (ii) any Subordinated Debt Securities issued under the Subordinated Indenture, and (iii) Debt which by its terms is not superior in right of payment to the Senior Subordinated Debt Securities. SUBORDINATED DEBT SECURITIES The following provisions will apply to Offered Securities that are Subordinated Debt Securities unless otherwise provided in the Prospectus Supplement for such Offered Securities: Subordination. The indebtedness evidenced by the Subordinated Debt Securities will be subordinate to the prior payment in full of all Senior Debt as described below. The Indenture does not limit Senior Debt or any other debt, secured or unsecured, of the Company or any subsidiary. Upon maturity (by acceleration or otherwise) of any Senior Debt, payment in full must be made on such Senior Debt (or duly provided for) before any payment is made on or in respect of the Subordinated Debt Securities (except payments made in capital stock of the Company or in warrants, rights or options to purchase or acquire capital stock of the Company, sinking fund payments made in Subordinated Debt Securities acquired by the Company before the maturity of such Senior Debt, and payments made through the exchange of other debt obligations of the Company for such Subordinated Debt Securities in accordance with the terms of such Subordinated Debt Securities provided that such debt obligations are subordinated to Senior Debt at least to the extent that the Subordinated Debt Securities for which they are exchanged are so subordinated in accordance with the Indenture). During the continuance of any default in payment of the principal of, premium, if any, interest on, or other amounts due in respect of, any Senior Debt, no payment may be made by the Company on, or in respect of, the Subordinated Debt Securities (except payments made in capital stock of the Company or in warrants, rights or options to purchase or acquire capital stock of the Company, sinking fund payments made in Subordinated Debt Securities acquired by the Company before such default and notice thereof, and payments made through the exchange of other debt obligations of the Company for such Subordinated Debt Securities in accordance with the terms of such Subordinated Debt Securities provided that such debt obligations are subordinated to Senior Debt at least to the extent that the Subordinated Debt Securities for which they are exchanged are so subordinated in accordance with the Indenture). Upon any distribution of assets of the Company in any dissolution, winding up, liquidation or reorganization of the Company, payment of all amounts due in respect of the Subordinated Debt Securities will be subordinated, to the extent and in the manner set forth in the Indenture, to the prior payment in full of all 9 Senior Debt. Such subordination will not prevent the occurrence of any Event of Default. (Sections 10.01, 10.02, 10.03 and 10.11 of the Indenture) "Senior Debt" means the principal of (premium, if any) and interest on Debt of the Company outstanding at any time other than (i) the Subordinated Debt Securities and (ii) Debt which by its terms is not superior in right of payment to the Subordinated Debt Securities. (Section 10.01 of the Subordinated Indenture) DENOMINATION AND FORM Unless otherwise indicated in the Prospectus Supplement, the Offered Securities will be Registered Debt Securities denominated in U.S. Dollars and will be issued only in denominations of $1,000 and integral multiples of $1,000. (Section 2.03 of the Senior Subordinated and Subordinated Indentures and Sections 2.01 and 2.03 of the Senior Indenture) Under the Senior Indenture, Debt Securities of any series may be issuable as Registered Debt Securities, Bearer Debt Securities (with or without coupons attached) or both, and may be issuable in whole or in part in the form of one or more Global Securities. In addition, the Senior Indenture provides that Debt Securities may be denominated or payable in one or more foreign currencies, foreign currency units or composite currencies. (Section 2.02 of the Senior Indenture) Unless otherwise indicated in the applicable Prospectus Supplement, Bearer Debt Securities denominated in U.S. Dollars will be issued only in the denomination of $5,000 with coupons attached. (Sections 2.01 and 2.03 of the Senior Indenture) A Global Security will be issued in a denomination equal to the aggregate principal amount of outstanding Debt Securities represented by such Global Security. (Section 2.10 of the Senior Indenture and Section 2.15 of the Senior Subordinated and the Subordinated Indentures) The Prospectus Supplement relating to a series of Debt Securities denominated other than in U.S. Dollars will specify the authorized denominations thereof. During the "restricted period," as defined in Treasury Regulation Section 1.163-5(c)(2)(i)(D)(7), no Bearer Debt Security may be offered or sold (or resold in connection with its original issuance) in the United States or its possessions or to a United States person (subject to certain exceptions). Further, no Bearer Debt Security may be mailed or otherwise delivered to any location in the United States or its possessions in connection with a sale that occurred during the restricted period. Offered Securities that are Bearer Debt Securities will be subject to certification requirements as to the ownership of such Bearer Debt Security (including beneficial interests in a Global Security representing such Bearer Debt Security) which will be described in the applicable Prospectus Supplement. See "Limitations on Issuance of Bearer Debt Securities." REGISTRAR, PAYING AGENT, CONVERSION AGENT, EXCHANGE AGENT The Company will maintain an office or agency where Registered Debt Securities of each series may be presented for registration of transfer or for exchange ("Registrar"), an office or agency where Debt Securities of each series may be presented for payment ("Paying Agent"), an office or agency where Debt Securities of each series that is convertible may be presented for conversion ("Conversion Agent") and an office or agency where Debt Securities of each series that is exchangeable may be presented for exchange ("Exchange Agent"). The Company may have one or more co-Registrars, one or more additional Paying Agents, one or more additional Conversion Agents and one or more additional Exchange Agents with respect to any series of Debt Securities and the Company or any of its subsidiaries may act as Paying Agent, Registrar or co-Registrar, Conversion Agent or Exchange Agent. Unless otherwise indicated in an applicable Prospectus Supplement, each Trustee will initially act as Paying Agent and Registrar for each series of Debt Securities issued under its respective Indenture, as Conversion Agent for any series that is convertible and as Exchange Agent for any series that is exchangeable. The Company may change any Paying Agent, Registrar or co-Registrar, Conversion Agent or Exchange Agent at any time without notice to the holders of Debt Securities, except as described below with respect to Debt Securities issued under the Senior Indenture. The Company will promptly notify the Trustee of the name and address of any such Agent. (Section 2.05 of the Indentures) The Senior Indenture also provides that if Debt Securities of a series are issuable as Bearer Debt Securities, the Company will maintain (i) in the Borough of Manhattan, The City of New York, an office or agency where 10 any Registered Debt Securities of that series may be presented or surrendered for payment and for registration of transfer, where Debt Securities of that series may be surrendered for exchange and where Bearer Debt Securities of that series and related coupons may be presented or surrendered for payment in the circumstances described under "Payment" below, and (ii) subject to any laws or regulations applicable thereto, in a place of payment for Debt Securities of that series located outside the United States, an office or agency where any Registered Debt Securities of that series may be surrendered for registration of transfer, where Debt Securities of that series may be surrendered for exchange and where Debt Securities of that series and any related coupons may be presented and surrendered for payment, provided that if the Debt Securities of that series are listed on The International Stock Exchange of the United Kingdom and the Republic of Ireland, the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, the Company will maintain a Paying Agent for the Debt Securities of that series in London, Luxembourg or any other required city located outside the United States, as the case may be, so long as the Debt Securities of that series are listed on such exchange. Any Paying Agents outside the United States initially designated by the Company for the Offered Securities will be named in the applicable Prospectus Supplement. The Company will promptly notify the Trustee and the holders of Debt Securities of a series of the location and any change in the location of any office or agency which it is required to maintain for the Debt Securities of such series. (Section 4.01 of the Senior Indenture) TRANSFER AND EXCHANGE Registered Debt Securities of any series (other than a Global Security, except as provided under "Global Securities") will be exchangeable at the option of the holder for other Registered Debt Securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor. (Section 2.08 of the Indentures) In addition, if Debt Securities of any series issued under the Senior Indenture are issuable as both Registered Debt Securities and Bearer Debt Securities, then, if so provided with respect to the Debt Securities of such series, at the option of the holder and subject to the terms of such Indenture, Bearer Debt Securities (with, except as provided below, all related unmatured coupons and all related matured coupons in default) of such series will be exchangeable for Registered Debt Securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor. Bearer Debt Securities surrendered in exchange for Registered Debt Securities between a regular record date or, in certain circumstances, a special record date, for an interest payment and the relevant interest payment date shall be surrendered without the coupon relating to such interest payment date attached and interest will not be payable on such interest payment date in respect of the Registered Debt Security issued in exchange for such Bearer Debt Security, but will be payable only to the holder of such coupon in accordance with the terms of the Senior Indenture. Unless otherwise specified in the applicable Prospectus Supplement, Bearer Debt Securities will not be issued in exchange for Registered Debt Securities. (Section 2.08 of the Senior Indenture) Debt Securities of any series may be surrendered for exchange as provided above, and Registered Debt Securities of any series (other than a Global Security, except as provided under "Global Securities") may be surrendered for registration of transfer, at the office or agency designated by the Company for such purpose with respect to such series of Debt Securities. Bearer Debt Securities will be transferable by delivery. (Section 2.14 of the Senior Indenture) Every Registered Debt Security presented or surrendered for registration of transfer or for exchange shall be duly endorsed or accompanied by appropriate transfer documents duly executed. No service charge will be made for any registration of transfer or exchange of Debt Securities, but the Company may require payment of a sum sufficient to cover any taxes and other governmental charges that may be imposed in relation thereto. (Section 2.08 of the Indentures) The Company and the Registrar need not transfer or exchange any Debt Securities selected for redemption or purchase (except, in the case of Debt Securities to be redeemed or purchased in part, the portion thereof not to be redeemed or purchased) or any Debt Securities in respect of which a notice requiring the purchase or redemption thereof by the Company at the option of the holder thereof has been given and not withdrawn by such holder in accordance with the terms of such Debt Securities (as described, if applicable, in the Prospectus Supplement) (except, in the case of Debt Securities to be so purchased or redeemed in part, the portion thereof 11 not to be so purchased or redeemed). (Section 2.08 of the Indentures) A Bearer Debt Security so selected for redemption or purchase or in respect of which a notice requiring the redemption or purchase thereof by the Company at the option of the holder thereof has been given and not so withdrawn may however, if so provided with respect to the Debt Securities of such series, be exchanged for a Registered Debt Security of that series and like tenor, provided that such Registered Debt Security is simultaneously surrendered for redemption or purchase, as the case may be. (Section 2.08 of the Senior Indenture) The Senior Subordinated Indenture and the Subordinated Indenture also provide that the Registrar need not transfer or exchange any Debt Securities of a particular series during a period of 15 days before a selection of Debt Securities of such series to be redeemed. (Section 2.08 of the Senior Subordinated and the Subordinated Indentures) The Senior Indenture provides that the Company shall not be required to issue, register the transfer of or exchange Debt Securities of any series during a period beginning at the opening of business 15 days before any selection of Debt Securities of that series to be redeemed and ending at the close of business on (i) if Debt Securities of that series are issuable only as Registered Debt Securities, the date of the mailing of the relevant notice of redemption, and (ii) if Debt Securities of that series are issuable as Bearer Debt Securities, the date of the first publication of the relevant notice of redemption or, if Debt Securities of that series are also issuable as Registered Debt Securities and there is no publication, the mailing of the relevant notice of redemption. (Section 2.08 of the Senior Indenture) Prior to due presentment of a Registered Debt Security for registration to transfer, the person in whose name such Registered Debt Security is registered may be treated as the owner of it for all purposes. (Section 2.14 of the Indentures) The bearer of any Bearer Debt Security and the bearer of any coupon appertaining thereto may be treated as the owner of such Bearer Debt Security or coupon for all purposes. (Section 2.14 of the Senior Indenture) GLOBAL SECURITIES The Indentures provide that the Debt Securities of any series thereunder may be issued in whole or in part in the form of one or more Global Securities, which Global Securities may be issued in registered form (or, in the case of Senior Debt Securities, bearer form) and in either temporary or permanent form. (Sections 2.10 and 2.11 of the Senior Indenture and Sections 2.11 and 2.15 of the Senior Subordinated and Subordinated Indentures) Each Global Security will be deposited with and, if it is issued in registered form, will be registered in the name of the depositary (or a nominee of the depositary) identified in the applicable Prospectus Supplement. (Section 2.10 of the Senior Indenture and Section 2.15 of the Senior Subordinated and Subordinated Indentures) So long as the depositary for a Global Security in registered form, or its nominee, is the registered owner of the Global Security, the depositary or its nominee, as the case may be, will be considered the sole owner of the Debt Securities represented by such Global Security for all purposes under the Indenture. (Section 2.14 of the Indentures) Unless and until it is exchanged in whole or in part for Debt Securities in definitive form, a Global Security may not be transferred except as a whole by the depositary for such Global Security to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by the depositary or any nominee to a successor depositary or any nominee of such successor. (Section 2.08 of the Indentures) Unless otherwise specified in the applicable Prospectus Supplement, if the depositary with respect to any Global Security is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by the Company within 90 days of such time, or if the Company, in its sole discretion, at any time determines that any series of Debt Securities issued or issuable in the form of a Global Security shall no longer be represented by such Global Security, then in either such event the Global Security shall be exchanged for Debt Securities in definitive form pursuant to the applicable Indenture. Further, if so specified by the Company with respect to the Debt Securities of a series and described in the applicable Prospectus Supplement, an owner of a beneficial interest in a Global Security representing Debt Securities of such series may, on terms acceptable to the Company and the depositary for such Global Security, receive Debt Securities of such series in definitive form. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery in definitive form of Debt Securities in authorized denominations and of like tenor of the series represented by such Global Security, equal in principal amount to such beneficial interest, and 12 to have such Debt Securities registered in its name (if the Debt Securities of such series are issuable as Registered Debt Securities). (Section 2.08 of the Indentures) See, however, "--Limitations on Issuance of Bearer Debt Securities" below for a discussion of certain restrictions on the delivery of a Bearer Debt Security in definitive form in exchange for an interest in a Global Security. Except as described above, unless otherwise specified in the applicable Prospectus Supplement, owners of beneficial interests in a Global Security will not be entitled to have Debt Securities of the series represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Debt Securities of such series in definitive form and will not be considered the owners or holders thereof under the applicable Indenture. Any specific terms of the depositary arrangement with respect to a series of Debt Securities or any part thereof will be described in the applicable Prospectus Supplement. The Company anticipates that the following provisions will apply to all depositary arrangements. Upon the issuance of a Global Security, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the Debt Securities represented by such Global Security to the accounts of participants. Ownership of beneficial interests in a Global Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary (with respect to beneficial interests of participants in the depositary), or by participants in the depositary or persons that may hold interest through such participants (with respect to beneficial interests of persons other than participants in the depositary). Ownership of beneficial interests in a Global Security will be limited to participants or persons that hold interests through participants. Subject to the restrictions discussed under "Limitations on Issuance of Bearer Debt Securities" below, payments of the principal of and any premium and interest on Debt Securities registered in the name of or held by a depositary or its nominee will be made to the depositary or its nominee, as the case may be, as the registered owner or the holder of the Global Security representing such Debt Securities. None of the Company, the Trustee, any Paying Agent or the Registrar for such Debt Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in Global Security for such debt Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. (Section 2.14 of the Indentures) The Company expects that the depositary for Debt Securities of a series, upon receipt of any payment of principal, premium or interest in respect of a Global Security, will credit immediately participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security as shown on the records of such depositary. The Company also expects that payments by participants to owners of beneficial interests in such Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participants. With respect to a Global Security that represents in whole or in part Debt Securities of a series that are issuable as Bearer Debt Securities, receipt by owners of beneficial interests in such Global Security of payments in respect of such Global Security will be subject to the restrictions discussed under "Limitations on Issuance of Bearer Debt Securities" below. LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES In compliance with United States federal tax laws and regulations, Bearer Debt Securities (including beneficial interests in a Global Security that represents Bearer Debt Securities) may not be offered or sold (or resold in connection with their original issuance) during the "restricted period," as defined in Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7), in the United States or its possessions or to United States persons (each as defined below) other than to (i) a Qualifying Foreign Branch of a United States Financial Institution (as defined below), (ii) a United States person who acquires and holds the obligation through the Qualifying Foreign 13 Branch of a United States Financial Institution, (iii) a United States office of an "exempt distributor," as defined in Treasury Regulation Section 1.163- 5(c)(2)(i)(D)(5), (iv) the United States office of an international organization, as defined in Section 7701(a)(18) of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations thereunder, or (v) the United States office of a foreign central bank, as defined in Section 895 of the code and the regulations thereunder. In addition, Bearer Debt Securities may not be delivered within the United States or its possessions in connection with a sale that occurred during the restricted period. Any underwriters, agents and dealers participating in the offering of Offered Securities must agree that they will not offer any Bearer Debt Securities for sale or resale in the United States or its possessions or the United States persons (other than a person specified in clause (i), (ii), (iii), (iv) or (v) above) or deliver Bearer Debt Securities within the United States or its possessions. The term "Qualifying Foreign Branch of a United States Financial Institution" means a branch located outside the United States of a United States financial institution (as defined in Treasury Regulation Section 1.165-12(c)(1)(v) before January 1, 1999 and in Treasury Regulation Section 1.165-12(c)(1)(iv) on and after such date) that provides a certificate within a reasonable time (or a blanket certificate in the year the Debt Security is issued or either of the preceding two calendar years) stating that it agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder. The term "United States person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States federal income taxation regardless of its source and a trust if (i) a court in the United States is able to exercise primary supervision over the administration of the trust, and (ii) one or more United States fiduciaries have authority to control all substantial decisions of the trust. The term "United States" means the United States of America (including the States and the District of Columbia), and the term "possessions" includes, but is not limited to, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands. United States federal tax laws and regulations also require that the owner of an obligation issuable in bearer form or the financial institution (as defined in the preceding paragraph) or clearing organization through which the owner directly or indirectly holds such obligation must provide the issuer of the obligation with a certificate on the earlier of the date of the first actual payment of interest on the obligation or the date of delivery by the issuer of the obligation in definitive form stating that on such date the obligation is owned by (a) a person that is not a United States person, (b) a person described in clause (i) or (ii) of the preceding paragraph, or (c) a financial institution for purposes of resale during the restricted period, but not for resale directly or indirectly to a United States person or to a person within the United States or its possessions. A certificate described in clause (a) or (b) above may not be given with respect to an obligation that is owned by a financial institution for purposes of resale during the restricted period. When the required certificate is provided by a clearing organization, the certificate must be based upon statements provided to it by its member organizations. For purposes of the foregoing, a "temporary global security," as defined in Treasury Regulation Section 1.163-5(c)(1)(ii)(B), is not considered to be an obligation in definitive form. In compliance with the foregoing, if the Offered Securities are of a series of Debt Securities issuable as Bearer Debt Securities, the delivery thereof (including delivery in exchange for an interest in a Global Security) and the payment of interest thereon, as applicable, will be subject to the satisfaction of certification requirements that will be specified by the Company in accordance with the Senior Indenture in connection with the establishment of such series and will be described in the applicable Prospectus Supplement. (Sections 2.02 and 2.04 of the Senior Indenture) The Senior Indenture also provides that no Bearer Debt Security (including a Global Security that represents Bearer Debt Securities) will be mailed or otherwise delivered to any location in the United States or its possessions. (Section 2.04 of the Senior Indenture) Bearer Debt Securities and any coupons appertaining thereto will bear a legend substantially to the following effect: "Any United States person who holds this obligation will be subject to limitations under the United States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code." Under Sections 165(j) and 1287(a) of the Code, holders that are United States persons, with certain exceptions, will not be entitled to deduct any loss on Bearer Debt Securities and must treat as ordinary income any gain realized on the sale or other disposition (including the receipt of principal) of Bearer Debt Securities. 14 PAYMENT Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of and any premium and interest on Bearer Debt Securities (other than a Global Security) will be made, subject to any applicable laws and regulations, at the offices of such Paying Agent or Paying Agents outside the United States as the Company may designate from time to time, except that, at the option of the Company (or, if so specified in the applicable Prospectus Supplement, at the option of the holder), payment of interest may be made by check (provided the same is not mailed to an address inside the United States) or by wire transfer to an account located outside the United States maintained by the payee. (Sections 2.13 and 4.01 of the Senior Indenture) Unless otherwise indicated in an applicable Prospectus Supplement, payment of interest on Bearer Debt Securities on any interest payment date will be made only against surrender of the coupon relating to such interest payment date. (Section 2.13 of the Senior Indenture) No payment with respect to any Bearer Debt Security will be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained in the United States. Notwithstanding the foregoing, payments of principal of and any premium and interest on Bearer Debt Securities denominated and payable in U.S. Dollars will be made at the office of the Company's Paying Agent in the Borough of Manhattan, The City of New York, if (but only if) payment of the full amount thereof in U.S. Dollars at all offices or agencies outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions. (Section 4.01 of the Senior Indenture) Unless otherwise indicated in an applicable Prospectus Supplement, payment of principal of and any premium and interest on Registered Debt Securities (other than a Global Security) will be made at the office of such Paying Agent or paying Agents as the Company may designate from time to time, except that at the option of the Company payment of any interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the security register or, if so specified with respect to the Registered Debt Securities of any series issued under the Senior Indenture, by wire transfer to an account designated by such person. Payment of any installment of interest on Registered Debt Securities will be made to the person in whose name such Registered Debt Security is registered at the close of business on the regular record date (or, in the case of defaulted interest, special record date) for such interest payment. (Section 2.13 of the Indentures) All moneys paid by the Company to a Paying Agent for the payment of principal of or any premium or interest on any Debt Security that remains unclaimed for two years will be repaid to the Company and the holders of Debt Securities or any coupon appertaining thereto will thereafter look only to the Company for payment thereof unless an applicable abandoned property law designates another person. (Section 8.03 of the Indentures) AMENDMENT, SUPPLEMENT, WAIVER Subject to certain exceptions, the Indentures or the Debt Securities may be amended or supplemented, and any past default or compliance with any provision may be waived, insofar as the Debt Securities of any series are concerned, with the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities of such series. (Sections 6.04 and 9.02 of the Indentures) Without the consent of any holder of Debt Securities, the Company and the Trustee may amend or supplement the Indentures or the Debt Securities to cure any ambiguity, defect or inconsistency, to permit or facilitate the issuance of Debt Securities in bearer form or to provide for uncertificated Debt Securities in global form in addition to certificated Debt Securities (so long as any "registration-required obligation," within the meaning of Section 163(f)(2) of the Code, is in registered form for purposes of the Code) or to make certain other specified changes or any change that does not materially adversely affect the rights of any holder of Debt Securities. (Section 9.01 of the Indentures) SUCCESSOR CORPORATION The Company may not consolidate with or merge into, or transfer its properties and assets substantially as an entirety to, another entity unless (i) the successor entity which shall be an entity organized under the laws of the United States or a State thereof, assumes by supplemental indenture all the obligations of the Company under the Debt Securities and the Indentures, and (ii) after giving effect to such transaction, no Event of Default shall 15 have occurred and be continuing. Thereafter, unless otherwise specified in the Prospectus Supplement, all such obligations of the Company terminate. (Section 5.01 of the Indentures) DEFAULTS AND REMEDIES An Event of Default with respect to Debt Securities of any series is: (i) default for 30 days in payment of any interest on the Debt Securities of that series; (ii) default in payment of principal, premium or any other amount (other than interest) due in respect of the Debt Securities of that series at maturity, upon redemption (including default in the making of any mandatory sinking fund payment), upon purchase by the Company at the option of the holder or otherwise; (iii) failure by the Company for 60 days after receipt of written notice as provided in the Indentures to comply with any of its other agreements in the Indentures (other than agreements expressly included in the Indentures solely for the benefit of a series of Debt Securities other than that series or expressly made inapplicable to the Debt Securities of such series) or the Debt Securities of that series; and (iv) certain events of bankruptcy or insolvency. (Section 6.01 of the Indentures) If an Event of Default occurs with respect to the Debt Securities of any series and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the Debt Securities of that series may declare to be due and payable immediately (i) the principal amount of that series (or, if the Debt Securities of that series are Original Issue Discount Securities, that portion of the principal amount specified in the terms of that series) and (ii) accrued interest, if any, thereon. The Indentures provide for automatic acceleration of the maturity of such amounts upon the occurrence of certain events of bankruptcy or insolvency. (Section 6.02 of the Indentures) Holders of Debt Securities may not enforce the Indentures or the Debt Securities except as provided in the Indentures. (Section 6.06 of the Indentures) The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Debt Securities. (Section 7.01 of the Indentures) Subject to certain limitations, holders of a majority in aggregate principal amount of the Debt Securities of any series may direct the Trustee in its exercise of any trust or power with respect to the Debt Securities of that series. (Section 6.05 of the Indentures) The Trustee may withhold from holders of Debt Securities notice of any continuing default (except a default in payment of principal, premium, if any, interest or other amounts due) if it determines that withholding notice is in their interest. (Section 7.05 of the Indentures) The Company is required to file periodic reports with the Trustee as to the absence of default. (Section 4.07 of the Senior Indenture and Section 4.03 of the Senior Subordinated and Subordinated Indentures) NO PERSONAL LIABILITY No past, present or future director, officer, employee or stockholder, as such, of the Company or any successor thereof shall have any liability for any obligations of the Company under the Debt Securities or the Indentures or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Debt Securities by accepting a Debt Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Debt Securities. (Section 10.11 of the Senior Indenture and Section 11.11 of the Senior Subordinated and Subordinated Indentures) SATISFACTION AND DISCHARGE The Company's obligations under the Debt Securities of any series and the applicable Indenture with respect to such series (except for the obligation to pay the principal of and premium and interest, if any, on the Debt Securities of such series and certain other specified obligations) will be satisfied and discharged in accordance with the provisions of the Indenture if either (i) all Debt Securities of such series and coupons, if any, appertaining thereto previously authenticated and delivered (other than destroyed, lost or wrongfully-taken Debt Securities or coupons which have been replaced or paid and Debt Securities or coupons for whose payment money has theretofore been held in trust and, after remaining unclaimed for two years, has been repaid to the Company) have been delivered to the Trustee for cancellation or (ii) the Company irrevocable deposits in trust with the Trustee money or U.S. Government Obligations (or, in the case of the Senior Indenture, Government Obligations) sufficient to pay the principal of and premium and interest, if any, on all Debt Securities of such series and coupons, if any, appertaining thereto not theretofore cancelled or delivered to the Trustee for 16 cancellation (other than Debt Securities and coupons referred to in the parenthetical in clause (i) above) to maturity or redemption, as the case may be. (Section 8.01 of the Indentures) THE TRUSTEES Information with respect to the Trustees under the Senior Indenture, the Senior Subordinated Indenture and the Subordinated Indenture shall be provided in the applicable Prospectus Supplement. Any Trustee in its individual or any other capacity may become the owner or pledgee of Debt Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee provided it complies with the terms of the Indenture. (Section 7.03 of the Indentures) ADDITIONAL INFORMATION The Indentures (or form thereof, as the case may be) are exhibits to the Registration Statement. Anyone who receives this Prospectus may obtain copies of the Indentures (or form thereof, as the case may be) without charge by writing to Stephen M. Brett, Esq., Executive Vice President of the Company, at the address set forth under "The Company." The foregoing summaries of certain provisions of the Indentures do not purport to be complete and are subject to, and qualified in their entirety by reference to, all provisions of the Indentures, including the definitions of certain terms. Wherever particular provisions or defined terms of the Indentures are referred to, such provisions or defined terms are incorporated herein by reference. 17 DESCRIPTION OF SERIES PREFERRED STOCK GENERAL The Company is authorized to issue up to 50,000,000 shares of Series Preferred Stock. The Series Preferred Stock is issuable, from time to time, in one or more series, with such powers, designations, preferences and relative participating, optional or other rights, and qualifications, limitations or restrictions thereof, as is stated and expressed in a resolution or resolutions providing for the issue of each such series adopted by the Board of Directors. All shares of any one series of the Series Preferred Stock are required to be alike in every particular. Except to the extent otherwise provided in the resolution or resolutions providing for the issue of any series of Series Preferred Stock, the holders of shares of such series will have no voting rights except as may be required by Delaware law. As of the date of this Prospectus, there are five series of Series Preferred Stock outstanding. See "Description of Capital Stock--Preferred Stock." As described under "Description of Depositary Shares," the Company may, at its option, elect to offer Depositary Shares evidenced by depositary receipts, each representing an interest in a fraction (to be specified in the Prospectus Supplement relating to the particular series of Series Preferred Stock) of a share of the particular series of Series Preferred Stock, issued and deposited with a depositary, in lieu of offering any shares of such Series Preferred Stock. See "Description of Depositary Shares." Series Preferred Stock constituting Offered Securities shall have the dividend, liquidation, redemption, and voting rights set forth below unless otherwise provided in a Prospectus Supplement relating to such Series Preferred Stock. Reference is made to the Prospectus Supplement relating to a particular series of the Series Preferred Stock offered thereby for specific terms, including: (a) the designation of such series of Series Preferred Stock and the number of shares offered; (b) the amount of liquidation preference per share; (c) the initial public offering price at which such series of Series Preferred Stock will be issued; (d) the dividend rate (or method of calculation), the dates on which dividends shall be payable and the dates from which dividends shall commence to cumulate, if any; (e) any redemption or sinking fund provisions; (f) any conversion or exchange rates; (g) whether the Company has elected to offer Depositary Shares as described below under "Description of Depositary Shares;" (h) any voting rights; and (i) any other rights, preferences, privileges, limitations, and restrictions of such series of Series Preferred Stock. Each series of Series Preferred Stock, when issued, will be fully paid and nonassessable and will have no preemptive rights. The rights of the holders of each series of the Series Preferred Stock to receive dividends and distributions of assets will be subordinate to those of the Company's general creditors, but superior to the rights of holders of any capital stock of the Company ranking junior to such series of Series Preferred Stock as to the payment of dividends, rights of redemption and rights on liquidation, including the TCI Group Common Stock (as defined below) and the Liberty Group Common Stock (as defined below). DIVIDEND RIGHTS Holders of a series of Series Preferred Stock constituting Offered Securities will be entitled to receive, when, as, and if declared by the Board of Directors, out of funds of the Company legally available therefor, cash dividends on such dates and at such rates as are set forth in, or as are determined by the method described in, the Prospectus Supplement relating to such series of Series Preferred Stock. Such rate may be fixed or variable or both. Each such dividend will be payable to the holders of record as they appear on the stock books of the Company (or, if applicable, the records of the Depositary (as hereinafter defined) referred to under "Description of Depositary Shares") on such record dates, fixed by the Board of Directors, as specified in the Prospectus Supplement relating to such series of Series Preferred Stock. Such dividends may be cumulative or noncumulative, as provided in the Prospectus Supplement relating to such series of Series Preferred Stock. If the Board of Directors fails to declare a dividend payable on a dividend payment date on any series of Series Preferred Stock for which dividends are noncumulative, then the right to 18 receive a dividend in respect of the dividend period ending on such dividend payment date will be lost, and the Company will have no obligation to pay the dividend accrued for such period, whether or not dividends on such series are declared payable on any future dividend payment dates. Dividends on the shares of each series of Series Preferred Stock for which dividends are cumulative will accrue from the date on which the Company initially issues shares of such series. Unless otherwise specified in the applicable Prospectus Supplement, if at any time the Company shall have failed to pay, or declare and set aside the consideration sufficient to pay, full dividends on any series of Series Preferred Stock constituting Offered Securities for the immediately preceding dividend period (or, if such series is cumulative, for all prior dividend periods), and until such dividends (or, if such series of Series Preferred Stock is cumulative, full cumulative dividends) are paid, or declared and the consideration sufficient to pay the same in full is set aside for such purpose and for no other purpose, the Company may not (i) declare or pay any dividend on or make any distribution with respect to any class or series of capital stock of the Company ranking pari passu with or junior to such series of Series Preferred Stock, except for dividends declared and paid on any such stock ranking on a parity basis with such series of Series Preferred Stock contemporaneously and on a pro rata basis with dividends declared and paid on such series of Series Preferred Stock, or (ii) redeem or otherwise acquire any shares of such series of Series Preferred Stock, any parity stock, or any junior stock unless all then outstanding shares of such series of Series Preferred Stock and any other class or series of parity stock that by the terms of the instrument creating or evidencing such parity stock is required to be redeemed under such circumstances are redeemed. Unless otherwise specified in the applicable Prospectus Supplement, the failure of the Company to pay, or declare and set aside the consideration sufficient to pay, full dividends (or, if such series of Series Preferred Stock is cumulative, full cumulative dividends) on any series of Series Preferred Stock shall not prevent the Company from (i) paying any dividends on junior stock solely in shares of junior stock or the redemption or other acquisition of junior stock solely in exchange for (together with a cash adjustment for fractional shares, if any) shares of junior stock or (ii) paying any dividends on parity stock solely in shares of parity stock or junior stock (or both) or the redemption or other acquisition of shares of such series of Series Preferred Stock or parity stock solely in exchange for shares of junior stock. LIQUIDATION PREFERENCES In the event of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, the holders of each series of Series Preferred Stock constituting Offered Securities will be entitled to receive out of the assets of the Company available for distribution to stockholders, before any distribution of assets is made to the holders of any capital stock of the Company ranking junior to the shares of such series of Series Preferred Stock, the amount set forth in the Prospectus Supplement relating to such series of Series Preferred Stock. If, upon any voluntary or involuntary liquidation, dissolution, or winding up of the Company, the assets of the Company available for distribution to the holders of shares of such series of Series Preferred Stock and any other shares of capital stock of the Company ranking on a parity with shares of such series of Series Preferred Stock upon liquidation will not be sufficient to pay in full all amounts to which such holders are entitled, no such distribution will be made on account of any other class or series of capital stock ranking on a parity as to liquidation preference with the shares of such series of Series Preferred Stock unless proportionate distributative amounts are paid on account of shares of such series of Series Preferred Stock and shares of such parity stock ratably in proportion to the full respective preferential amounts to which they are entitled. After payment to the holders of such series of Series Preferred Stock of the full preferential amounts of the liquidating distribution to which they are entitled, the holders thereof will be entitled to no further participation in any distribution of assets by the Company. REDEMPTION Offered Securities consisting of a series of Series Preferred Stock may be redeemable, in whole or from time to time in part, at the option of the Company or the holder (or both), and may be subject to mandatory redemption pursuant to a sinking fund or otherwise, in each case upon terms, at the times, and at the redemption prices set forth in the Prospectus Supplement relating to such series. Unless otherwise provided in the applicable 19 Prospectus Supplement, shares of a series of Series Preferred Stock redeemed by the Company will be restored to the status of authorized but unissued shares of Series Preferred Stock. Unless otherwise specified in the applicable Prospectus Supplement, in the event that fewer than all of the outstanding shares of a series of Series Preferred Stock are to be redeemed, whether by mandatory or optional redemption, the number of shares to be redeemed will be determined by lot or pro rata (subject to rounding to avoid fractional shares) as may be determined by the Company in its sole discretion to be equitable. From and after the redemption date (unless default is made by the Company in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any) dividends will cease to accumulate on the shares of such series of Series Preferred Stock called for redemption and all rights of the holders thereof (except the right to receive the redemption price plus accumulated and unpaid dividends, if any) will cease. Unless otherwise specified in the applicable Prospectus Supplement, if the Company fails to redeem any shares of a series of Series Preferred Stock constituting Offered Securities required to be redeemed on a redemption date, and until such shares are redeemed in full, the Company may not declare or pay any dividend on or make any distribution with respect to any class or series of capital stock ranking junior to such series of Series Preferred Stock, and neither the Company nor any subsidiary may redeem any parity stock or junior stock, or purchase or otherwise acquire any shares of such series of Series Preferred Stock, parity stock or junior stock. Unless otherwise specified in the applicable Prospectus Supplement, the failure of the Company to so redeem shares of such series of Series Preferred stock shall not prevent the Company from (i) paying any dividends on junior stock solely in shares of junior stock or the redemption or other acquisition of junior stock solely in exchange for (together with a cash adjustment for fractional shares, if any) shares of junior stock or (ii) the redemption or other acquisition of shares of such series of Series Preferred Stock or parity stock solely in exchange for shares of parity stock or junior stock (or both). 20 DESCRIPTION OF DEPOSITARY SHARES Offered Securities may consist of Depositary Shares represented by Depositary Receipts (as defined below), with each Depositary Share equivalent to a fractional interest in a share of a particular series of Series Preferred Stock as specified in an accompanying Prospectus Supplement. The description set forth below and in any Prospectus Supplement of certain provisions of the Deposit Agreement (as defined below) and of the Depositary Shares and Depositary Receipts does not purport to be complete and is subject to and qualified in its entirety by reference to the Deposit Agreement and Depositary Receipts relating to such series of Series Preferred Stock, forms of which are filed as exhibits to the Registration Statement of which this Prospectus forms a part. GENERAL The Company may, at its option, elect to offer interests in fractions of shares of a series of Series Preferred Stock in lieu of shares of such series of Series Preferred Stock. In such event, the Company will provide for the issuance by a Depositary of receipts ("Depositary Receipts") for Depositary Shares, each of which will represent an interest in a fraction (to be set forth in the related Prospectus Supplement) of a share of a particular series of the Series Preferred Stock as described below. The shares of any series of Series Preferred Stock underlying the Depositary Shares will be deposited under a separate Deposit Agreement (the "Deposit Agreement") between the Company and a bank or trust company selected by the Company having its principal office in the United States and having a combined capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus Supplement relating to such Depositary Shares and the series of Series Preferred Stock represented thereby will set forth the name and address of the Depositary. Subject to the terms of the Deposit Agreement, each owner of a Depositary Share will be entitled, in proportion to the applicable fraction of a share of a series of Series Preferred Stock underlying such Depositary Share, to all the rights and preferences of the series of Series Preferred Stock underlying such Depositary Share (including dividend, voting, redemption, conversion, and liquidation rights). The Depositary Shares will be evidenced by Depositary Receipts issued pursuant to the Deposit Agreement. Pending the preparation of definitive Depositary Receipts, the Depositary may, upon the written order of the Company, issue temporary Depositary Receipts substantially identical to (and entitling the holders thereof to all the rights pertaining to) the definitive Depositary Receipts but not in definitive form. Definitive Depositary Receipts will be prepared thereafter without unreasonable delay, and temporary Depositary Receipts will be exchangeable for definitive Depositary Receipts at the Company's expense. DIVIDENDS AND OTHER DISTRIBUTIONS The Depositary will distribute all cash dividends or other cash distributions in respect of shares of a series of Series Preferred Stock to the record holders of Depositary Shares in proportion, insofar as practicable, to the number of Depositary Shares owned by such holders. In the event of a distribution other than cash in respect of shares of a series of Series Preferred Stock, the Depositary will distribute property received by it to the record holders of Depositary Shares in proportion, insofar as practicable, to the number of Depositary Shares owned by such holders, unless the Depositary determines that it is not feasible to make such distribution, in which case the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including sale (at public or private sale) of such property and distribution of the net proceeds from such sale to such holders. The amount distributed in any of the foregoing cases will be reduced by any amount required to be withheld by the Company or the Depositary on account of taxes. 21 REDEMPTION OF DEPOSITARY SHARES If a series of Series Preferred Stock underlying the Depositary Shares is subject to redemption, the Depositary Shares will be redeemed from the proceeds received by the Depositary resulting from the redemption, in whole or in part, of such series of Series Preferred Stock held by the Depositary. The redemption price per Depositary Share will be equal to the applicable fraction of the redemption price per share payable with respect to such series of Series Preferred Stock. Whenever the Company redeems shares of a series of Series Preferred Stock held by the Depositary, the Depositary will redeem as of the same redemption date the number of Depositary Shares relating to shares of such series of Series Preferred Stock so redeemed. If less than all the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will be selected by lot or pro rata as may be determined by the Depositary to be equitable. After the date fixed for redemption, the Depositary Shares so called for redemption will no longer be deemed to be outstanding and all rights of the holders of the Depositary Shares will cease, except the right to receive the moneys payable upon such redemption and any money or other property to which the holders of such Depositary Shares were entitled upon such redemption upon surrender to the Depositary of the Depositary Receipts evidencing such Depositary Shares. RECORD DATE Whenever (i) any cash dividend or other cash distribution shall become payable, any distribution other than cash shall be made, or any rights, preferences, or privileges shall be offered with respect to the shares of a series of Series Preferred Stock underlying the Depositary Shares, or (ii) the Depositary shall receive notice of any meeting at which holders of shares of such series of Series Preferred Stock are entitled to vote or of which holders of shares of such series of Series Preferred Stock are entitled to notice, or of any election on the part of the Company to call for redemption any shares of such series of Series Preferred Stock, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date for the shares of such series of Series Preferred Stock) for the determination of the holders of Depositary Shares (x) who shall be entitled to receive such dividend, distribution, rights, preferences, or privileges, (y) who shall be entitled to give instructions for the exercise of voting rights at any such meeting or to receive notice of such meeting, or (z) who shall be subject to such redemption, subject to the provisions of the Deposit Agreement. VOTING Upon receipt of notice of any meeting at which holders of shares of a series of Series Preferred Stock underlying the Depositary Shares are entitled to vote, the Depositary will mail the information contained in such notice of meeting to the record holders of Depositary Shares relating to such series of Series Preferred Stock. Each record holder of Depositary Shares on the record date (which will be the same date as the record date for the underlying series of Series Preferred Stock) will be entitled to instruct the Depositary as to the exercise of the voting rights pertaining to the number of shares of the series of Series Preferred Stock represented by such holder's Depositary Shares. The Depositary will endeavor, insofar as practicable, to vote the number of shares of the series of Series Preferred Stock represented by such Depositary Shares in accordance with such instructions, and the Company has agreed to take all reasonable action which may be deemed necessary by the Depositary in order to enable the Depositary to do so. The Depositary will abstain from voting shares of a series of Series Preferred Stock to the extent it does not receive specific written voting instructions from the holders of Depositary Shares representing such series of Series Preferred Stock. WITHDRAWAL OF UNDERLYING PREFERRED STOCK Upon surrender of Depositary Receipts at the Corporate Office (as defined in the Deposit Agreement) of the Depositary, the owner of the Depositary Shares evidenced thereby will be entitled to delivery at such office of certificates evidencing the number of shares of the series of Series Preferred Stock (but only in whole shares of 22 such series of Series Preferred Stock) represented by such Depositary Receipts. If the Depositary Receipts delivered by a holder evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of the series of Series Preferred Stock to be withdrawn, the Depositary will at the same time deliver to such holder a new Depositary Receipt or Receipts evidencing such excess number of Depositary Shares. AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT The form of Depositary Receipts and any provision of the Deposit Agreement may at any time be amended by agreement between the Company and the Depositary. However, any amendment that imposes any fees, taxes, or other charges payable by holders of Depositary Shares (other than taxes and other governmental charges, fees, and other expenses payable by such holders as stated under "Charges of Depositary"), or that otherwise prejudices any substantial existing right of holders of Depositary Shares, will not take effect as to outstanding Depositary Shares until the expiration of 90 days after notice of such amendment has been mailed to the record holders of outstanding Depositary Shares. Every holder of Depositary Shares at the time any such amendment becomes effective shall be deemed to consent and agree to such amendment and to be bound by the Deposit Agreement, as so amended. Whenever so directed by the Company, the Depositary will terminate the Deposit Agreement after mailing notice of such termination to the record holders of all Depositary Shares then outstanding at least 30 days prior to the date fixed in such notice for such termination. The Depositary may likewise terminate the Depositary Agreement if at any time 45 days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign and a successor depositary shall not have been appointed and accepted its appointment. If any Depositary Shares remain outstanding after the date of termination, the Depositary thereafter will discontinue the transfer of Depositary Shares, will suspend the distribution of dividends to the holders thereof, and will not give any further notices (other than notice of such termination) or perform any further acts under the Deposit Agreement except as provided below and except that the Depositary will continue to collect dividends on the series of Series Preferred Stock underlying such Depositary Shares and any other distributions with respect thereto. At any time after the expiration of two years from the date of termination, the Depositary may sell shares of the series of Series Preferred Stock then held by it at public or private sale, at such place or places and upon such terms as it deems proper and may thereafter hold the net proceeds of any such sale, together with any money and other property then held by it, without liability for interest hereon, for the pro rata benefit of the holders of Depositary Shares. The Company does not presently intend to terminate any Deposit Agreement or to permit the resignation of any Depositary without appointing a successor depositary. CHARGES OF DEPOSITARY The Company will pay all charges of the Depositary, including charges in connection with the initial deposit of shares of any series of Series Preferred Stock, the initial execution and delivery of the Depositary Receipts, the distribution of information to the holders of Depositary Receipts with respect to matters on which such series of Series Preferred Stock is entitled to vote, withdrawals of shares of such series of Series Preferred Stock, or redemption or conversion of shares of such series of Series Preferred Stock, except for taxes (including transfer taxes, if any) and other governmental charges and such other charges as are provided in the Deposit Agreement to be at the expense of holders of Depositary Receipts. MISCELLANEOUS The Depositary will make available for inspection by holders of Depositary Receipts at its Corporate Office any reports and communications from the Company that are delivered to the Depositary and made generally available to the holders of shares of the series of Series Preferred stock underlying the Depositary Shares. Neither the Depositary nor the Company will be liable if it is prevented or delayed by law or any circumstance beyond its control from or in performing its obligations under the Deposit Agreement. 23 DESCRIPTION OF CAPITAL STOCK The following description of certain terms of the Company's common stock, par value $1.00 per share ("Common Stock"), and Preferred Stock (defined below) does not purport to be complete and is qualified in its entirety by reference to the Restated Certificate of Incorporation, as amended, of the Company (including the Certificate of Designations with respect to each outstanding series of Series Preferred Stock) (the "Charter"), each of which is incorporated herein by reference. GENERAL The Charter currently provides that the Company is authorized to issue 3,602,375,096 shares of capital stock, including (i) 3,550,000,000 shares of Common Stock, of which 1,750,000,000 shares are designated Series A TCI Group Common Stock (the "Series A TCI Group Common Stock"), 150,000,000 shares are designated Series B TCI Group Common Stock (the "Series B TCI Group Common Stock" and, together with the Series A TCI Group Common Stock, the "TCI Group Common Stock"), 750,000,000 shares are designated Series A Liberty Media Group Common Stock (the "Series A Liberty Media Group Common Stock"), 75,000,000 shares are designated Series B Liberty Media Group Common Stock (the "Series B Liberty Media Group Common Stock" and, together with the Series A Liberty Media Group Common Stock, the "Liberty Media Group Common Stock"), 750,000,000 shares are designated Series A TCI Ventures Group Common Stock (the "Series A TCI Ventures Group Common Stock") and 75,000,000 shares are designated Series B TCI Ventures Group Common Stock (the "Series B TCI Ventures Group Common Stock" and, together with the Series A TCI Ventures Group Common Stock, the "TCI Ventures Group Common Stock") and (ii) 52,375,096 shares of preferred stock (the "Preferred Stock"), of which 700,000 shares are designated Class A Preferred Stock, par value $.01 per share (the "Class A Preferred Stock"), 1,675,096 shares are designated Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock, par value $.01 per share (the "Class B Preferred Stock") and 50,000,000 shares are designated as Series Preferred Stock, issuable in series. Of the Series Preferred Stock, 70,575 shares are designated as Convertible Preferred Stock, Series C-TCI Group (the "Series C- TCI Group Preferred Stock"), 70,575 shares are designated as Convertible Preferred Stock, Series C-Liberty Media Group (the "Series C-Liberty Media Group Preferred Stock"), 1,000,000 shares are designated as Convertible Preferred Stock, Series D (the "Series D Preferred Stock"), 400,000 shares are designated as Redeemable Convertible Preferred Stock, Series E (the "Series E Preferred Stock"), 500,000 shares are designated Convertible Redeemable Participating Preferred Stock, Series F (the "Series F Preferred Stock"), 7,259,380 shares are designated as Redeemable Convertible TCI Group Preferred Stock, Series G (the "Series G Preferred Stock"), and 7,259,380 shares are designated as Redeemable Convertible Liberty Media Group Preferred Stock, Series H (the "Series H Preferred Stock"). All of the shares of Class A Preferred Stock have previously been redeemed and retired and may not be reissued, thereby reducing the number of authorized shares of Preferred Stock. On April 1, 1998, all of the outstanding shares of Series D Preferred Stock were redeemed to the extent not previously converted by the holders thereof pursuant to the terms thereof, with the effect that all shares so redeemed or converted have been restored to the status of authorized and unissued shares of Series Preferred Stock, and may be reissued as shares of another series of Series Preferred Stock but may not be reissued as Series D Preferred Stock. All of the shares of Series E Preferred Stock have previously been redeemed and retired, with the effect that such shares have been restored to the status of authorized and unissued shares of Series Preferred Stock, and may be reissued as shares of another series of Series Preferred Stock but may not be reissued as Series E Preferred Stock. COMMON STOCK As of March 31, 1998, (i) 472,051,958 shares of Series A TCI Group Common Stock (net of treasury stock and shares held by subsidiaries of the Company), 50,136,615 shares of Series B TCI Group Common Stock (net of treasury stock and shares held by subsidiaries of the Company), 326,167,303 shares of Series A Liberty Media Group Common Stock (net of treasury stock and shares held by subsidiaries of the Company), 31,592,574 shares of Series B Liberty Media Group Common Stock (net of treasury stock and shares held by subsidiaries of the Company), 377,021,252 shares of Series A TCI Ventures Group Common Stock (net of treasury stock) and 24 45,460,536 shares of Series B TCI Ventures Group Common Stock (net of treasury stock) had been issued and were outstanding, (ii) 22,902,820 shares of Series A TCI Group Common Stock, 30,876,766 shares of Series B TCI Group Common Stock, 25,126,455 shares of Series A Liberty Media Group Common Stock, 82,074 shares of Series B Liberty Media Group Common Stock, 13,259,792 shares of Series A TCI Ventures Group Common Stock and 432,196 shares of Series B TCI Ventures Group Common Stock were held by the Company as treasury stock, and (iii) 125,645,656 shares of Series A TCI Group Common Stock, 9,112,500 shares of Series B TCI Group Common Stock, 6,654,367 shares of Series A Liberty Media Group Common Stock and 3,417,187 shares of Series B Liberty Media Group Common Stock were held by subsidiaries of the Company. As of that date, 99,247,030 shares of Series A TCI Group Common Stock, 39,286,137 shares of Series A Liberty Media Group Common Stock and 34,412,229 shares of Series A TCI Ventures Group Common Stock were reserved for issuance upon conversion, exchange or exercise of outstanding convertible or exchangeable securities (other than the Series B TCI Group Common Stock, the Series B Liberty Media Group Common Stock and the Series B TCI Ventures Group Common Stock, and other than the Series F Preferred Stock held by subsidiaries of the Company) and options. In addition, the Company has reserved a number of shares of Series A TCI Group Common Stock equal to the number of shares of Series B TCI Group Common Stock outstanding, a number of shares of Series A Liberty Media Group Common Stock equal to the number of shares of Series B Liberty Media Group Common Stock outstanding and a number of shares of Series A TCI Ventures Group Common Stock equal to the number of shares of Series B TCI Ventures Group Common Stock outstanding, in either case for issuance upon conversion, at the option of the holder, of the Series B TCI Group Common Stock, the Series B Liberty Media Group Common Stock and the Series B TCI Ventures Group Common Stock, respectively. Additionally, subsidiaries of the Company own shares of Series F Preferred Stock, which are convertible into an aggregate of 416,528,172 shares of Series A TCI Group Common Stock. Certain Definitions As used herein, the following terms have the meanings specified below: "Adjusted Liberty Media Group Outstanding Interest Fraction" means a fraction the numerator of which is the number of outstanding shares of Liberty Media Group Common Stock and the denominator of which is the sum of (a) such number of outstanding shares, (b) the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest, (c) the number of shares of Liberty Media Group Common Stock issuable upon conversion, exercise or exchange of Pre-Distribution Convertible Securities and (d) the number of Committed Acquisition Shares issuable. "Adjusted TCI Ventures Group Outstanding Interest Fraction" means a fraction the numerator of which is the number of outstanding shares of TCI Ventures Group Common Stock and the denominator of which is the sum of (a) such number of outstanding shares, (b) the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest and (c) the number of shares of TCI Ventures Group Common Stock issuable upon conversion, exercise or exchange of Pre-Exchange Offer Securities. "Appraisal Date," with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, shall mean the last day of the calendar month preceding the month in which the Selection Date occurs. "Appraiser" means each of the First Appraiser, the Second Appraiser and the Mutually Designated Appraiser. "Committed Acquisition Shares" means (i) the shares of Series A Liberty Media Group Common Stock that the Company had, prior to the record date for the Liberty Media Group Distribution on August 10, 1995, agreed to issue, but as of such record date had not issued, and (ii) the shares of Series A Liberty Media Group Common Stock that are issuable upon conversion, exercise or exchange of Convertible Securities that the 25 Company had, prior to the record date for the Liberty Media Group Distribution, agreed to issue, but as of such record date had not issued, in each case including obligations of the Company to issue shares of the Company's Class A Common Stock, par value $1.00 per share (which has been redesignated Series A TCI Group Common Stock), which as a result of the Liberty Media Group Distribution, constitute obligations to issue, among other securities, Series A Liberty Media Group Common Stock or Convertible Securities which are convertible into or exercisable or exchangeable for Series A Liberty Media Group Common Stock; provided, however, that Committed Acquisition Shares will not include any shares of Liberty Media Group Common Stock issuable upon conversion, exercise or exchange of Pre-Distribution Convertible Securities. The type and amount of Committed Acquisition Shares issuable will be appropriately adjusted to reflect subdivisions and combinations of the Series A Liberty Media Group Common Stock and dividends or distributions of shares of Series A Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock to holders of Series A Liberty Media Group Common Stock and other reclassifications of the Series A Liberty Media Group Common Stock, in each case occurring (or the record date for which occurs) after the Liberty Media Group Distribution. The shares of Series A Liberty Media Group Common Stock issuable upon conversion of the Series H Preferred Stock constitute Committed Acquisition Shares. "Convertible Securities" means any securities of the Company (other than any series of Common Stock) or any Subsidiary thereof that are convertible into, exchangeable for or evidence the right to purchase any shares of any series of Common Stock, whether upon conversion, exercise, exchange, pursuant to antidilution provisions of such securities or otherwise. "Disposition" means the sale, transfer, assignment or other disposition (whether by merger, consolidation, sale or contribution of assets or stock or otherwise) of properties or assets. "DGCL" means the General Corporation Law of the State of Delaware. "Exchange Offers" means those certain offers made by the Company to exchange (i) two shares of Series A TCI Ventures Group Common Stock for each share of Series A TCI Group Common Stock properly tendered and not validly withdrawn, up to 188,661,300 shares of Series A TCI Group Common Stock (the "Series A Maximum"), and (ii) two shares of Series B TCI Ventures Group Common Stock for each share of Series B TCI Group Common Stock properly tendered and not validly withdrawn, up to 16,266,400 shares of Series B TCI Group Common Stock (the "Series B Maximum"), upon the terms and subject to the conditions set forth in the Offering Circular of the Company, dated August 7, 1997, and the related letters of transmittal. "First Appraiser" means, with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, an investment banking firm of recognized national standing selected by the Company to make such determination. "Higher Appraised Amount" means, with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, the higher of the respective final views of the First Appraiser and the Second Appraiser as to such private market value. "Initial Ventures Options" means those certain options to purchase shares of Series A TCI Ventures Group Common Stock that were issued effective upon the consummation of the Exchange Offers, in connection with the adjustment of the Adjustable Options. For purposes of this definition, the term "Adjustable Options" means those options to purchase shares of Series A TCI Group Common Stock that were outstanding immediately prior to the consummation of the Exchange Offers under any Existing Stock Plan (as defined below), which options the Board of Directors and, if applicable, the committee of the Board of Directors charged with the administration of such Existing Stock Plan, determined to adjust for the effects of the Exchange Offers by the issuance, in substitution for and in cancellation of each such Adjustable Option effective upon the consummation of the Exchange Offers, of an Initial Ventures Option to purchase a number of shares of Series A TCI Ventures Group Common Stock initially equal to 30% (rounded up to the next whole number) of the number of shares of Series A TCI Group Common Stock that would have been issuable upon exercise of such Adjustable Option 26 immediately prior to the consummation of the Exchange Offers, and an option to purchase a number of shares of Series A TCI Group Common Stock equal to 70% (rounded down to the next whole number) of the number of shares of Series A TCI Group Common Stock that would have been issuable upon exercise of such Adjustable Option immediately prior to the consummation of the Exchange Offers, together with such other securities as were then issuable upon exercise of such Adjustable Option (and, in each case, having such other terms consistent with the terms of the Adjustable Option for which they are exchanged as the Board of Directors or the committee, as applicable, determines). The term "Existing Stock Plans" means each of the following: the Tele-Communications, Inc. 1994 Stock Incentive Plan, the Tele-Communications, Inc. 1995 Employee Stock Incentive Plan and the Tele-Communications, Inc. 1996 Incentive Plan. "Inter-Group Interest" of the TCI Group in the Liberty Media Group or the TCI Ventures Group means any common stockholders' equity value of the Company attributable to the Liberty Media Group or the TCI Ventures Group, as the case may be, that is not represented by outstanding shares of Liberty Media Group Common Stock or TCI Ventures Group Common Stock, as the case may be. The TCI Group's Inter-Group Interest in the Liberty Media Group is represented by the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest and the TCI Group's Inter-Group Interest in the TCI Ventures Group is represented by the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest. "Liberty Media Group" means as of any date of determination thereof: (i) the interest of the Company or any of its subsidiaries in Liberty Media Corporation or any of its subsidiaries (including any successor thereto by merger, consolidation or sale of all or substantially all of its assets, whether or not in connection with a Related Business Transaction) and their respective properties and assets, (ii) all assets and liabilities of the Company or any of its subsidiaries to the extent attributed to any of the properties or assets referred to in clause (i) of this sentence, whether or not such assets or liabilities are assets and liabilities of Liberty Media Corporation or any of its subsidiaries (or a successor as described in clause (i) of this sentence), (iii) all assets and properties contributed or otherwise transferred to the Liberty Media Group from the TCI Group, and (iv) the interest of the Company or any of its subsidiaries in the businesses, assets and liabilities acquired by the Company or any of its subsidiaries for the Liberty Media Group, as determined by the Board of Directors; provided that (a) from and after any dividend or other distribution with respect to any shares of Liberty Media Group Common Stock (other than a dividend or other distribution payable in shares of Liberty Media Group Common Stock, with respect to which adjustment will be made as described in clause (i) of the definition of "Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest," or in other securities of the Company attributed to the Liberty Media Group for which provision will be made as described in the penultimate sentence of this definition), the Liberty Media Group will no longer include an amount of assets or properties equal to the aggregate amount of such kind of assets or properties so paid in respect of shares of Liberty Media Group Common Stock multiplied by a fraction the numerator of which is equal to the Liberty Media Group Inter-Group Interest Fraction in effect immediately prior to the record date for such dividend or other distribution and the denominator of which is equal to the Liberty Media Group Outstanding Interest Fraction in effect immediately prior to the record date for such dividend or other distribution and (b) from and after any transfer of assets or properties from the Liberty Media Group to the TCI Group, the Liberty Media Group will no longer include the assets or properties so transferred. If the Company pays a dividend or makes any other distribution with respect to shares of Liberty Media Group Common Stock payable in securities of the Company attributed to the Liberty Media Group other than Liberty Media Group Common Stock, the TCI Group will be deemed to hold an amount of such other securities equal to the amount so distributed multiplied by the fraction specified in clause (a) of this definition (determined as of a time immediately prior to the record date for 27 such dividend or other distribution), and to the extent interest or dividends are paid or other distributions are made on such other securities so distributed to the holders of Liberty Media Group Common Stock, the Liberty Media Group will no longer include a corresponding ratable amount of the kind of assets paid as such interest or dividends or other distributions in respect of such securities so deemed to be held by the TCI Group. The Company may also, to the extent any such other securities constitute Convertible Securities which are at the time convertible, exercisable or exchangeable, cause such Convertible Securities deemed to be held by the TCI Group to be deemed to be converted, exercised or exchanged (and to the extent the terms of such Convertible Securities require payment or delivery of consideration in order to effect such conversion, exercise or exchange, the Liberty Media Group will in such case include an amount of the kind of properties or assets required to be paid or delivered as such consideration for the amount of the Convertible Securities deemed converted, exercised or exchanged as if such Convertible Securities were outstanding), in which case such Convertible Securities will no longer be deemed to be held by the TCI Group or attributed to the Liberty Media Group. "Liberty Media Group Distribution" shall mean the share distribution of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock made to the holders of record of Series A TCI Group Common Stock and Series B TCI Group Common Stock as of the close of business on August 4, 1995. "Liberty Media Group Inter-Group Interest Fraction," as of any date, shall mean a fraction the numerator of which is the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest as of such date and the denominator of which is the sum of (a) such Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest as of such date and (b) the aggregate number of shares of Liberty Media Group Common Stock outstanding as of such date. "Liberty Media Group Net Proceeds" shall mean, as of any date, with respect to any Disposition of any of the properties and assets of the Liberty Media Group, an amount, if any, equal to the gross proceeds of such Disposition after any payment of, or reasonable provision for, (a) any taxes payable by the Company in respect of such Disposition or in respect of any resulting dividend or redemption pursuant to clause (i) or (ii), respectively, of the second paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock" (or which would have been payable but for the utilization of tax benefits attributable to the TCI Group or the TCI Ventures Group), (b) any transaction costs, including, without limitation, any legal, investment banking and accounting fees and expenses and (c) any liabilities and other obligations (contingent or otherwise) of, or attributed to, the Liberty Media Group, including, without limitation, any indemnity or guarantee obligations incurred in connection with the Disposition or any liabilities for future purchase price adjustments and any preferential amounts plus any accumulated and unpaid dividends and other obligations (without duplication of amounts allocated for the satisfaction of the Company's obligations with respect to Pre-Distribution Convertible Securities and Committed Acquisition Shares issuable which are included in the determination of the Adjusted Liberty Media Group Outstanding Interest Fraction) in respect of Preferred Stock attributed to the Liberty Media Group. For purposes of this definition, any properties and assets of the Liberty Media Group remaining after such Disposition shall constitute "reasonable provision" for such amount of taxes, costs and liabilities (contingent or otherwise) as can be supported by such properties and assets. To the extent the proceeds of any Disposition include any securities or other property other than cash, the Board of Directors shall determine the value of such securities or property, including for the purpose of determining the equivalent value thereof if the Board of Directors determines to pay a dividend or redemption price in cash or securities or other property as provided in the penultimate paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock." "Liberty Media Group Outstanding Interest Fraction," as of any date, shall mean a fraction the numerator of which is the aggregate number of shares of Liberty Media Group Common Stock outstanding on such date and the denominator of which is the sum of (a) such aggregate number of shares of Liberty Media Group Common Stock outstanding on such date and (b) the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest as of such date. 28 "Lower Appraised Amount," with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, shall mean the lower of the respective final views of the First Appraiser and the Second Appraiser as to such private market value. "Market Capitalization" of any class or series of capital stock of the Company on any Trading Day shall mean the product of (i) the Market Value of one share of such class or series on such Trading Day and (ii) the number of shares of such class or series outstanding on such Trading Day. "Market Value" of any class or series of capital stock of the Company on any day shall mean the average of the high and low reported sales prices regular way of a share of such class or series on such day (if such day is a Trading Day, and if such day is not a Trading Day, on the Trading Day immediately preceding such day) or in case no such reported sale takes place on such Trading Day the average of the reported closing bid and asked prices regular way of a share of such class or series on such Trading Day, in either case on the Nasdaq National Market, or if the shares of such class or series are not quoted on the Nasdaq National Market on such Trading Day, the average of the closing bid and asked prices of a share of such class or series in the over- the-counter market on such Trading Day as furnished by any New York Stock Exchange member firm selected from time to time by the Company, or if such closing bid and asked prices are not made available by any such New York Stock Exchange member firm on such Trading Day, the market value of a share of such class or series as determined by the Board of Directors; provided that for purposes of determining the ratios described under "--Conversion and Redemption--Conversion of Liberty Media Group Common Stock at the Option of the Company," "--Conversion and Redemption--Conversion of TCI Ventures Group Common Stock at the Option of the Company," "--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," and "--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock" and as described under "--Liquidation Rights," (a) the "Market Value" of any share of any series of Common Stock on any day prior to the "ex" date or any similar date for any dividend or distribution paid or to be paid with respect to such series of Common Stock shall be reduced by the fair market value of the per share amount of such dividend or distribution as determined by the Board of Directors and (b) the "Market Value" of any share of any series of Common Stock on any day prior to (i) the effective date of any subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) of outstanding shares of such series of Common Stock or (ii) the "ex" date or any similar date for any dividend or distribution with respect to any such series of Common Stock in shares of such series of Common Stock shall be appropriately adjusted to reflect such subdivision, combination, dividend or distribution. "Mutually Appraised Amount," with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, shall mean the determination by the Mutually Designated Appraiser of such private market value. "Mutually Designated Appraiser" shall mean, if required with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, the investment banking firm of recognized national standing jointly designated by the First Appraiser and the Second Appraiser to make such determination. "Number of Shares Issuable with Respect to the Liberty Media Group Inter- Group Interest" is currently zero and will from time to time be (i) adjusted as appropriate to reflect subdivisions (by stock split or otherwise) and combinations (by reverse stock split or otherwise) of the Series A Liberty Media Group Common Stock and dividends or distributions of shares of Series A Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock to holders of Series A Liberty Media Group Common Stock and other reclassifications of Series A Liberty Media Group Common Stock, (ii) decreased (but not to less than zero) by (a) the aggregate number of shares of Series A Liberty Media Group Common Stock issued or sold by the Company after the Liberty Media Group Distribution other than Committed Acquisition Shares, the proceeds of which are attributed to the TCI Group, (b) the aggregate number of shares of Series A Liberty Media Group Common Stock issued or delivered upon conversion, exercise or exchange of Convertible Securities (other than Pre- Distribution Convertible Securities and Convertible Securities which are convertible into or exercisable or exchangeable for 29 Committed Acquisition Shares), the proceeds of which are attributed to the TCI Group, (c) the aggregate number of shares of Series A Liberty Media Group Common Stock issued or delivered by the Company as a dividend or distribution to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, (d) the aggregate number of shares of Series A Liberty Media Group Common Stock issued or delivered upon the conversion, exercise or exchange of any Convertible Securities (other than Pre-Distribution Convertible Securities and Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares) issued or delivered by the Company after the Liberty Media Group Distribution as a dividend or distribution or by reclassification or exchange to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock and (e) the aggregate number of shares of Series A Liberty Media Group Common Stock (rounded, if necessary, to the nearest whole number), equal to the aggregate fair value (as determined by the Board of Directors) of assets or properties attributed to the Liberty Media Group that are transferred from the Liberty Media Group to the TCI Group in consideration of a reduction in the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest, divided by the Market Value of one share of Series A Liberty Media Group Common Stock as of the date of such transfer, and (iii) increased by (a) the aggregate number of any shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock which are retired or otherwise cease to be outstanding following their purchase with funds attributed to the TCI Group, (b) a number (rounded, if necessary, to the nearest whole number), equal to the fair value (as determined by the Board of Directors) of assets or properties theretofore attributed to the TCI Group that are contributed to the Liberty Media Group in consideration of an increase in the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest, divided by the Market Value of one share of Series A Liberty Media Group Common Stock as of the date of such contribution and (c) the aggregate number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which Convertible Securities are deemed to be converted, exercised or exchanged pursuant to the last sentence of the definition of "TCI Group." The Company will not issue or sell shares of Series B Liberty Media Group Common Stock in respect of a reduction in the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest. Whenever a change in the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest occurs, the Company will prepare and file a statement of such change with the Secretary of the Company. "Number of Shares Issuable with Respect to the TCI Ventures Group Inter- Group Interest" is currently zero and will from time to time, as applicable, be (i) adjusted as appropriate to reflect subdivisions (by stock split or otherwise) and combinations (by reverse stock split or otherwise) of the Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock and dividends or distributions of shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock to holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock and other reclassifications of the Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock, (ii) decreased (but not to less than zero) by (a) the aggregate number of shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock issued or sold by the Company after the consummation of the Exchange Offers the proceeds of which are attributed to the TCI Group, (b) the aggregate number of shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock issued or delivered upon conversion, exercise or exchange of Convertible Securities (other than Pre-Exchange Offer Securities), the proceeds of which are attributed to the TCI Group, (c) the aggregate number of shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock issued or delivered by the Company as a dividend or distribution to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, (d) the aggregate number of shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock issued or delivered upon the conversion, exercise or exchange of any Convertible Securities (other than Pre-Exchange Offer Securities) issued or delivered by the Company after the consummation of the Exchange Offers as a dividend or distribution or by reclassification or exchange to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock and (e) the aggregate number of shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock (rounded, if necessary, to the nearest whole number), equal to the aggregate fair value (as determined by the Board of Directors) of assets or properties attributed to the TCI Ventures Group that 30 are transferred from the TCI Ventures Group to the TCI Group in consideration of a reduction in the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest, divided by the Market Value of one share of Series A TCI Ventures Group Common Stock as of the date of such transfer, and (iii) increased by (a) the aggregate number of any shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock which are retired or otherwise cease to be outstanding following their purchase with funds attributed to the TCI Group, (b) a number (rounded, if necessary, to the nearest whole number), equal to the fair value (as determined by the Board of Directors) of assets or properties theretofore attributed to the TCI Group that are contributed to the TCI Ventures Group in consideration of an increase in the Number of Shares Issuable with Respect to the TCI Ventures Group Inter- Group Interest, divided by the Market Value of one share of Series A TCI Ventures Group Common Stock as of the date of such contribution and (c) the aggregate number of shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock into or for which Convertible Securities are deemed to be converted, exercised or exchanged pursuant to the last sentence of the definition of "TCI Group." Whenever a change in the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest occurs, the Company shall prepare and file a statement of such change with the Secretary of the Company. "Pre-Distribution Convertible Securities" means Convertible Securities that were outstanding on the record date for the Liberty Media Group Distribution and were, prior to such date, convertible into or exercisable or exchangeable for shares of the Company's Class A Common Stock, par value $1.00 per share (which has been redesignated Series A TCI Group Common Stock). "Pre-Exchange Offer Securities" means the TCI-UA Notes and the Initial Ventures Options. "Qualifying Subsidiary" shall mean a Subsidiary of the Company in which (i) the Company's ownership and voting interest is sufficient to satisfy the requirements of the Internal Revenue Service for (x), in the case of a Subsidiary that holds assets attributed to the Liberty Media Group, a distribution of the Company's interest in such Subsidiary to the holders of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock that is tax free to such holders or (y), in the case of a Subsidiary that holds assets attributed to the TCI Ventures Group, a distribution of the Company's interest in such Subsidiary to the holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock that is tax free to such holders or (ii) the Company owns, directly or indirectly, all of the issued and outstanding capital stock. "Related Business Transaction" shall mean any Disposition of all or substantially all of the properties and assets of the Liberty Media Group or the TCI Ventures Group, as the case may be, in which the Company receives as proceeds of such Disposition primarily equity securities (including, without limitation, capital stock, convertible securities, partnership or limited partnership interests and other types of equity securities, without regard to the voting power or contractual or other management or governance rights related to such equity securities) of the purchaser or acquiror of such assets and properties of the Liberty Media Group or the TCI Ventures Group, as the case may be, any entity which succeeds (by merger, formation of a joint venture enterprise or otherwise) to such assets and properties of the Liberty Media Group or the TCI Ventures Group, as the case may be, or a third party issuer, which purchaser, acquiror or other issuer is engaged or proposes to engage primarily in one or more businesses similar or complementary to the businesses conducted by the Liberty Media Group or the TCI Ventures Group, as the case may be, prior to such Disposition, as determined in good faith by the Board of Directors. "Second Appraiser" means, with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, an investment banking firm of recognized national standing selected by the Independent Committee to make such determination. "Selection Date," with respect to any determination of the Liberty Media Group Private Market Value or the TCI Ventures Group Private Market Value, shall mean the date upon which the Second Appraiser for such determination is selected by the Independent Committee. 31 "Subsidiary" shall mean, with respect to any person or entity, any corporation or partnership 50% or more of whose outstanding voting securities or partnership interests, as the case may be, are directly or indirectly owned by such person or entity. "TCI Group" means as of any date of determination thereof: (i) the interest of the Company or any of its subsidiaries in all of the businesses in which the Company or any of its subsidiaries (or any of their predecessors or successors) is or has been engaged, directly or indirectly, and the respective assets and liabilities of the Company or any of its subsidiaries, other than any businesses, assets or liabilities of the Liberty Media Group or the TCI Ventures Group; (ii) a proportionate interest in the businesses, assets and liabilities of the Liberty Media Group equal to the Liberty Media Group Inter-Group Interest Fraction as of such date and a proportionate interest in the businesses, assets and liabilities of the TCI Ventures Group equal to the TCI Ventures Group Inter-Group Interest Fraction as of such date; (iii) from and after any dividend or other distribution with respect to shares of Liberty Media Group Common Stock (other than a dividend or other distribution payable in shares of Liberty Media Group Common Stock, with respect to which adjustment will be made as described in clause (i) of the definition of "Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest," or in other securities of the Company attributed to the Liberty Media Group, for which provision will be made as described in the second sentence of this definition), an amount of assets or properties theretofore included in the Liberty Media Group equal to the aggregate amount of such kind of assets or properties so paid in respect of such dividend or other distribution with respect to shares of Liberty Media Group Common Stock multiplied by a fraction the numerator of which is equal to the Liberty Media Group Inter-Group Interest Fraction in effect immediately prior to the record date for such dividend or other distribution and the denominator of which is equal to the Liberty Media Group Outstanding Interest Fraction in effect immediately prior to the record date for such dividend or other distribution; (iv) from and after any dividend or other distribution with respect to shares of TCI Ventures Group Common Stock (other than a dividend or other distribution payable in shares of TCI Ventures Group Common Stock, with respect to which adjustment will be made as described in clause (i) of the definition of "Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest," or in other securities of the Company attributed to the TCI Ventures Group, for which provision will be made as described in the penultimate sentence of this definition), an amount of assets or properties theretofore included in the TCI Ventures Group equal to the aggregate amount of such kind of assets or properties so paid in respect of such dividend or other distribution with respect to shares of TCI Ventures Group Common Stock multiplied by a fraction the numerator of which is equal to the TCI Ventures Group Inter-Group Interest Fraction in effect immediately prior to the record date for such dividend or other distribution and the denominator of which is equal to the TCI Ventures Group Outstanding Interest Fraction in effect immediately prior to the record date for such dividend or other distribution; and (v) any assets or properties transferred from the Liberty Media Group or the TCI Ventures Group to the TCI Group; provided that, from and after any contribution or transfer of any assets or properties from the TCI Group to the Liberty Media Group or the TCI Ventures Group, the TCI Group will no longer include such assets or properties so contributed or transferred (other than pursuant to its interest in the businesses, assets and liabilities of the Liberty Media Group or the TCI Ventures Group, as applicable, described in clause (ii) above). If the Company pays a dividend or makes any other distribution with respect to shares of Liberty Media Group Common Stock payable in other securities of the Company attributed to the Liberty Media Group, the TCI Group will be deemed to hold an amount of such other securities equal to the amount so distributed multiplied by the fraction specified in clause (iii) of this definition (determined as of a time immediately prior to the record date for such dividend or other distribution), and to the extent interest or dividends are paid or other distributions are made on such other securities so distributed to holders of Liberty Media Group Common Stock, the TCI Group will include a 32 corresponding ratable amount of the kind of assets paid as such interest or dividends or other distributions in respect of such securities so deemed to be held by the TCI Group. If the Company pays a dividend or makes any other distribution with respect to shares of TCI Ventures Group Common Stock payable in other securities of the Company attributed to the TCI Ventures Group, the TCI Group will be deemed to hold an amount of such other securities equal to the amount so distributed multiplied by the fraction specified in clause (iv) of this definition (determined as of a time immediately prior to the record date for such dividend or other distribution), and to the extent interest or dividends are paid or other distributions are made on such other securities so distributed to holders of TCI Ventures Group Common Stock, the TCI Group will include a corresponding ratable amount of the kind of assets paid as such interest or dividends or other distribution in respect of such securities so deemed to be held by the TCI Group. The Company may also, to the extent any such other securities constitute Convertible Securities which are at the time convertible, exercisable or exchangeable, cause such Convertible Securities deemed to be held by the TCI Group to be deemed to be converted, exercised or exchanged (and to the extent the terms of such Convertible Securities require payment or delivery of consideration in order to effect such conversion, exercise or exchange, the TCI Group will in such case no longer include an amount of the kind of properties or assets required to be paid or delivered as such consideration for the amount of the Convertible Securities deemed converted, exercised or exchanged as if such Convertible Securities were outstanding), in which case such Convertible Securities will no longer be deemed to be held by the TCI Group or attributed to the Liberty Media Group or the TCI Ventures Group, as applicable. "TCI-UA Notes" shall mean those certain convertible notes due December 12, 2021 issued by TCI UA, Inc., a Subsidiary of the Company, which notes were, prior to the consummation of the Exchange Offers, exchangeable for shares of Series A TCI Group Common Stock and Series A Liberty Media Group Common Stock. "TCI Ventures Group" shall mean, as of any date that any shares of Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock have been issued and continue to be outstanding: (i) the interest of the Company or of any of its subsidiaries in any of the following persons or any of their respective subsidiaries (including any successor thereto by merger, consolidation or sale of all or substantially all of its assets, whether or not in connection with a Related Business Transaction) and their respective properties and assets: TCI Ventures Group, LLC, Tele-Communications International, Inc., TCI Telephony Holdings, Inc., New Jersey Fiber Technologies, L.P., Louisville Lightwave, Western Tele-Communications, Inc., TCI GCI, Inc., TCI UVSG, Inc., Acclaim Entertainment, Inc., TCI TSX, Inc., Intessera, Inc., TCI- TVGOS, Inc., TCI MCNS Holdings, Inc., TCI ETC Holdings, Inc., TCI Internet Holdings, Inc., TCI Online Sports Holdings, Inc., TCI Online Village Holdings, Inc., TCI INZ Sports Holdings, Inc., TCI Netscape Holdings, Inc., TCI Java, Inc., National Digital Television Center, Inc., TCI SUMMITrak of Texas, Inc., TCI SUMMITrak, LLC, DigiVentures, LLC, Kitty Hawk Capital Limited Partners, II, New Enterprise Associates, IV, Limited Partnership, Venture First II, L.P., TVSM, Inc., (ii) all assets and liabilities of the Company or any of its subsidiaries to the extent attributed to any of the properties or assets referred to in clause (i) of this sentence, whether or not such assets or liabilities are assets and liabilities of any of the Persons named in clause (i) or any of their respective subsidiaries (or any successor as described in clause (i) of this sentence), (iii) the proceeds of exercise of the Initial Ventures Options and the expense of exercise of any related stock appreciation rights, (iv) all assets and properties contributed or otherwise transferred to the TCI Ventures Group from the TCI Group, and (v) the interest of the Company or any of its subsidiaries in the businesses, assets and liabilities acquired by the Company or any of its subsidiaries for the TCI Ventures Group, as determined by the Board of Directors; 33 provided that, (a) from and after any dividend or other distribution with respect to any shares of TCI Ventures Group Common Stock (other than a dividend or other distribution payable in shares of TCI Ventures Group Common Stock, with respect to which adjustment shall be made as provided in clause (i) of the definition of "Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest," or in other securities of the Company attributed to the TCI Ventures Group for which provision shall be made as set forth in the penultimate sentence of this definition), the TCI Ventures Group will no longer include an amount of assets or properties equal to the aggregate amount of such kind of assets or properties so paid in respect of shares of TCI Ventures Group Common Stock multiplied by a fraction the numerator of which is equal to the TCI Ventures Group Inter-Group Interest Fraction in effect immediately prior to the record date for such dividend or other distribution and the denominator of which is equal to the TCI Ventures Group Outstanding Interest Fraction in effect immediately prior to the record date for such dividend or other distribution and (b) from and after any transfer of assets or properties from the TCI Ventures Group to the TCI Group, the TCI Ventures Group shall no longer include the assets or properties so transferred. If the Company pays a dividend or makes any other distribution with respect to shares of TCI Ventures Group Common Stock payable in securities of the Company attributed to the TCI Ventures Group other than TCI Ventures Group Common Stock, the TCI Group shall be deemed to hold an amount of such other securities equal to the amount so distributed multiplied by the fraction specified in clause (a) of this definition (determined as of a time immediately prior to the record date for such dividend or other distribution), and to the extent interest or dividends are paid or other distributions are made on such other securities so distributed to the holders of TCI Ventures Group Common Stock, the TCI Ventures Group will no longer include a corresponding ratable amount of the kind of assets paid as such interest or dividends or other distributions in respect of such securities so deemed to be held by the TCI Group. The Company may also, to the extent any such other securities constitute Convertible Securities which are at the time convertible, exercisable or exchangeable, cause such Convertible Securities deemed to be held by the TCI Group to be deemed to be converted, exercised or exchanged (and to the extent the terms of such Convertible Securities require payment or delivery of consideration in order to effect such conversion, exercise or exchange, the TCI Ventures Group shall in such case include an amount of the kind of properties or assets required to be paid or delivered as such consideration for the amount of the Convertible Securities deemed converted, exercised or exchanged as if such Convertible Securities were outstanding), in which case such Convertible Securities shall no longer be deemed to be held by the TCI Group or attributed to the TCI Ventures Group. "TCI Ventures Group Inter-Group Interest Fraction," as of any date, shall mean a fraction the numerator of which is the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest as of such date and the denominator of which is the sum of (a) such Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest as of such date and (b) the aggregate number of shares of TCI Ventures Group Common Stock outstanding as of such date. "TCI Ventures Group Net Proceeds" shall mean, as of any date, with respect to any Disposition of any of the properties and assets of the TCI Ventures Group, an amount, if any, equal to the gross proceeds of such Disposition after any payment of, or reasonable provision for, (a) any taxes payable by the Company in respect of such Disposition or in respect of any resulting dividend or redemption pursuant to clause (i) or (ii), respectively, of the second paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock" (or which would have been payable but for the utilization of tax benefits attributable to the TCI Group or the Liberty Media Group), (b) any transaction costs, including, without limitation, any legal, investment banking and accounting fees and expenses and (c) any liabilities and other obligations (contingent or otherwise) of, or attributed to, the TCI Ventures Group, including, without limitation, any indemnity or guarantee obligations incurred in connection with the Disposition or any liabilities for future purchase price adjustments and any preferential amounts plus any accumulated and unpaid dividends and other obligations (without duplication of amounts allocated for the satisfaction of the Company's obligations with respect to Pre-Exchange Offer Securities which are included in the determination of the Adjusted TCI Ventures Group Outstanding Interest Fraction) in respect of Preferred Stock attributed to the TCI Ventures Group. For purposes of this definition, any properties and assets of the TCI Ventures Group remaining after such Disposition shall constitute "reasonable provision" for such amount of taxes, costs and liabilities (contingent or 34 otherwise) as can be supported by such properties and assets. To the extent the proceeds of any Disposition include any securities or other property other than cash, the Board of Directors shall determine the value of such securities or property, including for the purpose of determining the equivalent value thereof if the Board of Directors determines to pay a dividend or redemption price in cash or securities or other property as provided in the third paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock." "TCI Ventures Group Outstanding Interest Fraction," as of any date, shall mean a fraction the numerator of which is the aggregate number of shares of TCI Ventures Group Common Stock outstanding on such date and the denominator of which is the sum of (a) such aggregate number of shares of TCI Ventures Group Common Stock outstanding on such date and (b) the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest as of such date. "Trading Day" shall mean each weekday other than any day on which any relevant class or series of capital stock of the Corporation is not traded on the Nasdaq National Market System or in the over-the-counter market. Voting Rights Holders of Series A TCI Group Common Stock, Series A Liberty Media Group Common Stock and Series A TCI Ventures Group Common Stock, in each case, are entitled to one vote for each share of such stock held, and holders of Series B TCI Group Common Stock, Series B Liberty Media Group Common Stock and Series B TCI Ventures Group Common Stock, in each case, are entitled to ten votes for each share of such stock held, on all matters presented to such stockholders. Except as may otherwise be required by the laws of the State of Delaware or, with respect to any class of Preferred Stock or any series of such a class, in the Charter (including any resolution or resolutions providing for the establishment of such class or series pursuant to authority vested in the Board of Directors by the Charter), the holders of TCI Group Common Stock, the holders of Liberty Media Group Common Stock, the holders of TCI Ventures Group Common Stock and the holders of each class or series of Preferred Stock, if any, entitled to vote thereon will vote as one class with respect to all matters to be voted on by stockholders of the Company. None of the holders of Series A TCI Group Common Stock, Series B TCI Group Common Stock, Series A Liberty Media Group Common Stock, Series B Liberty Media Group Common Stock, Series A TCI Ventures Group Common Stock or Series B TCI Ventures Group Common Stock have any rights to vote as a separate class or series on any matter coming before the stockholders of the Company, except with respect to certain limited class and series voting rights provided under the Delaware General Corporation Law ("DGCL"). Under the DGCL, the approval of the holders of a majority of the outstanding shares of any class of capital stock of a corporation, voting separately as a class, is required to approve any amendment to the charter of such corporation that would alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely, provided that, if any amendment would alter or change the powers, preferences or special rights of one or more series of the class so as to affect them adversely, but would not so affect the entire class, then only the shares of the series so affected by the amendment would be entitled to vote thereon separately as a class. Because the Series A TCI Group Common Stock, the Series B TCI Group Common Stock, the Series A Liberty Media Group Common Stock, the Series B Liberty Media Group Common Stock, the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock are each a separate series of a single class of stock, each series will be entitled to vote separately as a class upon an amendment to the Charter that would alter or change the powers, preferences or special rights of such series so as to affect them adversely only if the other series were not so affected. The DGCL does not provide for any other separate voting rights of a class or series of capital stock (other than with respect to a change in par value or, in certain circumstances not applicable in the case of the Company's outstanding stock, an increase or decrease in the authorized shares of such class or series). Consequently, because most matters brought to a stockholder vote will require the approval of only a specified percentage of all of the Company's outstanding capital stock entitled to vote on such matters (including the TCI Group Common Stock, the Liberty Media Group Common Stock and 35 the TCI Ventures Group Common Stock) voting together as a single class, if the holders of one or more series of Common Stock have more than the number of votes required to approve any such matter, such holders would be in a position to control the outcome of the vote on such matter. Dividends Subject to the prior payment of dividends on, and other rights of, any of the outstanding shares of Preferred Stock, dividends may be paid as determined by the Board of Directors (i) on the TCI Group Common Stock out of the lesser of (x) the TCI Group Available Dividend Amount and (y) funds of the Company legally available therefor under the DGCL, (ii) on the Liberty Media Group Common Stock out of the lesser of (x) the Liberty Media Group Available Dividend Amount and (y) funds of the Company legally available therefor under the DGCL, and (iii) on the TCI Ventures Group Common Stock out of the lesser of (x) the TCI Ventures Group Available Dividend Amount and (y) funds of the Company legally available therefor under the DGCL. Under the DGCL, the amount of the funds of the Company legally available for the payment of dividends on any series of Common Stock is determined on the basis of the entire corporation and not just the TCI Group, the Liberty Media Group or the TCI Ventures Group. Consequently, the amount of legally available funds will be reduced by the amount of any net losses of the TCI Group, the Liberty Media Group or the TCI Ventures Group and any dividends or distributions on, or repurchases of, the TCI Group Common Stock, the Liberty Media Group Common Stock or the TCI Ventures Group Common Stock, if any, and dividends on, or certain repurchases of, Preferred Stock. Certain loan agreements to which certain subsidiaries of the Company are parties or are subject contain restricted payment provisions that limit the amount of dividends, other than stock dividends, that those companies may pay. Future loan agreements may also contain similar restrictions and limits. The "TCI Group Available Dividend Amount," as of any date, means either (i) the excess of (a) an amount equal to the total assets of the TCI Group less the total liabilities (not including preferred stock) of the TCI Group as of such date over (b) the aggregate par value of, or any greater amount determined to be capital in respect of, all outstanding shares of TCI Group Common Stock and each class or series of Preferred Stock attributed to the TCI Group or (ii) in case there is no such excess, an amount equal to the Corporation Earnings (Loss) Attributable to the TCI Group (if positive) for the fiscal year in which such date occurs and/or the preceding fiscal year. The "Corporation Earnings (Loss) Attributable to the TCI Group," for any period, means the net earnings or loss of the TCI Group for such period, determined on a basis consistent with the determination of the net earnings or loss of the TCI Group for such period as presented in the combined financial statements of the TCI Group, including income and expenses of TCI attributed to the operations of the TCI Group on a substantially consistent basis, including, without limitation, corporate administrative costs, net interest and income taxes. The TCI Group Available Dividend Amount is intended to be similar to the amount that would be legally available for the payment of dividends on the TCI Group Common Stock under the DGCL if the TCI Group were a separate Delaware corporation. There can be no assurance that there will be a TCI Group Available Dividend Amount. The "Liberty Media Group Available Dividend Amount," as of any date, means the product of the Liberty Media Group Outstanding Interest Fraction and either (i) the excess of (a) an amount equal to the total assets of the Liberty Media Group less the total liabilities (not including preferred stock) of the Liberty Media Group as of such date over (b) the aggregate par value of, or any greater amount determined to be capital in respect of, all outstanding shares of Liberty Media Group Common Stock and each class or series of Preferred Stock attributed to the Liberty Media Group or (ii) in case there is no such excess, an amount equal to the Corporation Earnings (Loss) Attributable to the Liberty Media Group (if positive) for the fiscal year in which such date occurs and/or the preceding fiscal year. The "Corporation Earnings (Loss) Attributable to the Liberty Media Group," for any period, means the net earnings or loss of the Liberty Media Group for such period determined on a basis consistent with the determination of the net earnings or loss of the Liberty Media Group for such period as presented in the combined financial statements of the Liberty Media Group, including income and expenses of the Company attributed to the operations of the Liberty Media Group on a substantially consistent basis, including, without limitation, corporate administrative costs, net interest and income taxes. The Liberty Media 36 Group Available Dividend Amount is intended to be similar to the amount that would be legally available for the payment of dividends on the Liberty Media Group Common Stock under the DGCL if the Liberty Media Group were a separate Delaware corporation. There can be no assurance that there will be a Liberty Media Group Available Dividend Amount. The "TCI Ventures Group Available Dividend Amount," as of any date, means the product of the TCI Ventures Group Outstanding Interest Fraction and either (i) the excess of (a) an amount equal to the total assets of the TCI Ventures Group less the total liabilities (not including preferred stock) of the TCI Ventures Group as of such date over (b) the aggregate par value of, or any greater amount determined to be capital in respect of, all outstanding shares of TCI Ventures Group Common Stock and each class or series of Preferred Stock attributed to the TCI Ventures Group or (ii) in case there is no such excess, an amount equal to the Corporation Earnings (Loss) Attributable to the TCI Ventures Group (if positive) for the fiscal year in which such date occurs and/or the preceding fiscal year. The "Corporation Earnings (Loss) Attributable to the TCI Ventures Group," for any period, means the net earnings or loss of the TCI Ventures Group for such period determined on a basis consistent with the determination of the net earnings or loss of the TCI Ventures Group for such period as presented in the combined financial statements of the TCI Ventures Group, including income and expenses of the Company attributed to the operations of the TCI Ventures Group on a substantially consistent basis, including, without limitation, corporate administrative costs, net interest and income taxes. The TCI Ventures Group Available Dividend Amount is intended to be similar to the amount that would be legally available for the payment of dividends on the TCI Ventures Group Common Stock under the DGCL if the TCI Ventures Group were a separate Delaware corporation. There can be no assurance that there will be a TCI Ventures Group Available Dividend Amount. Except for dividends declared or paid as described below under "--Share Distributions," "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," and "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock," any dividends paid on the Series A TCI Group Common Stock or the Series B TCI Group Common Stock will be paid only on both series, in equal amounts per share; any dividends paid on the Series A Liberty Media Group Common Stock or the Series B Liberty Media Group Common Stock will be paid only on both series, in equal amounts per share; and any dividends paid on the Series A TCI Ventures Group Common Stock or the Series B TCI Ventures Group Common Stock will be paid only on both series, in equal amounts per share. The Board of Directors, subject to the provisions described above and under "--Share Distributions" below, has the authority and discretion to declare and pay dividends on the TCI Group Common Stock, the Liberty Media Group Common Stock or the TCI Ventures Group Common Stock in equal or unequal amounts, notwithstanding the relationship among the TCI Group Available Dividend Amount, the Liberty Media Group Available Dividend Amount and the TCI Ventures Group Available Dividend Amount, the respective amounts of prior dividends declared on, or liquidation rights of, the TCI Group Common Stock, the Liberty Media Group Common Stock or the TCI Ventures Group Common Stock or any other factor. At the time of any dividend or other distribution on the outstanding shares of Liberty Media Group Common Stock (including any dividend of Liberty Media Group Net Proceeds from the Disposition of all or substantially all of the properties and assets of the Liberty Media Group as described below under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock"), the TCI Group will (if at such time there is an Inter-Group Interest in the Liberty Media Group) be credited, and the Liberty Media Group will be charged (in addition to the charge for the dividend or other distribution paid or distributed in respect of outstanding shares of Liberty Media Group Common Stock), with an amount equal to the product of (i) the aggregate amount of such dividend or distribution paid or distributed in respect of outstanding shares of Liberty Media Group Common Stock times (ii) a fraction the numerator of which is the Liberty Media Group Inter-Group Interest Fraction and the denominator of which is the Liberty Media Group Outstanding Interest Fraction. 37 At the time of any dividend or other distribution on the outstanding shares of TCI Ventures Group Common Stock (including any dividend of TCI Ventures Group Net Proceeds from the Disposition of all or substantially all of the properties and assets of the TCI Ventures Group as described under "-- Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock"), the TCI Group will (if at such time there is an Inter-Group Interest in the TCI Ventures Group) be credited, and the TCI Ventures Group will be charged (in addition to the charge for the dividend or other distribution paid or distributed in respect of outstanding shares of TCI Ventures Group Common Stock), with an amount equal to the product of (i) the aggregate amount of such dividend or distribution paid or distributed in respect of outstanding shares of TCI Ventures Group Common Stock times (ii) a fraction the numerator of which is the TCI Ventures Group Inter-Group Interest Fraction and the denominator of which is the TCI Ventures Group Outstanding Interest Fraction. Share Distributions Distributions on TCI Group Common Stock. If at any time after the initial issuance of shares of TCI Ventures Group Common Stock, a distribution paid in TCI Group Common Stock, TCI Ventures Group Common Stock, Liberty Media Group Common Stock, or any other securities of the Company or any other person (a "share distribution"), is made with respect to the TCI Group Common Stock, such share distribution will be declared and paid only as follows: (i) a share distribution consisting of shares of Series A TCI Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A TCI Group Common Stock) to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an equal per share basis; or consisting of shares of Series B TCI Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series B TCI Group Common Stock) to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an equal per share basis; or consisting of shares of Series A TCI Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A TCI Group Common Stock) to holders of Series A TCI Group Common Stock and, on an equal per share basis, shares of Series B TCI Group Common Stock (or like Convertible Securities convertible into or exercisable or exchangeable for shares of Series B TCI Group Common Stock) to holders of Series B TCI Group Common Stock; (ii) a share distribution consisting of shares of Series A Liberty Media Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A Liberty Media Group Common Stock) to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an equal per share basis; provided that the sum of (A) the aggregate number of shares of Series A Liberty Media Group Common Stock to be so issued (or the number of such shares which would be issuable upon conversion, exercise or exchange of any Convertible Securities to be so issued) and (B) the number of shares of such series that are subject to issuance upon conversion, exercise or exchange of any Convertible Securities then outstanding that are attributed to the TCI Group (other than Pre-Distribution Convertible Securities and other than Convertible Securities convertible into or exercisable or exchangeable for Committed Acquisition Shares) is less than or equal to the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest; (iii) a share distribution consisting of shares of Series A TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A TCI Ventures Group Common Stock) to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an equal per share basis; or consisting of shares of Series B TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series B TCI Ventures Group Common Stock) to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock, on an equal per share basis; or consisting of shares of Series A TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A TCI Ventures Group Common Stock) to holders of Series A TCI Group Common Stock and, on 38 an equal per share basis, shares of Series B TCI Ventures Group Common Stock (or like Convertible Securities convertible into or exercisable or exchangeable for shares of Series B TCI Ventures Group Common Stock) to holders of Series B TCI Group Common Stock; provided that the sum of (A) the aggregate number of shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock to be so distributed (or the number of such shares which would be issuable upon conversion, exercise or exchange of any Convertible Securities to be so distributed) and (B) the number of shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock that are subject to issuance upon conversion, exercise or exchange of any Convertible Securities then outstanding that are attributed to the TCI Group (other than Pre-Exchange Offer Securities) is less than or equal to the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest; and (iv) a share distribution consisting of any class or series of securities of the Company or any other person other than TCI Group Common Stock, Liberty Media Group Common Stock or TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of TCI Group Common Stock, Liberty Media Group Common Stock or TCI Ventures Group Common Stock), either on the basis of a distribution of identical securities, on an equal per share basis, to holders of Series A TCI Group Common Stock and Series B TCI Group Common Stock or on the basis of a distribution of one class or series of securities to holders of Series A TCI Group Common Stock and another class or series of securities to holders of Series B TCI Group Common Stock, provided that the securities so distributed (and, if the distribution consists of Convertible Securities, the securities into which such Convertible Securities are convertible or for which they are exercisable or exchangeable) do not differ in any respect other than their relative voting rights and related differences in designation, conversion, redemption and share distribution provisions, with holders of shares of Series B TCI Group Common Stock receiving the class or series having the higher relative voting rights (without regard to whether such rights differ to a greater or lesser extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Group Common Stock and the Series B TCI Group Common Stock), provided that if the securities so distributed constitute capital stock of a Subsidiary of the Company, such rights will not differ to a greater extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Group Common Stock and the Series B TCI Group Common Stock, and provided in each case that such distribution is otherwise made on an equal per share basis. The Company will not reclassify, subdivide or combine the Series A TCI Group Common Stock without reclassifying, subdividing or combining the Series B TCI Group Common Stock, on an equal per share basis, and the Company will not reclassify, subdivide or combine the Series B TCI Group Common Stock without reclassifying, subdividing or combining the Series A TCI Group Common Stock, on an equal per share basis. Distributions on Liberty Media Group Common Stock. If at any time a share distribution is to be made with respect to the Liberty Media Group Common Stock, such share distribution will be declared and paid only as follows (or as described under "--Conversion and Redemption" with respect to the redemptions and other distributions referred to therein): (i) a share distribution consisting of shares of Series A Liberty Media Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A Liberty Media Group Common Stock) to holders of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, on an equal per share basis; or consisting of shares of Series B Liberty Media Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series B Liberty Media Group Common Stock) to holders of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, on an equal per share basis; or consisting of shares of Series A Liberty Media Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A Liberty Media Group Common Stock) to holders of Series A Liberty Media Group Common Stock and, on an equal per share basis, shares of Series B Liberty Media Group Common Stock (or like Convertible Securities convertible into or exercisable or exchangeable 39 for shares of Series B Liberty Media Group Common Stock) to holders of Series B Liberty Media Group Common Stock; and (ii) a share distribution consisting of any class or series of securities of the Company or any other person other than as described in the immediately preceding clause (i) and other than TCI Group Common Stock or TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of TCI Group Common Stock or TCI Ventures Group Common Stock), either on the basis of a distribution of identical securities, on an equal per share basis, to holders of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock or on the basis of a distribution of one class or series of securities to holders of Series A Liberty Media Group Common Stock and another class or series of securities to holders of Series B Liberty Media Group Common Stock, provided that the securities so distributed (and, if the distribution consists of Convertible Securities, the securities into which such Convertible Securities are convertible or for which they are exercisable or exchangeable) do not differ in any respect other than their relative voting rights and related differences in designation, conversion, redemption and share distribution provisions, with holders of shares of Series B Liberty Media Group Common Stock receiving the class or series having the higher relative voting rights (without regard to whether such rights differ to a greater or lesser extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A Liberty Media Group Common Stock and the Series B Liberty Media Group Common Stock), provided that if the securities so distributed constitute capital stock of a Subsidiary of the Company, such rights will not differ to a greater extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A Liberty Media Group Common Stock and the Series B Liberty Media Group Common Stock, and provided in each case that such distribution is otherwise made on an equal per share basis. Because under the Charter the Liberty Media Group is not permitted to have an Inter-Group Interest in either the TCI Group or the TCI Ventures Group, no distributions on the Liberty Media Group Common Stock of shares of TCI Group Common Stock (or related Convertible Securities) or TCI Ventures Group Common Stock (or related Convertible Securities) are permitted. The Company will not reclassify, subdivide or combine the Series A Liberty Media Group Common Stock without reclassifying, subdividing or combining the Series B Liberty Media Group Common Stock, on an equal per share basis, and the Company will not reclassify, subdivide or combine the Series B Liberty Media Group Common Stock without reclassifying, subdividing or combining the Series A Liberty Media Group Common Stock, on an equal per share basis. Distributions on TCI Ventures Group Common Stock. If at any time a share distribution is to be made with respect to the TCI Ventures Group Common Stock, such share distribution will be declared and paid only as follows (or as described under "--Conversion and Redemption" with respect to the redemptions and other distributions referred to therein): (i) a share distribution consisting of shares of Series A TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A TCI Ventures Group Common Stock) to holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock, on an equal per share basis; or consisting of shares of Series B TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series B TCI Ventures Group Common Stock) to holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock, on an equal per share basis; or consisting of shares of Series A TCI Ventures Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of Series A TCI Ventures Group Common Stock) to holders of Series A TCI Ventures Group Common Stock and, on an equal per share basis, shares of Series B TCI Ventures Group Common Stock (or like Convertible Securities convertible into or exercisable or exchangeable for shares of Series B TCI Ventures Group Common Stock) to holders of Series B TCI Ventures Group Common Stock; and 40 (ii) a share distribution consisting of any class or series of securities of the Company or any other person other than as described in the immediately preceding clause (i) and other than TCI Group Common Stock or Liberty Media Group Common Stock (or Convertible Securities convertible into or exercisable or exchangeable for shares of TCI Group Common Stock or Liberty Media Group Common Stock), either on the basis of a distribution of identical securities, on an equal per share basis, to holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock or on the basis of a distribution of one class or series of securities to holders of Series A TCI Ventures Group Common Stock and another class or series of securities to holders of Series B TCI Ventures Group Common Stock, provided that the securities so distributed (and, if the distribution consists of Convertible Securities, the securities into which such Convertible Securities are convertible or for which they are exercisable or exchangeable) do not differ in any respect other than their relative voting rights and related differences in designation, conversion, redemption and share distribution provisions, with holders of shares of Series B TCI Ventures Group Common Stock receiving the class or series having the higher relative voting rights (without regard to whether such rights differ to a greater or lesser extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock), provided that if the securities so distributed constitute capital stock of a Subsidiary of the Company, such rights will not differ to a greater extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock, and provided in each case that such distribution is otherwise made on an equal per share basis. Because under the Charter the TCI Ventures Group is not permitted to have an Inter-Group Interest in either the TCI Group or the Liberty Media Group, no distributions on the TCI Ventures Group Common Stock of shares of TCI Group Common Stock (or related Convertible Securities) or Liberty Media Group Common Stock (or related Convertible Securities) are permitted. The Company will not reclassify, subdivide or combine the Series A TCI Ventures Group Common Stock without reclassifying, subdividing or combining the Series B TCI Ventures Group Common Stock, on an equal per share basis, and the Company will not reclassify, subdivide or combine the Series B TCI Ventures Group Common Stock without reclassifying, subdividing or combining the Series A TCI Ventures Group Common Stock, on an equal per share basis. Conversion and Redemption Conversion at the Option of the Holder. Each share of Series B TCI Group Common Stock is convertible, at the option of the holder thereof, into one share of Series A TCI Group Common Stock. Each share of Series B Liberty Media Group Common Stock is convertible, at the option of the holder thereof, into one share of Series A Liberty Media Group Common Stock. Each share of Series B TCI Ventures Group Common Stock is convertible, at the option of the holder thereof, into one share of Series A TCI Ventures Group Common Stock. Shares of Series A TCI Group Common Stock are not convertible into shares of Series B TCI Group Common Stock; shares of Series A Liberty Media Group Common Stock are not convertible into shares of Series B Liberty Media Group Common Stock; and shares of Series A TCI Ventures Group Common Stock are not convertible into shares of Series B TCI Ventures Group Common Stock. Conversion of Liberty Media Group Common Stock at the Option of the Company. The Board of Directors may at any time declare that (i) all of the outstanding shares of Series A Liberty Media Group Common Stock will be converted into a number (or fraction) of fully paid and nonassessable shares of Series A TCI Group Common Stock equal to the Liberty Media Group Optional Conversion Ratio, and (ii) all of the outstanding shares of Series B Liberty Media Group Common Stock will be converted into a number (or fraction) of fully paid and nonassessable shares of Series B TCI Group Common Stock equal to the Liberty Media Group Optional Conversion Ratio. As more fully described below, the Liberty Media Group Optional Conversion Ratio is the 41 ratio of the private market value of a share of Liberty Media Group Common Stock determined by appraisal to the public trading price of a share of TCI Group Common Stock. Under the Charter, the "Liberty Media Group Optional Conversion Ratio" means the quotient (calculated to the nearest five decimal places) obtained by dividing (x) the Liberty Media Group Common Stock Per Share Value by (y) the average Market Value of one share of Series A TCI Group Common Stock over the 20-Trading Day period ending on the Trading Day preceding the Appraisal Date. The Liberty Media Group Common Stock Per Share Value will equal the quotient obtained by dividing the Liberty Media Group Private Market Value by the Adjusted Outstanding Shares of Liberty Media Group Common Stock, which will be determined in the manner described below. The "Liberty Media Group Private Market Value" means an amount equal to the private market value of the Liberty Media Group as of the Appraisal Date. In the event that the Company determines to establish the Liberty Media Group Private Market Value, the Company shall designate the First Appraiser and a committee of the Board of Directors all of whose members are independent directors as determined under the Nasdaq National Market rules (the "Independent Committee") shall designate the Second Appraiser. Not later than 20 days after the Selection Date, the First Appraiser and the Second Appraiser will each determine its initial view as to the private market value of the Liberty Media Group as of the Appraisal Date and will consult with one another with respect thereto. Not later than the 30th day after the Selection Date, the First Appraiser and the Second Appraiser will each have determined its final view as to such private market value. If the Higher Appraised Amount is not more than 120% of the Lower Appraised Amount, the Liberty Media Group Private Market Value (subject to any adjustment described in the second succeeding paragraph) will be the average of those two amounts. If the Higher Appraised Amount is more than 120% of the Lower Appraised Amount, the First Appraiser and the Second Appraiser will agree upon and jointly designate the Mutually Designated Appraiser to determine such private market value. The Mutually Designated Appraiser will not be provided with any of the work of the First Appraiser and the Second Appraiser. The Mutually Designated Appraiser will, no later than the 20th day after the date the Mutually Designated Appraiser is designated, determine the Mutually Appraised Amount, and the Liberty Media Group Private Market Value (subject to any adjustment described in the second succeeding paragraph) will be (i) if the Mutually Appraised Amount is between the Lower Appraised Amount and the Higher Appraised Amount, (a) the average of (1) the Mutually Appraised Amount and (2) the Lower Appraised Amount or the Higher Appraised Amount, whichever is closer to the Mutually Appraised Amount, or (b) the Mutually Appraised Amount, if neither the Lower Appraised Amount nor the Higher Appraised Amount is closer to the Mutually Appraised Amount, or (ii) if the Mutually Appraised Amount is greater than the Higher Appraised Amount or less than the Lower Appraised Amount, the average of the Higher Appraised Amount and the Lower Appraised Amount. For these purposes, if any such investment banking firm expresses its final view of the private market value of the Liberty Media Group as a range of values, such investment banking firm's final view of such private market value will be deemed to be the midpoint of such range of values. Each of the investment banking firms referred to in the immediately preceding paragraph will be instructed to determine the private market value of the Liberty Media Group as of the Appraisal Date based upon the amount a willing purchaser would pay to a willing seller, in an arm's-length transaction, if it were acquiring the Liberty Media Group, as if the Liberty Media Group were a publicly traded non-controlled corporation and the purchaser was acquiring all of the capital stock of such corporation and without consideration of any potential regulatory constraints limiting the potential purchasers of the Liberty Media Group other than that which would have existed if the Liberty Media Group were a publicly traded non-controlled entity. Following the determination of the Liberty Media Group Private Market Value, the investment banking firms whose final views of the private market value of the Liberty Media Group were used in the calculation of the Liberty Media Group Private Market Value will determine the Adjusted Outstanding Shares of Liberty Media Group Common Stock together with any further appropriate adjustments to the Liberty Media Group Private Market Value resulting from such determination. The "Adjusted Outstanding Shares of Liberty Media Group Common Stock" means a number, as determined by such investment banking firms as of the Appraisal Date, 42 equal to the sum of the number of shares of Liberty Media Group Common Stock outstanding, the Number of Shares Issuable with Respect to the Liberty Media Group Inter-Group Interest, the number of Committed Acquisition Shares issuable, the number of shares of Liberty Media Group Common Stock issuable upon the conversion, exercise or exchange of all Pre-Distribution Convertible Securities and the number of shares of Liberty Media Group Common Stock issuable upon the conversion, exercise or exchange of those Convertible Securities (other than Pre-Distribution Convertible Securities and other than Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares) the holders of which would derive an economic benefit from conversion, exercise or exchange of such Convertible Securities which exceeds the economic benefit of not converting, exercising or exchanging such Convertible Securities. The "Liberty Media Group Common Stock Per Share Value" means the quotient obtained by dividing the Liberty Media Group Private Market Value by the Adjusted Outstanding Shares of Liberty Media Group Common Stock, provided that if such investment banking firms do not agree on the determinations provided for in this paragraph, the Liberty Media Group Common Stock Per Share Value will be the average of the quotients so obtained on the basis of the respective determinations of such firms. If the Company determines to convert shares of Series A Liberty Media Group Common Stock into Series A TCI Group Common Stock and shares of Series B Liberty Media Group Common Stock into Series B TCI Group Common Stock at the Liberty Media Group Optional Conversion Ratio, such conversion will occur on a conversion date on or prior to the 120th day following the Appraisal Date. If the Company determines not to undertake such conversion, the Company may at any time thereafter undertake to reestablish the Liberty Media Group Common Stock Per Share Value as of a subsequent date. Any such conversion would dilute the interests of holders of TCI Group Common Stock and would preclude holders of Liberty Media Group Common Stock from retaining their interest in a security reflecting separately the business of the Liberty Media Group. In addition, the adjustments in respect of Pre- Distribution Convertible Securities and Committed Acquisition Shares would dilute the interests of holders of Liberty Media Group Common Stock upon any conversion of shares of Liberty Media Group Common Stock into TCI Group Common Stock at the Liberty Media Group Optional Conversion Ratio. Conversion of TCI Ventures Group Common Stock at the Option of the Company. The Board of Directors may at any time declare that (i) all of the outstanding shares of Series A TCI Ventures Group Common Stock will be converted into a number (or fraction) of fully paid and nonassessable shares of Series A TCI Group Common Stock equal to the TCI Ventures Group Optional Conversion Ratio, and (ii) all of the outstanding shares of Series B TCI Ventures Group Common Stock will be converted into a number (or fraction) of fully paid and nonassessable shares of Series B TCI Group Common Stock equal to the TCI Ventures Group Optional Conversion Ratio. As more fully described below, the TCI Ventures Group Optional Conversion Ratio is the ratio of the private market value of a share of TCI Ventures Group Common Stock determined by appraisal to the public trading price of a share of TCI Group Common Stock. Under the Charter, the "TCI Ventures Group Optional Conversion Ratio" means the quotient (calculated to the nearest five decimal places) obtained by dividing (x) the TCI Ventures Group Common Stock Per Share Value by (y) the average Market Value of one share of Series A TCI Group Common Stock over the 20-Trading Day period ending on the Trading Day preceding the Appraisal Date. The TCI Ventures Group Common Stock Per Share Value will equal the quotient obtained by dividing the TCI Ventures Group Private Market Value by the Adjusted Outstanding Shares of TCI Ventures Group Common Stock, which will be determined in the manner described below. The "TCI Ventures Group Private Market Value" means an amount equal to the private market value of the TCI Ventures Group as of the Appraisal Date. In the event that the Company determines to establish the TCI Ventures Group Private Market Value, the Company shall designate the First Appraiser and the Independent Committee shall designate the Second Appraiser. Not later than 20 days after the Selection Date, the First Appraiser and the Second Appraiser will each determine its initial view as to the private market value of the TCI Ventures Group as of the Appraisal Date and will consult with one another with respect thereto. Not later than 43 the 30th day after the Selection Date, the First Appraiser and the Second Appraiser will each have determined its final view as to such private market value. If the Higher Appraised Amount is not more than 120% of the Lower Appraised Amount, the TCI Ventures Group Private Market Value (subject to any adjustment described in the second succeeding paragraph) will be the average of those two amounts. If the Higher Appraised Amount is more than 120% of the Lower Appraised Amount, the First Appraiser and the Second Appraiser will agree upon and jointly designate the Mutually Designated Appraiser to determine such private market value. The Mutually Designated Appraiser will not be provided with any of the work of the First Appraiser and the Second Appraiser. The Mutually Designated Appraiser will, no later than the 20th day after the date the Mutually Designated Appraiser is designated, determine the Mutually Appraised Amount, and the TCI Ventures Group Private Market Value (subject to any adjustment described in the second succeeding paragraph) will be (i) if the Mutually Appraised Amount is between the Lower Appraised Amount and the Higher Appraised Amount, (a) the average of (1) the Mutually Appraised Amount and (2) the Lower Appraised Amount or the Higher Appraised Amount, whichever is closer to the Mutually Appraised Amount, or (b) the Mutually Appraised Amount, if neither the Lower Appraised Amount nor the Higher Appraised Amount is closer to the Mutually Appraised Amount, or (ii) if the Mutually Appraised Amount is greater than the Higher Appraised Amount or less than the Lower Appraised Amount, the average of the Higher Appraised Amount and the Lower Appraised Amount. For these purposes, if any such investment banking firm expresses its final view of the private market value of the TCI Ventures Group as a range of values, such investment banking firm's final view of such private market value will be deemed to be the midpoint of such range of values. Each of the investment banking firms referred to in the immediately preceding paragraph will be instructed to determine the private market value of the TCI Ventures Group as of the Appraisal Date based upon the amount a willing purchaser would pay to a willing seller, in an arm's-length transaction, if it were acquiring the TCI Ventures Group, as if the TCI Ventures Group were a publicly traded non-controlled corporation and the purchaser was acquiring all of the capital stock of such corporation and without consideration of any potential regulatory constraints limiting the potential purchasers of the TCI Ventures Group other than that which would have existed if the TCI Ventures Group were a publicly traded non-controlled entity. Following the determination of the TCI Ventures Group Private Market Value, the investment banking firms whose final views of the private market value of the TCI Ventures Group were used in the calculation of the TCI Ventures Group Private Market Value will determine the Adjusted Outstanding Shares of TCI Ventures Group Common Stock together with any further appropriate adjustments to the TCI Ventures Group Private Market Value resulting from such determination. The "Adjusted Outstanding Shares of TCI Ventures Group Common Stock" means a number, as determined by such investment banking firms as of the Appraisal Date, equal to the sum of the number of shares of TCI Ventures Group Common Stock outstanding, the Number of Shares Issuable with Respect to the TCI Ventures Group Inter-Group Interest, the number of shares of TCI Ventures Group Common Stock issuable upon the conversion, exercise or exchange of all Pre-Exchange Offer Securities, and the number of shares of TCI Ventures Group Common Stock issuable upon the conversion, exercise or exchange of those Convertible Securities (other than Pre-Exchange Offer Securities) the holders of which would derive an economic benefit from conversion, exercise or exchange of such Convertible Securities which exceeds the economic benefit of not converting, exercising or exchanging such Convertible Securities. The "TCI Ventures Group Common Stock Per Share Value" means the quotient obtained by dividing the TCI Ventures Group Private Market Value by the Adjusted Outstanding Shares of TCI Ventures Group Common Stock, provided that if such investment banking firms do not agree on the determinations provided for in this paragraph, the TCI Ventures Group Common Stock Per Share Value will be the average of the quotients so obtained on the basis of the respective determinations of such firms. If the Company determines to convert shares of Series A TCI Ventures Group Common Stock into Series A TCI Group Common Stock and shares of Series B TCI Ventures Group Common Stock into Series B TCI Group Common Stock at the TCI Ventures Group Optional Conversion Ratio, such conversion will occur on a conversion date on or prior to the 120th day following the Appraisal Date. If the Company determines not to undertake such conversion, the Company may at any time thereafter undertake to reestablish the TCI Ventures Group Common Stock Per Share Value as of a subsequent date. 44 Any such conversion would dilute the interests of holders of TCI Group Common Stock and would preclude holders of TCI Ventures Group Common Stock from retaining their interest in a security reflecting separately the business of the TCI Ventures Group. In addition, the adjustments in respect of Pre- Exchange Offer Securities would dilute the interests of holders of TCI Ventures Group Common Stock upon any conversion of shares of TCI Ventures Group Common Stock into TCI Group Common Stock at the TCI Ventures Group Optional Conversion Ratio. Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock. Upon the Disposition, in one transaction or a series of related transactions by the Company and its subsidiaries of all or substantially all of the properties and assets of the Liberty Media Group to one or more persons, entities or groups, the Company is required, on or prior to the 85th Trading Day following the consummation of such Disposition, to take one of the actions listed in the following paragraph. This requirement does not apply to a Disposition (a) in connection with the Disposition by the Company of all of the Company's properties and assets in one transaction or a series of related transactions in connection with the liquidation, dissolution or winding up of the Company, (b) by dividend, other distribution or redemption in accordance with any provision described under "--Conversion and Redemption--Redemption of Liberty Media Group Common Stock in Exchange for Stock of Subsidiary," "-- Dividends," "--Share Distributions," or "--Liquidation Rights," (c) to any person, entity or group which the Company, directly or indirectly, after giving effect to the Disposition, controls or (d) in connection with a Related Business Transaction. For these purposes, "substantially all of the properties and assets of the Liberty Media Group" means a portion of such properties and assets that represents at least 80% of the then-current market value (as determined by the Board of Directors) of the properties and assets of the Liberty Media Group as of such date. The action the Company is required to take is to either: (i) subject to the limitations described under "--Dividends," declare and pay a dividend in cash and/or securities or other property (other than a dividend or distribution of Common Stock) to the holders of the outstanding shares of Liberty Media Group Common Stock equally on a share for share basis (subject to the provisions described in the last sentence of the penultimate paragraph under this caption "--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock"), in an aggregate amount equal to the product of the Liberty Media Group Outstanding Interest Fraction as of the record date for determining the holders entitled to receive such dividend and the Liberty Media Group Net Proceeds; (ii) provided that there are assets of the Company legally available therefor and the Liberty Media Group Available Dividend Amount would have been sufficient to pay a dividend in lieu thereof as described in clause (i) of this paragraph, then: (A) if such Disposition involves all (not merely substantially all) of the properties and assets of the Liberty Media Group, redeem all outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock in exchange for cash and/or securities or other property (other than Common Stock) in an aggregate amount equal to the product of the Adjusted Liberty Media Group Outstanding Interest Fraction as of the date of such redemption and the Liberty Media Group Net Proceeds, such aggregate amount to be allocated (subject to the provisions described in the last sentence of the penultimate paragraph under this caption) to shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock in the ratio of the number of shares of each such series outstanding (so that the amount of consideration paid for the redemption of each share of Series A Liberty Media Group Common Stock and each share of Series B Liberty Media Group Common Stock is the same); or (B) if such Disposition involves substantially all (but not all) of the properties and assets of the Liberty Media Group, apply an aggregate amount of cash and/or securities or other property (other than Common Stock) equal to the product of the Liberty Media Group Outstanding Interest Fraction as of the date shares are selected for redemption and the Liberty Media Group Net Proceeds of such Disposition to the redemption of outstanding shares of Series A Liberty Media Group Common Stock 45 and Series B Liberty Media Group Common Stock, such aggregate amount to be allocated (subject to the provisions described in the last sentence of the penultimate paragraph under this caption) to shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock in the ratio of the number of shares of each such series outstanding, and the number of shares of each such series to be redeemed to equal the lesser of (x) the whole number nearest the number determined by dividing the aggregate amount so allocated to the redemption of such series by the average Market Value of one share of Series A Liberty Media Group Common Stock during the ten-Trading Day period beginning on the 16th Trading Day following the consummation of such Disposition and (y) the number of shares of such series outstanding (so that the amount of consideration paid for the redemption of each share of Series A Liberty Media Group Common Stock and each share of Series B Liberty Media Group Common Stock is the same); or (iii) convert (A) each outstanding share of Series A Liberty Media Group Common Stock into a number (or fraction) of fully paid and nonassessable shares of Series A TCI Group Common Stock and (B) each outstanding share of Series B Liberty Media Group Common Stock into a number (or fraction) of fully paid and nonassessable shares of Series B TCI Group Common Stock, in each case equal to 110% of the average daily ratio (calculated to the nearest five decimal places) of the Market Value of one share of Series A Liberty Media Group Common Stock to the Market Value of one share of Series A TCI Group Common Stock during the ten-Trading Day period referred to in clause (ii)(B) of this paragraph. The Company may elect to pay the dividend or redemption price referred to in clause (i) or (ii) of the second paragraph under this caption "--Mandatory Dividend, Redemption or Conversion or Liberty Media Group Common Stock" either in the same form as the proceeds of the Disposition were received or in any other combination of cash or securities or other property (other than Common Stock) that the Board of Directors determines will have an aggregate market value on a fully distributed basis, of not less than the amount of the Liberty Media Group Net Proceeds. If the dividend or redemption price is paid in the form of securities of an issuer other than the Company, the Board of Directors may determine either to (i) pay the dividend or redemption price in the form of separate classes or series of securities, with one class or series of such securities to holders of Series A Liberty Media Group Common Stock and another class or series of securities to holders of Series B Liberty Media Group Common Stock, provided that such securities (and, if such securities are convertible into or exercisable or exchangeable for shares of another class or series of securities, the securities so issuable upon such conversion, exercise or exchange) do not differ in any respect other than their relative voting rights and related differences in designation, conversion, redemption and share distribution provisions, with holders of shares of Series B Liberty Media Group Common Stock receiving the class or series having the higher relative voting rights (without regard to whether such rights differ to a greater or lesser extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A Liberty Media Group Common Stock and the Series B Liberty Media Group Common Stock), provided that if such securities constitute capital stock of a Subsidiary of the Company, such rights will not differ to a greater extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A Liberty Media Group Common Stock and the Series B Liberty Media Group Common Stock, and otherwise such securities will be distributed on an equal per share basis, or (ii) pay the dividend or redemption price in the form of a single class of securities without distinction between the shares received by the holders of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock. The Related Business Transaction exception to the foregoing requirements would enable the Company to enter into transactions in which the properties or assets of the Liberty Media Group may be considered to be "disposed of" in exchange for equity securities of an entity engaged or proposing to engage in similar or complementary business areas to those of the Liberty Media Group while maintaining the capital structure and delineation of business groups of the Liberty Media Group. The effect of using the Adjusted Liberty Media Group Outstanding Interest Fraction, instead of the Liberty Media Group Outstanding Interest Fraction, in the determination of amounts to be paid in redemption of shares of Liberty Media Group Common Stock following a Disposition of all of the properties and assets of the Liberty Media Group is to allocate to the TCI Group a portion of the Liberty Media Group Net Proceeds of the 46 Disposition, in addition to the amount so allocated in respect of any Inter- Group Interest, sufficient to provide for the delivery of the portion of the consideration deliverable by the Company upon any post-Disposition conversion, exercise or exchange of Pre-Distribution Convertible Securities that is in substitution for shares of Liberty Media Group Common Stock that would have been issuable upon such conversion, exercise or exchange if it had occurred prior to such Distribution and to make similar provision for the Company's obligation in respect of any Committed Acquisition Shares that remain issuable. To the extent such Pre-Distribution Convertible Securities and Committed Acquisition Shares are included in the determination of the Adjusted Liberty Media Group Outstanding Interest Fraction, the Company's obligations in respect of such securities would not be a reduction in the calculation of the Liberty Media Group Net Proceeds. In the event any redemption of the Liberty Media Group Common Stock or conversion of the Liberty Media Group Common Stock into TCI Group Common Stock is made in circumstances in which securities or property are allocated to the TCI Group in respect of Pre- Distribution Convertible Securities, Committed Acquisition Shares or other Convertible Securities entitled to receive such securities or property upon conversion, exercise or exchange, the TCI Group will segregate and hold such securities or other property separate (in the case of any securities or property other than TCI Group Common Stock), or duly reserve shares of TCI Group Common Stock issuable upon such conversion, exercise or exchange, for the benefit of the holders of Pre-Distribution Convertible Securities, Committed Acquisition Shares or other Convertible Securities. In the event the holders of any such Pre-Distribution Convertible Securities or other Convertible Securities do not convert, exercise or exchange such securities prior to the expiration of any conversion or exercise right or the retirement of such security, or the acquisition relating to such Committed Acquisition Shares is not consummated (or any Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares are not converted, exercised or exchanged), then the securities or other property so reserved shall revert to the TCI Group and the former holders of Liberty Media Group Common Stock shall have no interest in such securities or property. At the time of any dividend made as a result of a Disposition referred to above, the TCI Group will be credited, and the Liberty Media Group will be charged (in addition to the charge for the dividend paid in respect of outstanding shares of Liberty Media Group Common Stock), with an amount equal to the product of (i) the aggregate amount paid in respect of such dividend times (ii) a fraction the numerator of which is the Liberty Media Group Inter- Group Interest Fraction and the denominator of which is the Liberty Media Group Outstanding Interest Fraction. The option to convert the Liberty Media Group Common Stock into TCI Group Common Stock in the event of a Disposition provides the Company with additional flexibility by allowing the Company to deliver consideration in the form of shares of TCI Group Common Stock rather than cash or securities or other properties. This alternative could be used, for example, in circumstances when the Company did not have sufficient legally available assets under the DGCL to pay the full amount of an otherwise required dividend or redemption or when the Company desired to retain such proceeds. If less than substantially all of the properties and assets of the Liberty Media Group were disposed of by the Company in one transaction, the Company would not be required to pay a dividend on, redeem or convert the outstanding shares of Liberty Media Group Common Stock, even if an additional transaction were consummated at a later time in which additional properties and assets of the Liberty Media Group were disposed of by the Company, which, together with the properties and assets disposed of in the first transaction, would have constituted substantially all of the properties and assets of the Liberty Media Group at the time of the first transaction, unless such transactions constituted a series of related transactions. The second transaction, however, could trigger such a requirement if, at the time of the second transaction, the properties and assets disposed of in such transaction constituted at least substantially all of the properties and assets of the Liberty Media Group at such time. If less than substantially all of the properties and assets of the Liberty Media Group were disposed of by the Company, the holders of the Liberty Media Group Common Stock would not be entitled to receive any dividend or have their shares redeemed or converted for TCI Group Common Stock, although the Board of Directors could determine, in its sole discretion, to pay a dividend on the Liberty Media Group Common Stock in an amount related to the proceeds of such Disposition. 47 Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock. Upon the Disposition in one transaction or a series of related transactions by the Company and its subsidiaries of all or substantially all of the properties and assets of the TCI Ventures Group to any one or more persons, entities or groups, the Company is required, on or prior to the 85th Trading Day following the consummation of such Disposition, to take one of the actions listed in the following paragraph. This requirement does not apply to a Disposition (a) in connection with the Disposition by the Company of all of the Company's properties and assets in one transaction or a series of related transactions in connection with the liquidation, dissolution or winding up of the Company, (b) by dividend, other distribution or redemption in accordance with any provision described under "--Conversion and Redemption--Redemption of TCI Ventures Group Common Stock in Exchange for Stock of Subsidiary" "-- Dividends," "--Share Distributions," or "--Liquidation Rights," (c) to any person, entity or group which the Company, directly or indirectly, after giving effect to the Disposition, controls or (d) in connection with a Related Business Transaction. For these purposes, "substantially all of the properties and assets of the TCI Ventures Group" means a portion of such properties and assets that represents at least 80% of the then-current market value (as determined by the Board of Directors) of the properties and assets of the TCI Ventures Group as of such date. The action the Company is required to take is to either: (i) subject to the limitations described above under "--Dividends," declare and pay a dividend in cash and/or securities or other property (other than a dividend or distribution of Common Stock) to the holders of the outstanding shares of TCI Ventures Group Common Stock equally on a share for share basis (subject to the provisions described in the second sentence of the third paragraph under this caption "--Mandatory Dividends, Redemption or Conversion of TCI Ventures Group Common Stock,") in an aggregate amount equal to the product of the TCI Ventures Group Outstanding Interest Fraction as of the record date for determining the holders entitled to receive such dividend and the TCI Ventures Group Net Proceeds of such Disposition; (ii) provided that there are assets of the Company legally available therefor and the TCI Ventures Group Available Dividend Amount would have been sufficient to pay a dividend in lieu thereof as described in clause (i) of this paragraph, then: (A) if such Disposition involves all (not merely substantially all) of the properties and assets of the TCI Ventures Group, redeem all outstanding shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock in exchange for cash and/or securities or other property (other than Common Stock) in an aggregate amount equal to the product of the Adjusted TCI Ventures Group Outstanding Interest Fraction as of the date of such redemption and the TCI Ventures Group Net Proceeds of such Disposition, such aggregate amount to be allocated (subject to the provisions described in the second sentence of the following paragraph) to shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock in the ratio of the number of shares of each such series outstanding (so that the amount of consideration paid for the redemption of each share of Series A TCI Ventures Group Common Stock and each share of Series B TCI Ventures Group Common Stock is the same); or (B) if such Disposition involves substantially all (but not all) of the properties and assets of the TCI Ventures Group, apply an aggregate amount of cash and/or securities or other property (other than Common Stock) equal to the product of the TCI Ventures Group Outstanding Interest Fraction as of the date shares are selected for redemption and the TCI Ventures Group Net Proceeds of such Disposition to the redemption of outstanding shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock, such aggregate amount to be allocated (subject to the provisions described in the second sentence of the following paragraph) to shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock in the ratio of the number of shares of each such series outstanding, with the number of shares of each such series to be redeemed to equal the lesser of (x) the whole number nearest the number determined by dividing the aggregate amount so allocated to the redemption of such series by the average Market Value of one 48 share of Series A TCI Ventures Group Common Stock during the ten- Trading Day period beginning on the 16th Trading Day following the consummation of such Disposition and (y) the number of shares of such series outstanding (so that the amount of consideration paid for the redemption of each share of Series A TCI Ventures Group Common Stock and each share of Series B TCI Ventures Group Common Stock is the same); or (iii) convert (A) each outstanding share of Series A TCI Ventures Group Common Stock into a number (or fraction) of fully paid and nonassessable shares of Series A TCI Group Common Stock and (B) each outstanding share of Series B TCI Ventures Group Common Stock into a number (or fraction) of fully paid and nonassessable shares of Series B TCI Group Common Stock, in each case equal to 110% of the average daily ratio (calculated to the nearest five decimal places) of the Market Value of one share of Series A TCI Ventures Group Common Stock to the Market Value of one share of Series A TCI Group Common Stock during the ten-Trading Day period referred to in clause (ii)(B) of this paragraph. The Company may elect to pay the dividend or redemption price referred to in clause (i) or (ii) of the second paragraph under this caption "--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock" either in the same form as the proceeds of the Disposition were received or in any other combination of cash or securities or other property (other than Common Stock) that the Board of Directors determines will have an aggregate market value on a fully distributed basis, of not less than the amount of the TCI Ventures Group Net Proceeds. If the dividend or redemption price is paid in the form of securities of an issuer other than the Company, the Board of Directors may determine either to (i) pay the dividend or redemption price in the form of separate classes or series of securities, with one class or series of such securities to holders of Series A TCI Ventures Group Common Stock and another class or series of securities to holders of Series B TCI Ventures Group Common Stock, provided that such securities (and, if such securities are convertible into or exercisable or exchangeable for shares of another class or series of securities, the securities so issuable upon such conversion, exercise or exchange) do not differ in any respect other than their relative voting rights and related differences in designation, conversion, redemption and share distribution provisions, with holders of shares of Series B TCI Ventures Group Common Stock receiving the class or series having the higher relative voting rights (without regard to whether such rights differ to a greater or lesser extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock), provided that if such securities constitute capital stock of a Subsidiary of the Company, such rights will not differ to a greater extent than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock, and otherwise such securities will be distributed on an equal per share basis, or (ii) pay the dividend or redemption price in the form of a single class of securities without distinction between the shares received by the holders of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock. The Related Business Transaction exception to the foregoing requirements would enable the Company to enter into transactions in which the properties or assets of the TCI Ventures Group may be considered to be "disposed of" in exchange for equity securities of an entity engaged or proposing to engage in similar or complementary business areas to those of the TCI Ventures Group while maintaining the capital structure and delineation of business groups of the TCI Ventures Group. The effect of using the Adjusted TCI Ventures Group Outstanding Interest Fraction, instead of the TCI Ventures Group Outstanding Interest Fraction, in the determination of amounts to be paid in redemption of shares of TCI Ventures Group Common Stock following a Disposition of all of the properties and assets of the TCI Ventures Group is to allocate to the TCI Group a portion of the TCI Ventures Group Net Proceeds of the Disposition, in addition to the amount so allocated in respect of any Inter-Group Interest, sufficient to provide for the delivery of the portion of the consideration deliverable by the Company upon any post-Disposition conversion, exercise or exchange of Pre- Exchange Offer Securities that is in substitution for shares of TCI Ventures Group Common Stock that would have been issuable upon such conversion, exercise or exchange if it had occurred prior to such Disposition. To the extent such Pre-Exchange Offer Securities are included in the determination of the Adjusted TCI Ventures Group Outstanding Interest Fraction, the Company's obligations in 49 respect of such securities would not be a reduction in the calculation of the TCI Ventures Group Net Proceeds. In the event any redemption of the TCI Ventures Group Common Stock or conversion of the TCI Ventures Group Common Stock into TCI Group Common Stock is made in circumstances in which securities or property are allocated to the TCI Group in respect of Pre-Exchange Offer Securities or other Convertible Securities entitled to receive such securities or property upon conversion, exercise or exchange, the TCI Group will segregate and hold such securities or other property separate (in the case of any securities or property other than TCI Group Common Stock), or duly reserve shares of TCI Group Common Stock issuable upon such conversion, exercise or exchange, for the benefit of the holders of Pre-Exchange Offer Securities or other Convertible Securities. In the event the holders of any such Pre- Exchange Offer Securities or other Convertible Securities do not convert, exercise or exchange such securities prior to the expiration of any conversion, exercise or exchange right or the retirement of such security, then the securities or other property so reserved shall revert to the TCI Group and the former holders of TCI Ventures Group Common Stock shall have no interest in such securities or property. At the time of any dividend made as a result of a Disposition referred to above, the TCI Group will be credited, and the TCI Ventures Group will be charged (in addition to the charge for the dividend paid in respect of outstanding shares of TCI Ventures Group Common Stock), with an amount equal to the product of (i) the aggregate amount paid in respect of such dividend times (ii) a fraction the numerator of which is the TCI Ventures Group Inter- Group Interest Fraction and the denominator of which is the TCI Ventures Group Outstanding Interest Fraction. The option to convert the TCI Ventures Group Common Stock into TCI Group Common Stock in the event of a Disposition provides the Company with additional flexibility by allowing the Company to deliver consideration in the form of shares of TCI Group Common Stock rather than cash or securities or other properties. This alternative could be used, for example, in circumstances when the Company did not have sufficient legally available assets under the DGCL to pay the full amount of an otherwise required dividend or redemption or when the Company desired to retain such proceeds. If less than substantially all of the properties and assets of the TCI Ventures Group were disposed of by the Company in one transaction, the Company would not be required to pay a dividend on, redeem or convert the outstanding shares of TCI Ventures Group Common Stock, even if an additional transaction were consummated at a later time in which additional properties and assets of the TCI Ventures Group were disposed of by the Company, which, together with the properties and assets disposed of in the first transaction, would have constituted substantially all of the properties and assets of the TCI Ventures Group at the time of the first transaction, unless such transactions constituted a series of related transactions. The second transaction, however, could trigger such a requirement if, at the time of the second transaction, the properties and assets disposed of in such transaction constituted at least substantially all of the properties and assets of the TCI Ventures Group at such time. If less than substantially all of the properties and assets of the TCI Ventures Group were disposed of by the Company, the holders of the TCI Ventures Group Common Stock would not be entitled to receive any dividend or have their shares redeemed or converted for TCI Group Common Stock, although the Board of Directors could determine, in its sole discretion, to pay a dividend on the TCI Ventures Group Common Stock in an amount related to the proceeds of such Disposition. Redemption of Liberty Media Group Common Stock in Exchange for Stock of Subsidiary. At any time at which all of the assets and liabilities attributed to the Liberty Media Group have become and continue to be held directly or indirectly by any one or more corporations that are Qualifying Subsidiaries (the "Liberty Media Group Subsidiaries"), the Board of Directors may, subject to the availability of assets of the Company legally available therefor, redeem, on a pro rata basis, all of the outstanding shares of Liberty Media Group Common Stock in exchange for an aggregate number of outstanding fully paid and nonassessable shares of common stock of each Liberty Media Group Subsidiary equal to the product of the Adjusted Liberty Media Group Outstanding Interest Fraction and the number of outstanding shares of common stock of such Liberty Media Group Subsidiary that are owned by the Company. The effect of using the Adjusted Liberty Media Group Outstanding Interest Fraction, instead of the Liberty Media Group Outstanding Interest Fraction, in the determination of the number 50 of shares of the Liberty Media Group Subsidiaries deliverable in such a redemption is to allocate to the TCI Group a portion of the shares of the Liberty Media Group Subsidiaries, in addition to the number of such shares so allocated in respect of any Inter-Group Interest, sufficient to provide for the delivery of the consideration deliverable by the Company upon any post- redemption conversion, exercise or exchange of Pre-Distribution Convertible Securities that become so payable in substitution for shares of Liberty Media Group Common Stock that would have been issuable upon such conversion, exercise or exchange if it had occurred prior to such redemption and to make similar provision for the Company's obligations in respect of any Committed Acquisition Shares that remain issuable. In effecting such a redemption, the Board of Directors may determine either to (i) redeem shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock in exchange for shares of separate classes or series of common stock of each Liberty Media Group Subsidiary with relative voting rights and related differences in designation, conversion, redemption and share distribution provisions not greater than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, with holders of shares of Series B Liberty Media Group Common Stock receiving the class or series having the higher relative voting rights, or (ii) redeem shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock in exchange for shares of a single class of common stock of each Liberty Media Group Subsidiary without distinction between the shares distributed to the holders of the two series of Liberty Media Group Common Stock. If the Company determines to undertake a redemption as described in clause (i) of the preceding sentence, the outstanding shares of common stock of each Liberty Media Group Subsidiary not distributed to holders of Liberty Media Group Common Stock shall consist solely of the class or series having the lower relative voting rights. Redemption of TCI Ventures Group Common Stock in Exchange for Stock of Subsidiary. At any time at which all of the assets and liabilities attributed to the TCI Ventures Group have become and continue to be held directly or indirectly by any one or more corporations that are Qualifying Subsidiaries (the "TCI Ventures Group Subsidiaries"), the Board of Directors may, subject to the availability of assets of the Company legally available therefor, redeem on a pro rata basis, all of the outstanding shares of TCI Ventures Group Common Stock in exchange for an aggregate number of outstanding, fully paid and nonassessable shares of common stock of each TCI Ventures Group Subsidiary equal to the product of the Adjusted TCI Ventures Group Outstanding Interest Fraction and the number of outstanding shares of common stock of such TCI Ventures Group Subsidiary that are owned by the Company. The effect of using the Adjusted TCI Ventures Group Outstanding Interest Fraction, instead of the TCI Ventures Group Outstanding Interest Fraction, in the determination of the number of shares of the TCI Ventures Group Subsidiaries deliverable in such a redemption is to allocate to the TCI Group a portion of the shares of the TCI Ventures Group Subsidiaries, in addition to the number of such shares so allocated in respect of any Inter-Group Interest, sufficient to provide for the delivery of the consideration deliverable by the Company upon any post- redemption conversion, exercise or exchange of Pre-Exchange Offer Securities that become so payable in substitution for shares of TCI Ventures Group Common Stock that would have been issuable upon such conversion, exercise or exchange if it had occurred prior to such redemption. In effecting such a redemption, the Board of Directors may determine either to (i) redeem shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock in exchange for shares of separate classes or series of common stock of each TCI Ventures Group Subsidiary with relative voting rights and related differences in designation, conversion, redemption and share distribution provisions not greater than the corresponding differences in voting rights, designation, conversion, redemption and share distribution provisions between the Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock, with holders of shares of Series B TCI Ventures Group Common Stock receiving the class or series having the higher relative voting rights, or (ii) redeem shares of Series A TCI Ventures Group Common Stock and Series B TCI Ventures Group Common Stock in exchange for shares of a single class of common stock of each TCI Ventures Group Subsidiary without distinction between the shares distributed to the holders of the two series of TCI Ventures Group Common Stock. 51 Certain Provisions Respecting Convertible Securities. Unless the provisions of any class or series of Pre-Distribution Convertible Securities or Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares provide specifically to the contrary, after any conversion date or redemption date on which all outstanding shares of Liberty Media Group Common Stock were converted or redeemed, any share of Liberty Media Group Common Stock that is issued on conversion, exercise or exchange of any Pre-Distribution Convertible Securities or any Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares will, immediately upon issuance pursuant to such conversion, exercise or exchange and without any notice or any other action on the part of the Company or the Board of Directors or the holder of such share of Liberty Media Group Common Stock, be converted into or redeemed in exchange for, as applicable, the kind and amount of shares of capital stock, cash and/or other securities or property that a holder of such Pre-Distribution Convertible Securities or any Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares would have been entitled to receive as a result of such conversion and redemption had such securities been converted, exercised or exchanged immediately prior to such action. With respect to any Convertible Securities that are convertible into or exercisable or exchangeable for shares of Liberty Media Group Common Stock and which are created, established or otherwise first authorized for issuance subsequent to the record date for the Liberty Media Group Distribution (other than Pre- Distribution Convertible Securities and Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares), the terms and provisions of which do not provide for adjustments specifying the kind and amount of capital stock, cash and/or securities or other property that such holder would be entitled to receive upon the conversion, exercise or exchange of such Convertible Securities following any conversion date or redemption date on which all outstanding shares of Liberty Media Group Common Stock were converted or redeemed, then upon such conversion, exercise or exchange of such Convertible Securities, any share of Liberty Media Group Common Stock that is issued on conversion, exercise or exchange of any such Convertible Securities will, immediately upon issuance and without any notice or any other action on the part of the Company or the Board of Directors or the holder of such share of Liberty Media Group Common Stock, be redeemed in exchange for, to the extent assets of the Company are legally available therefor, the amount of $.01 per share in cash. Unless the provisions of the Pre-Exchange Offer Securities provide specifically to the contrary, after any conversion date or redemption date on which all outstanding shares of TCI Ventures Group Common Stock were converted or redeemed, any share of TCI Ventures Group Common Stock that is issued on conversion, exercise or exchange of any Pre-Exchange Offer Securities will, immediately upon issuance pursuant to such conversion, exercise or exchange and without any notice or any other action on the part of the Company or its Board of Directors or the holder of such share of TCI Ventures Group Common Stock, be converted into or redeemed in exchange for, as applicable, the kind and amount of shares of capital stock, cash and/or securities or other property that a holder of such Pre-Exchange Offer Securities would have been entitled to receive as a result of such conversion and redemption had such Pre-Exchange Offer Securities been converted, exercised or exchanged immediately prior to such action. Unless the provisions of any class or series of Convertible Securities (other than Pre-Exchange Offer Securities) which are convertible into or exercisable or exchangeable for shares of TCI Ventures Group Common Stock provide specifically to the contrary, after any conversion date or redemption date on which all outstanding shares of TCI Ventures Group Common Stock were converted or redeemed, any share of TCI Ventures Group Common Stock that is issued on conversion, exercise or exchange of any such Convertible Securities will, immediately upon issuance pursuant to such conversion, exercise or exchange and without any notice or any other action on the part of the Company or its Board of Directors or the holder of such share of TCI Ventures Group Common Stock, be redeemed in exchange for, to the extent assets of the Company are legally available therefor, the amount of $.01 per share in cash. General Conversion and Redemption Provisions. Not later than the 10th Trading Day following the consummation of a Disposition referred to above under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," the Company will announce publicly by press release (i) the Liberty Media Group Net Proceeds of such Disposition, (ii) the number of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, (iii) the 52 number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which Convertible Securities are then convertible, exercisable or exchangeable and the conversion, exercise or exchange prices thereof (and stating which, if any, of such Convertible Securities constitute Pre-Distribution Convertible Securities or Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares) and the number of Committed Acquisition Shares issuable, (iv) the Liberty Media Group Outstanding Interest Fraction as of a recent date preceding the date of such notice and (v) the Adjusted Liberty Media Group Outstanding Interest Fraction as of a recent date preceding the date of such notice. Not earlier than the 26th Trading Day and not later than the 30th Trading Day following the consummation of such Disposition, the Company will announce publicly by press release which of the actions described in clause (i), (ii) or (iii) of the second paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock" it has irrevocably determined to take. If the Company determines to pay a dividend described in clause (i) of the second paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," the Company will, not later than the 30th Trading Day following the consummation of such Disposition, cause to be given to each holder of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, a notice setting forth (i) the record date for determining holders entitled to receive such dividend, which will be not earlier than the 40th Trading Day and not later than the 50th Trading Day following the consummation of such Disposition, (ii) the anticipated payment date of such dividend (which will not be more than 85 Trading Days following the consummation of such Disposition), (iii) the kind of shares of capital stock, cash and/or other securities or property to be distributed in respect of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, (iv) the Liberty Media Group Net Proceeds of such Disposition, (v) the Liberty Media Group Outstanding Interest Fraction as of a recent date preceding the date of such notice, and (vi) the number of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock and the number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which outstanding Convertible Securities are then convertible, exercisable or exchangeable and the conversion, exercise or exchange prices thereof. If the Company determines to undertake a redemption of shares of Liberty Media Group Common Stock following a Disposition of all (not merely substantially all) of the properties and assets of the Liberty Media Group as described in clause (ii)(A) of the second paragraph under "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," the Company will cause to be given to each holder of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock a notice setting forth (i) a statement that all shares of Liberty Media Group Common Stock outstanding on the redemption date will be redeemed, (ii) the redemption date (which will not be more than 85 Trading Days following the consummation of such Disposition), (iii) the kind of shares of capital stock, cash and/or other securities or property to be paid as a redemption price in respect of shares of Liberty Media Group Common Stock outstanding on the redemption date, (iv) the Liberty Media Group Net Proceeds of such Disposition, (v) the Adjusted Liberty Media Group Outstanding Interest Fraction as of a recent date preceding the date of such notice, (vi) the place or places where certificates for shares of Liberty Media Group Common Stock, properly endorsed or assigned for transfer (unless the Company waives such requirement), are to be surrendered for delivery of certificates for shares of such capital stock, cash and/or other securities or property, and (vii) the number of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock and the number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which outstanding Convertible Securities are then convertible, exercisable or exchangeable and the conversion, exercise or exchange prices thereof (and stating which, if any, of such Convertible Securities constitute Pre-Distribution Convertible Securities or Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares) and the number of Committed Acquisition Shares issuable. Such notice will be sent not less than 35 Trading Days nor more than 45 Trading Days prior to the redemption date. 53 If the Company determines to undertake a redemption of shares of Liberty Media Group Common Stock following a Disposition of substantially all (but not all) of the properties and assets of the Liberty Media Group as described in clause (ii)(B) of the second paragraph under "--Conversion and Redemption-- Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," the Company will, not later than the 30th Trading Day following the consummation of such Disposition, cause to be given to each holder of record of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock a notice setting forth (i) a date not earlier than the 40th Trading Day and not later than the 50th Trading Day following the consummation of such Disposition which will be the date on which shares of the Liberty Media Group Common Stock then outstanding will be selected for redemption, (ii) the anticipated redemption date (which will not be more than 85 Trading Days following the consummation of such Disposition), (iii) the kind of shares of capital stock, cash and/or other securities or property to be paid as a redemption price in respect of shares of Liberty Media Group Common Stock selected for redemption, (iv) the Liberty Media Group Net Proceeds of such Disposition, (v) the Liberty Media Group Outstanding Interest Fraction as of a recent date preceding the date of such notice, (vi) the number of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock and the number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which outstanding Convertible Securities are then convertible, exercisable or exchangeable and the conversion, exercise or exchange prices thereof and (vii) a statement that the Company will not be required to register a transfer of any shares of Liberty Media Group Common Stock for a period of 15 Trading Days next preceding the date referred to in clause (i) of this sentence. Promptly following the date referred to in clause (i) of the preceding sentence, but not earlier than the 40th Trading Day and not later than the 50th Trading Day following the consummation of such Disposition, the Company will cause to be given to each holder of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock to be redeemed, a notice setting forth (i) the number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock held by such holder to be redeemed, (ii) a statement that such shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock will be redeemed, (iii) the redemption date (which will not be more than 85 Trading Days following the consummation of such Disposition), (iv) the kind and per share amount of shares of capital stock, cash and/or other securities or property to be received by such holder with respect to each share of such Liberty Media Group Common Stock to be redeemed, including details as to the calculation thereof, and (v) the place or places where certificates for shares of such Liberty Media Group Common Stock, properly endorsed or assigned for transfer (unless the Company waives such requirement), are to be surrendered for delivery of certificates for shares of such capital stock, cash and/or other securities or property. The outstanding shares of Liberty Media Group Common Stock to be redeemed will be redeemed by the Company pro rata among the holders of Liberty Media Group Common Stock or by such other method as may be determined by the Board of Directors to be equitable. In the event of any conversion as described above under "--Conversion and Redemption --Conversion of Liberty Media Group Common Stock at the Option of the Company" or "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock," the Company will cause to be given to each holder of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock a notice setting forth (i) a statement that all outstanding shares of Liberty Media Group Common Stock will be converted, (ii) the conversion date (which will not be more than 85 Trading Days following the consummation of such Disposition in the event of a conversion pursuant to the provisions described under "-- Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common Stock" and which will not be more than 120 days after the Appraisal Date in the event of a conversion pursuant to the provisions described under "--Conversion and Redemption--Conversion of Liberty Media Group Common Stock at the Option of the Company"), (iii) the per share number (or fraction) of shares of Series A TCI Group Common Stock or Series B TCI Group Common Stock, as applicable, to be received with respect to each share of Series A Liberty Media Group Common Stock or Series B Liberty Media Group Common Stock, including details as to the calculation thereof, (iv) the place or places where certificates for shares of Liberty Media Group Common Stock, properly endorsed or assigned for transfer (unless the Company waives such requirement), are to be surrendered, and (v) the number of outstanding shares 54 of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock, the number of Committed Acquisition Shares issuable and the number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which outstanding Convertible Securities are then convertible, exercisable or exchangeable and the conversion, exercise or exchange prices thereof. Such notice will be sent not less than 35 Trading Days nor more than 45 Trading Days prior to the conversion date. If the Company determines to redeem shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock as described above under "--Conversion and Redemption--Redemption of Liberty Media Group Common Stock in Exchange for Stock of Subsidiary," the Company will promptly cause to be given to each holder of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock a notice setting forth (i) a statement that all outstanding shares of Liberty Media Group Common Stock will be redeemed in exchange for shares of common stock of the Liberty Media Group Subsidiaries, (ii) the redemption date, (iii) the Adjusted Liberty Media Group Outstanding Interest Fraction as of a recent date preceding the date of such notice, (iv) the place or places where certificates for shares of Liberty Media Group Common Stock, properly endorsed or assigned for transfer (unless the Company waives such requirement), are to be surrendered for delivery of certificates for shares of common stock of the Liberty Media Group Subsidiaries, and (v) the number of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock and the number of shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock into or for which outstanding Convertible Securities are then convertible, exercisable or exchangeable and the conversion, exercise or exchange prices thereof (and stating which, if any, of such Convertible Securities constitute Pre-Distribution Convertible Securities or Convertible Securities which are convertible into or exercisable or exchangeable for Committed Acquisition Shares) and the number of Committed Acquisition Shares issuable. Such notice will be sent by not less than 35 Trading Days nor more than 45 Trading Days prior to the redemption date. In each case in which a notice is required to be given to holders of outstanding shares of Series A Liberty Media Group Common Stock and Series B Liberty Media Group Common Stock in accordance with the preceding five paragraphs (other than a notice to holders of shares selected for redemption), notice shall also be given, within the required time period, to each holder of Convertible Securities that are convertible into or exercisable or exchangeable for shares of either such series (unless provision for such notice is otherwise made pursuant to the terms of such Convertible Securities), which notice shall include, in addition to all of the information set forth in the corresponding notice to holders of Liberty Media Group Common Stock, a statement to the effect that the holders of such Convertible Securities will be entitled to receive the dividend, participate in the redemption of shares following a Disposition or in the selection of shares for redemption, participate in the conversion of shares or participate in the redemption of shares in exchange for stock of the Liberty Media Group Subsidiaries only if such holder appropriately converts, exercises or exchanges such Convertible Securities on or prior to the record date for the dividend, redemption date, date fixed for selection of shares to be redeemed or conversion date, as applicable, set forth in such notice. In the case of a redemption or conversion of shares of Liberty Media Group Common Stock, the notice to holders of Convertible Securities shall also state what, if anything, such holders will be entitled to receive pursuant to the terms of such Convertible Securities or, if applicable, the provision described under "--Conversion and Redemption--Certain Provisions Respecting Convertible Securities" if such holders convert, exercise or exchange such Convertible Securities following the redemption date or conversion date, as applicable. All notices required to be given in accordance with the preceding paragraphs will be sent to a holder by first-class mail, postage prepaid, at the holder's address as the same appears on the transfer books of the Company. Neither the failure to mail any notice to any particular holder of Liberty Media Group Common Stock or of Convertible Securities nor any defect therein will affect the sufficiency thereof with respect to any other holder of outstanding shares of Liberty Media Group Common Stock or of Convertible Securities, or the validity of any conversion or redemption. The Company will not be required to issue or deliver fractional shares of any class of capital stock or any fractional securities to any holder of Liberty Media Group Common Stock upon any conversion, redemption, 55 dividend or other distribution described above. In connection with the determination of the number of shares of any class of capital stock that is issuable or the amount of securities that is deliverable to any holder of record upon any such conversion, redemption, dividend or other distribution (including any fractions of shares or securities), the Company may aggregate the number of shares of Liberty Media Group Common Stock held at the relevant time by such holder of record. If the number of shares of any class of capital stock or the amount of securities remaining to be issued or delivered to any holder of Liberty Media Group Common Stock is a fraction, the Company will, if such fraction is not issued or delivered to such holder, pay a cash adjustment in respect of such fraction in an amount equal to the fair market value of such fraction on the fifth Trading Day prior to the date such payment is to be made (without interest). For purposes of the preceding sentence, "fair market value" of any fraction will be (i) in the case of any fraction of a share of capital stock of the Company, the product of such fraction and the Market Value of one share of such capital stock and (ii) in the case of any other fractional security, such value as is determined by the Board of Directors. No adjustments in respect of dividends will be made upon the conversion or redemption of any shares of Liberty Media Group Common Stock; provided, however, that if the conversion date or the redemption date with respect to the Liberty Media Group Common Stock is subsequent to the record date for the payment of a dividend or other distribution thereon or with respect thereto, the holders of shares of Liberty Media Group Common Stock at the close of business on such record date will be entitled to receive the dividend or other distribution payable on or with respect to such shares on the date set for payment of such dividend or other distribution, notwithstanding the conversion or redemption of such shares or the Company's default in payment of the dividend or distribution due on such date. Before any holder of shares of Liberty Media Group Common Stock will be entitled to receive certificates representing shares of any kind of capital stock or cash and/or securities or other property to be received by such holder with respect to any conversion or redemption of shares of Liberty Media Group Common Stock, such holder is required to surrender at such place as the Company will specify certificates for such shares, properly endorsed or assigned for transfer (unless the Company waives such requirement). The Company will as soon as practicable after surrender of certificates representing shares of Liberty Media Group Common Stock deliver to the person for whose account such shares were so surrendered, or to the nominee or nominees of such person, certificates representing the number of whole shares of the kind of capital stock or cash and/or securities or other property to which such person is entitled, together with any payment for fractional securities referred to above. If less than all of the shares of Liberty Media Group Common Stock represented by any one certificate are to be redeemed, the Company will issue and deliver a new certificate for the shares of Liberty Media Group Common Stock not redeemed. The Company will not be required to register a transfer of (i) any shares of Liberty Media Group Common Stock for a period of 15 Trading Days next preceding any selection of shares of Liberty Media Group Common Stock to be redeemed or (ii) any shares of Liberty Media Group Common Stock selected or called for redemption. Shares selected for redemption may not thereafter be converted pursuant to the provisions described under the caption "--Conversion at the Option of the Holder." From and after any applicable conversion date or redemption date, all rights of a holder of shares of Liberty Media Group Common Stock that were converted or redeemed will cease except for the right, upon surrender of the certificates representing shares of Liberty Media Group Common Stock, to receive certificates representing shares of the kind and amount of capital stock or cash and/or securities or other property for which such shares were converted or redeemed, together with any payment for fractional securities, and such holder will have no other or further rights in respect of the shares of Liberty Media Group Common Stock so converted or redeemed, including, but not limited to, any rights with respect to any cash, securities or other property which are reserved or otherwise designated by the Company as being held for the satisfaction of the Company's obligations to pay or deliver any cash, securities or other property upon the conversion, exercise or exchange of any Convertible Securities outstanding as of the date of such conversion or redemption or any Committed Acquisition Shares which may then be issuable. No holder of a certificate that, immediately prior to the applicable conversion date or redemption date for the Liberty Media Group Common Stock, represented shares of Liberty Media Group Common Stock will be entitled to receive any dividend or other distribution with respect to shares of any kind 56 of capital stock into or in exchange for which the Liberty Media Group Common Stock was converted or redeemed until surrender of such holder's certificate for a certificate or certificates representing shares of such kind of capital stock. Upon such surrender, there will be paid to the holder the amount of any dividends or other distributions (without interest) which theretofore became payable with respect to a record date after the conversion date or redemption date, as the case may be, but that were not paid by reason of the foregoing, with respect to the number of whole shares of the kind of capital stock represented by the certificate or certificates issued upon such surrender. From and after a conversion date or redemption date, as the case may be, of Liberty Media Group Common Stock, the Company will, however, be entitled to treat the certificates for shares of Liberty Media Group Common Stock that have not yet been surrendered for conversion or redemption as evidencing the ownership of the number of whole shares of the kind or kinds of capital stock for which the shares of Liberty Media Group Common Stock represented by such certificates have been converted or redeemed, notwithstanding the failure to surrender such certificates. The Company will pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect of the issue or delivery of any shares of capital stock and/or other securities on conversion or redemption of shares of Liberty Media Group Common Stock. The Company will not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issue and delivery of any shares of capital stock in a name other than that in which the shares of Liberty Media Group Common Stock so converted or redeemed were registered and no such issue or delivery will be made unless and until the person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid. Provisions substantially the same as those described under this caption "-- General Conversion and Redemption Provisions," apply in the event of a Disposition of all or substantially all of the properties and assets of the TCI Ventures Group and a determination of the Company to pay a dividend on or undertake a partial or complete redemption of the TCI Ventures Group Common Stock following such Disposition, in the event of any conversion of the TCI Ventures Group Common Stock as described under "--Conversion and Redemption-- Conversion of TCI Ventures Group Common Stock at the Option of the Company" or "--Conversion and Redemption--Mandatory Dividend, Redemption or Conversion of TCI Ventures Group Common Stock," and in the event of a redemption of the TCI Ventures Group Common Stock in exchange for stock of one or more subsidiaries as described under "--Conversion and Redemption--Redemption of TCI Ventures Group Common Stock in Exchange for Stock of Subsidiary." Liquidation Rights In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Company and subject to the prior payment in full of the preferential amounts to which any class or series of Preferred Stock is entitled, (i) the holders of the shares of TCI Group Common Stock will share equally, on a share for share basis, in a percentage of the funds of the Company remaining for distribution to its common stockholders equal to 100% multiplied by the average daily ratio (expressed as a decimal) of W/Z for the 20-Trading Day period ending on the Trading Day prior to the date of the public announcement of such liquidation, dissolution or winding up, (ii) the holders of the shares of Liberty Media Group Common Stock will share equally, on a share for share basis, in a percentage of the funds of the Company remaining for distribution to its common stockholders equal to 100% multiplied by the average daily ratio (expressed as a decimal) of X/Z for such 20-Trading Day period and (iii) the holders of the shares of TCI Ventures Group Common Stock will share equally, on a share for share basis, in a percentage of the funds of the Company remaining for distribution to its common stockholders equal to 100% multiplied by the average daily ratio (expressed as a decimal) of Y/Z for such 20-Trading Day period, where W is the aggregate Market Capitalization of the Series A TCI Group Common Stock and the Series B TCI Group Common Stock, X is the aggregate Market Capitalization of the Series A Liberty Media Group Common Stock and the Series B Liberty Media Group Common Stock, Y is the aggregate Market Capitalization of the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock, and Z is the 57 aggregate Market Capitalization of the Series A TCI Group Common Stock, the Series B TCI Group Common Stock, the Series A Liberty Media Group Common Stock, the Series B Liberty Media Group Common Stock, the Series A TCI Ventures Group Common Stock and the Series B TCI Ventures Group Common Stock. Neither a consolidation, merger nor sale of assets will be construed to be a "liquidation," "dissolution" or "winding up" of the Company. No holder of Liberty Media Group Common Stock or TCI Ventures Group Common Stock will have any special right to receive specific assets of the Liberty Media Group or the TCI Ventures Group, as the case may be, in the case of any dissolution, liquidation or winding up of the Company. Determinations by the Board of Directors The Charter provides that any determinations made by the Board of Directors under any provision described under "Common Stock" will be final and binding on all stockholders of the Company, except as may otherwise be required by law. Such a determination would not be binding if it were established that the determination was made in breach of a fiduciary duty of the Board of Directors. The Company will prepare a statement of any such determination by the Board of Directors respecting the fair market value of any properties, assets or securities and will file such statement with the Secretary of the Company. Preemptive Rights Holders of the TCI Group Common Stock, the Liberty Media Group Common Stock and the TCI Ventures Group Common Stock do not have any preemptive rights to subscribe for any additional shares of capital stock or other obligations convertible into or exercisable for shares of capital stock that may hereafter be issued by the Company. PREFERRED STOCK General As of March 31, 1998, 1,620,026 shares of Class B Preferred Stock, 53,120 shares of Series C-TCI Group Preferred Stock, 70,575 shares of Series C- Liberty Media Group Preferred Stock, 6,021 shares of Series D Preferred Stock, 278,307 shares of Series F Preferred Stock, 6,547,294 shares of Series G Preferred Stock and 6,567,794 shares of Series H Preferred Stock were outstanding. On April 1, 1998, all of the outstanding shares of Series D Preferred Stock were redeemed to the extent not previously converted by the holders thereof pursuant to the terms thereof. All of the outstanding shares of Series F Preferred Stock and 67,536 shares of Class B Preferred Stock are held by subsidiaries of the Company. The following description of certain terms of the outstanding Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the Charter (including the Certificate of Designations with respect to each outstanding series of Series Preferred Stock). Class B Preferred Stock The holders of Class B Preferred Stock are entitled to receive cumulative dividends, when and as declared by the Company's Board of Directors out of unrestricted funds legally available therefor, in preference to dividends on Common Stock. Dividends accrue cumulatively (but without compounding) at an annual rate of 6% of the stated liquidation value of $100 per share (the "Stated Liquidation Value"), whether or not such dividends are declared or funds are legally available for payment of dividends. Accrued dividends are payable annually and, in the sole discretion of the Company's Board of Directors, may be declared and paid in cash, in shares of Series A TCI Group Common Stock or in any combination of the foregoing. Accrued dividends not 58 paid as provided above on any dividend payment date accumulate and such accumulated unpaid dividends may be declared and paid in cash, shares of Series A TCI Group Common Stock or any combination thereof at any time without reference to any regular dividend payment date, to holders of record of Class B Preferred Stock as of a special record date fixed by the Company's Board of Directors. No interest or additional dividends will accrue or be payable with respect to any dividend payment on the Class B Preferred Stock that may be in arrears or with respect to that portion of any other payment on the Class B Preferred Stock that is in arrears which consists of accumulated or accrued and unpaid dividends. Upon the liquidation, dissolution or winding up of the Company, the holders of Class B Preferred Stock will be entitled, after payment of preferential amounts on any class or series of Preferred Stock ranking prior to the Class B Preferred Stock with respect to liquidating distributions, to receive from the assets of the Company available for distribution to stockholders an amount in cash or property or a combination thereof, per share, equal to the Stated Liquidation Value thereof, plus all accumulated and accrued but unpaid dividends thereon to the date of payment. The Class B Preferred Stock is redeemable at the option of the Company, in whole at any time or in part from time to time, for a redemption price per share payable in cash equal to the Stated Liquidation Value thereof, plus all accumulated and accrued but unpaid dividends thereon to and including the redemption date. The Class B Preferred Stock is exchangeable at the option of the Company in whole but not in part at any time for junior subordinated debt securities of the Company ("Junior Exchange Notes"). If the Company exercises its optional exchange right, each holder of outstanding shares of Class B Preferred Stock will be entitled to receive in exchange therefor newly issued Junior Exchange Notes of a series authorized and established for the purpose of such exchange, the aggregate principal amount of which will be equal to the aggregate Stated Liquidation Value of the shares of Class B Preferred Stock so exchanged by such holder, plus all accumulated and accrued but unpaid dividends thereon to and including the exchange date. The Junior Exchange Notes will mature on the 15th anniversary of the date of issuance and will be subject to earlier redemption at the option of the Company, in whole or in part, for a redemption price equal to the principal amount thereof plus accrued but unpaid interest. Interest will accrue, and be payable annually, on the principal amount of the Junior Exchange Notes at a rate per annum to be determined prior to issuance by adding a spread of 215 basis points to the "Fifteen Year Treasury Rate" (as defined in the Indenture pursuant to which the Junior Exchange Notes will be issued). Interest will accrue on overdue principal at the same rate, but will not accrue on overdue interest. The Class B Preferred Stock ranks senior to the Common Stock and ranks junior to the Series C-TCI Group Preferred Stock, the Series C-Liberty Media Group Preferred Stock, the Series F Preferred Stock, the Series G Preferred Stock and the Series H Preferred Stock as to dividend rights, rights to redemption and rights on liquidation. The holders of Class B Preferred Stock have the right to vote, on the basis of one vote per share, together with the Common Stock and any class or series of Preferred Stock of the Company entitled to vote thereon, in any general election of directors of the Company. Except as provided above or required by the DGCL, the Class B Preferred Stock has no voting rights. Series Preferred Stock The Series Preferred Stock is issuable, from time to time, in one or more series, with such powers, designations, preferences and relative participating, optional or other rights, and qualifications, limitations or restrictions thereof, as is stated and expressed in a resolution or resolutions providing for the issue of each such series adopted by the TCI Board of Directors. All shares of any one series of the Series Preferred Stock are required to be alike in every particular. Except to the extent otherwise provided in the resolution or resolutions providing for the issue of any series of Series 59 Preferred Stock, the holders of shares of such series will have no voting rights except as may be required by Delaware law. Series C-TCI Group Preferred Stock and Series C-Liberty Media Group Preferred Stock Series C-TCI Group Preferred Stock. The liquidation value of the Series C- TCI Group Preferred Stock is $2,208.35 per share. The liquidation and redemption features of the Series C-TCI Group Preferred Stock, each of which is discussed in greater detail below, are determined by reference to such liquidation value. No dividends are required to be paid on the Series C-TCI Group Preferred Stock. Upon the liquidation, dissolution or winding up of the Company, holders of the Series C-TCI Group Preferred Stock will be entitled to receive from the assets of the Company available for distribution to stockholders an amount in cash, per share, equal to the liquidation value of the Series C-TCI Group Preferred Stock. The Series C-TCI Group Preferred Stock shall not rank junior to any other classes or series of stock of the Company in respect of the right to participate in any distribution upon liquidation, dissolution or winding up of the Company. The Series C-TCI Group Preferred Stock is subject to optional redemption by the Company at any time after August 8, 2001, in whole or in part, at a redemption price, per share, equal to the liquidation value per share of the Series C-TCI Group Preferred Stock. The Series C-TCI Group Preferred Stock is required to be redeemed by the Company at any time on or after August 8, 2001 at the option of the holder, in whole or in part (provided that the aggregate liquidation value of the shares to be redeemed is in excess of $1 million), in each case at a redemption price, per share, equal to the liquidation value. In the case of a redemption of shares of Series C-TCI Group Preferred Stock at the option of the holder, the Company may elect to pay the redemption price in cash or through the issuance of shares of Series A TCI Group Common Stock. In the event that the Company elects to issue shares of Series A TCI Group Common Stock in payment of the redemption price and, as of the redemption date, Bill Daniels, the original holder of all outstanding shares of Series C-TCI Group Preferred Stock, is deceased and the shares required to be redeemed are held by or for the benefit of a trust, regardless of whether such trust became effective during Mr. Daniel's lifetime or is a testamentary trust, or a public or private foundation established by Mr. Daniels, the, net proceeds from any open-market sale (within a period of time set forth in the certificate of designations for the Series C-TCI Group Preferred Stock) of the shares of Series A TCI Group Common Stock acquired by such holder in the redemption (and in certain circumstances, other shares of Series A TCI Group Common Stock) shall be adjusted, such that any net proceeds in excess of the redemption price shall be paid by the holder to the Company and any deficit between the net proceeds and the redemption price shall be paid by the Company to the holder. The Series C-TCI Group Preferred Stock ranks senior to the Common Stock and the Class B Preferred Stock and on a parity with all other currently outstanding classes and series of Preferred Stock as to rights to receive assets upon liquidation, dissolution or winding up of the affairs of the Company. As of March 31, 1998, subject to anti-dilution adjustments, each share of Series C-TCI Group Preferred Stock is currently convertible, at the option of the holder, into 132.86 shares of Series A TCI Group Common Stock. Subject to the provisions described in the immediately following paragraph, if the holders of Series C-TCI Group Preferred Stock would be entitled to receive upon conversion thereof any of the Company's capital stock that is redeemable or exchangeable at the election of the Company ("Series C-TCI Group Redeemable Capital Stock"), and all of the outstanding shares or other units of such Series C-TCI Group Redeemable Capital Stock are redeemed, exchanged or otherwise acquired in full, then, from and after such event (a "Series C-TCI Group Redemption Event"), the holders of Series C-TCI Group Preferred Stock then outstanding shall be entitled to receive upon conversion of such shares, in lieu of shares of such Series C-TCI Group Redeemable Capital Stock, the kind and amount of shares of stock and other securities and property receivable upon such Series C-TCI Group Redemption Event by a holder of the number of shares or units of Series C-TCI Group Redeemable Capital Stock into which such shares of Series C-TCI Group Preferred Stock could have been converted immediately prior to the effectiveness of such Series C-TCI Group Redemption Event (assuming that such holder 60 failed to exercise any applicable right of election with respect thereto and received per share or unit of such Series C-TCI Group Redeemable Capital Stock the kind and amount of stock and other securities and property received per share or unit by the holders of a plurality of the non-electing shares or units thereof) and, thereafter, the holders of the Series C-TCI Group Preferred Stock shall have no other conversion rights with respect to such Series C-TCI Group Redeemable Capital Stock. Notwithstanding the foregoing, the provisions described in the immediately preceding paragraph shall not apply, and the holders of Series C-TCI Group Preferred Stock that are not exchanged as described in the third sentence of this paragraph shall not have conversion rights with respect to Series C-TCI Group Redeemable Capital Stock so redeemed, exchanged or otherwise acquired after the Series C-TCI Group Redemption Event relating thereto, if (i) the redemption price for the shares of such Series C-TCI Group Redeemable Capital Stock is paid in whole or in part in stock ("Series C-TCI Group Redemption Securities") of a subsidiary of the Company and (ii) in connection with such Series C-TCI Group Redemption Event, the "Mirror Preferred Stock Condition" is met, as such term is defined in the certificate of designations for the Series C-TCI Group Preferred Stock. The Company is obligated to use all commercially reasonable efforts to ensure that the Mirror Preferred Stock Condition is satisfied. Generally, the Mirror Preferred Stock Condition will be satisfied if the Company makes appropriate provisions so that holders of Series C-TCI Group Preferred Stock shall have the right, exercisable on the effective date of the Series C-TCI Group Redemption Event, to exchange their shares of Series C-TCI Group Preferred Stock for convertible preferred stock of the Company and convertible preferred stock of the issuer of the Series C-TCI Group Redemption Securities that together have an aggregate liquidation preference equal to the aggregate liquidation preference of the Series C-TCI Group Preferred Stock to be so exchanged (as in effect on the effective date of the Series C-TCI Group Redemption Event) and that otherwise each have terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-TCI Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-TCI Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that (x) the convertible preferred stock of the issuer of the Series C-TCI Group Redemption Securities will be convertible into the kind and amount of Series C-TCI Group Redemption Securities, cash and other assets that the holder of a share of Series C-TCI Group Preferred Stock in respect of which such convertible preferred stock is issued would have received in the Series C-TCI Group Redemption Event, had such shares of Series C-TCI Group Preferred Stock been converted prior to the Series C-TCI Group Redemption Event, and (y) the convertible preferred stock of the Company will not be convertible into, and the holders thereof will have no conversion rights thereunder with respect to, the Series C-TCI Group Redeemable Capital Stock redeemed, or the Series C-TCI Group Redemption Securities issued, in the Series C-TCI Group Redemption Event. If the Company distributes the stock of a subsidiary of the Company as a dividend to all holders of Series A TCI Group Common Stock (a "TCI Group Spin Off"), the Company shall make appropriate provision so the holders of the Series C-TCI Group Preferred Stock have the right to exchange their shares of Series C-TCI Group Preferred Stock on the effective date of the TCI Group Spin Off for convertible preferred stock of the Company and convertible preferred stock of such subsidiary that together have an aggregate liquidation preference equal to the liquidation preference of a share of Series C-TCI Group Preferred Stock on the effective date of the TCI Group Spin Off and that otherwise each have terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-TCI Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-TCI Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that (x) the convertible preferred stock of the subsidiary whose stock is distributed in such TCI Group Spin Off will be convertible into the kind and amount of stock of such subsidiary, and other securities and property that the holder of a share of Series C-TCI Group Preferred Stock in respect of which such convertible 61 preferred stock is issued would have received in the TCI Group Spin Off, had such shares of Series C-TCI Group Preferred Stock been converted prior to the record date for such TCI Group Spin Off, and (y) the convertible preferred stock of the Company will not be convertible into, and the holders thereof will have no conversion rights thereunder with respect to, the stock of such subsidiary. From and after the effective date of the TCI Group Spin Off, holders of any shares of Series C-TCI Group Preferred Stock that have not been exchanged for convertible preferred stock of the Company and convertible preferred stock of such subsidiary shall have no conversion rights with respect to the stock of the subsidiary distributed in the TCI Group Spin Off. In the event an Exchange Offer is made by the Company or a subsidiary of the Company (the applicable of the foregoing being the "Series C-TCI Group Offeror"), the Series C-TCI Group Offeror shall concurrently therewith make an equivalent offer to the holders of Series C-TCI Group Preferred Stock pursuant to which such holders may tender shares of Series C-TCI Group Preferred Stock, based upon the number of shares of Series A TCI Group Common Stock into which such tendered shares are then convertible (and in lieu of tendering outstanding shares of Series A TCI Group Common Stock), together with such other consideration as may be required to be tendered pursuant to such Exchange Offer, and receive in exchange therefor, in lieu of securities of the Series C-TCI Group Offeror offered in such Exchange Offer ("Exchange Securities") (and other property, if applicable), convertible preferred stock of the issuer of the Exchange Securities with an aggregate liquidation preference equal to the aggregate liquidation preference of the shares of Series C-TCI Group Preferred Stock exchanged therefor and that otherwise has terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-TCI Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-TCI Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that such convertible preferred stock will be convertible into the kind and amount of Exchange Securities aand other property that the holder of a share of Series C-TCI Group Preferred Stock in respect of which such convertible preferred stock is issued would have received upon the consummation of the Exchange Offer, had such shares of Series C-TCI Group Preferred Stock that such holder elects to tender been converted and the shares of Series A TCI Group Common Stock received upon such conversion been tendered in full pursuant to such Exchange Offer and the same percentage of such tendered shares had been accepted for exchange as the percentage of validly tendered shares of Series A TCI Group Common Stock were accepted for exchange pursuant to such Exchange Offer. Whether or not a holder of shares of Series C-TCI Group Preferred Stock elects to accept such offer and tender such shares, no adjustment to the conversion rate will be made in connection with the Exchange Offer. For the purposes of the foregoing, "Exchange Offer" means an issuer tender offer (within the meaning of Rule 13e- 4(a)(2) under the Exchange Act), including, without limitation, one that is effected through the distribution of rights or warrants, made to holders of Series A TCI Group Common Stock (or to holders of other stock of the Company receivable by a holder of Series C-TCI Group Preferred Stock upon conversion thereof), to issue stock of the Company or of a subsidiary of the Company and/or other property to a tendering stockholder in exchange for shares of Series A TCI Group Common Stock (or such other stock). The holders of Series C-TCI Group Preferred Stock are entitled to vote on an as converted basis on all matters submitted to a vote of holders of the capital stock of the Company entitled to vote generally on the election of directors. Holders of Series C-TCI Group Preferred Stock are not entitled to vote as a separate class except as otherwise may be required by the DGCL. Series C-Liberty Media Group Preferred Stock The liquidation value of the Series C-Liberty Media Group Preferred Stock is $579.31 per share. The liquidation and redemption features of the Series C- Liberty Media Group Preferred Stock, each of which is discussed in greater detail below, are determined by reference to such liquidation value. No dividends are required to be paid on the Series C-Liberty Media Group Preferred Stock. 62 Upon the liquidation, dissolution or winding up of the Company, holders of the Series C-Liberty Media Group Preferred Stock will be entitled to receive from the assets of the Company available for distribution to stockholders an amount in cash, per share, equal to the liquidation value of the Series C- Liberty Media Group Preferred Stock. The Series C-Liberty Media Group Preferred Stock shall not rank junior to any other classes or series of stock of the Company in respect of the right to participate in any distribution upon liquidation, dissolution or winding up of the Company. The Series C-Liberty Media Group Preferred Stock is subject to optional redemption by the Company at any time after August 8, 2001, in whole or in part, at a redemption price, per share, equal to the liquidation value per share of the Series C-Liberty Media Group Preferred Stock. The Series C- Liberty Media Group Preferred Stock is required to be redeemed by the Company at any time on or after August 8, 2001 at the option of the holder, in whole or in part (provided that the aggregate liquidation value of the shares to be redeemed is in excess of $1 million), in each case at a redemption price, per share, equal to the liquidation value. In the case of a redemption of shares of Series C-Liberty Media Group Preferred Stock at the option of the holder, the Company may elect to pay the redemption price in cash or through the issuance of shares of Series A Liberty Media Group Common Stock. In the event that the Company elects to issue shares of Series A Liberty Media Group Common Stock in payment of the redemption price and, as of the redemption date, Bill Daniels, the original holder of all outstanding shares of Series C-Liberty Media Group Preferred Stock, is deceased and the shares required to be redeemed are held by or for the benefit of a trust, regardless of whether such trust became effective during Mr. Daniel's lifetime or is a testamentary trust, or a public or private foundation established by Mr. Daniels, the net proceeds from any open-market sale (within a period of time set forth in the certificate of designations for the Series C-Liberty Media Group Preferred Stock) of the shares of Series A Liberty Media Group Common Stock acquired by such holder in the redemption (and in certain circumstances, other shares of Series A Liberty Media Group Common Stock) shall be adjusted, such that any net proceeds in excess of the redemption price shall be paid by the holder to the Company and any deficit between the net proceeds and the redemption price shall be paid by the Company to the holder. The Series C-Liberty Media Group Preferred Stock ranks senior to the Common Stock and the Class B Preferred Stock and on a parity with all other currently outstanding classes and series of Preferred Stock as to rights to receive assets upon liquidation, dissolution or winding up of the affairs of the Company. As of March 31, 1998, subject to anti-dilution adjustments, each share of Series C-Liberty Media Group Preferred Stock is currently convertible, at the option of the holder, into (i) 37.5 shares of Series A Liberty Media Group Common Stock and (ii) upon conversion of shares of Series C-Liberty Media Group Preferred Stock each holder of Series C-Liberty Media Group Preferred Stock is entitled to receive one additional share of Series A Liberty Media Group Common Stock for every two such shares issued upon such conversion. Subject to the provisions described in the immediately following paragraph, if (i) the Company redeems all the outstanding shares of Series A Liberty Media Group Common Stock in accordance with the terms thereof, or (ii) the holders of Series C-Liberty Media Group Preferred Stock would be entitled to receive upon conversion thereof any the Company capital stock that is redeemable or exchangeable at the election of the Company ("Series C-Liberty Media Group Redeemable Capital Stock"), and all of the outstanding shares or other units of such Series C-Liberty Media Group Redeemable Capital Stock are redeemed, exchanged or otherwise acquired in full, then, from and after either such event (each event referred to in clause (i) and (ii) being a "Series C-Liberty Media Group Redemption Event"), the holders of Series C-Liberty Media Group Preferred Stock then outstanding shall be entitled to receive upon conversion of such shares of Series C-Liberty Media Group Preferred Stock, in lieu of shares of Series A Liberty Media Group Common Stock or such Series C-Liberty Media Group Redeemable Capital Stock, as the case may be, the kind and amount of shares of stock and other securities and property receivable upon such Series C-Liberty Media Group Redemption Event by a holder of the number of shares of Series A Liberty Media Group Common Stock or shares or units of such Series C-Liberty Media Group Redeemable Capital Stock, as the case may be, into which such shares of Series C-Liberty Media Group Preferred Stock could have been converted immediately prior to the effectiveness of such Series C- Liberty 63 Media Group Redemption Event (assuming that such holder failed to exercise any applicable right of election with respect thereto and received per share of Series A Liberty Media Group Common Stock or per share or unit of such Series C-Liberty Media Group Redeemable Capital Stock, as the case may be, the kind and amount of stock and other securities and property received per share or unit by the holders of a plurality of the non-electing shares or units thereof) and, thereafter, the holders of the Series C-Liberty Media Group Preferred Stock shall have no other conversion rights with respect to the Series A Liberty Media Group Common Stock or such Series C-Liberty Media Group Redeemable Capital Stock, as the case may be. Notwithstanding the foregoing, the provisions described in the immediately preceding paragraph shall not apply, and the holders of Series C-Liberty Media Group Preferred Stock that are not exchanged as described in the third sentence of this paragraph shall not have conversion rights with respect to Series A Liberty Media Group Common Stock or Series C-Liberty Media Group Redeemable Capital Stock so redeemed, exchanged or otherwise acquired, after the Series C-Liberty Media Group Redemption Event relating thereto, if (i) the redemption price for the shares of Series A Liberty Media Group Common Stock or such Series C-Liberty Media Group Redeemable Capital Stock, as the case may be, is paid in whole or in part in securities ("Series C-Liberty Media Group Redemption Securities") of a subsidiary of the Company and (ii) in connection with such Series C-Liberty Media Group Redemption Event, the "Mirror Preferred Stock Condition" is met, as such term is defined in the certificate of designations for the Series C-Liberty Media Group Preferred Stock. The Company is obligated to use all commercially reasonable efforts to ensure that the Mirror Preferred Stock Condition is satisfied. Generally, the Mirror Preferred Stock Condition will be satisfied in connection with a redemption of the Series A Liberty Media Group Common Stock or the Series C-Liberty Media Group Redeemable Capital Stock into which the Series C-Liberty Media Group Preferred Stock is then convertible, assuming that the Series C-Liberty Media Group Preferred Stock is not then convertible into any other shares of stock or other securities or property, if appropriate provision is made so that the holders of the Series C-Liberty Media Group Preferred Stock have the right to exchange their shares of Series C-Liberty Media Group Preferred Stock on the effective date of the Series C-Liberty Media Group Redemption Event for shares of convertible preferred stock of the issuer of the Series C-Liberty Media Group Redemption Securities, which convertible preferred stock shall have an aggregate liquidation preference equal to the aggregate liquidation preference of the shares of Series C-Liberty Media Group Preferred Stock to be exchanged therefor and that otherwise has terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-Liberty Media Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-Liberty Media Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that the convertible preferred stock of the issuer of the Series C-Liberty Media Group Redemption Securities will be convertible into the kind and amount of Series C-Liberty Media Group Redemption Securities, cash and other assets that the holder of a share of Series C-Liberty Media Group Preferred Stock in respect of which such convertible preferred stock is issued would have received in the Series C- Liberty Media Group Redemption Event, had such shares of Series C-Liberty Media Group Preferred Stock been converted prior to the Series C-Liberty Media Group Redemption Event. If, before giving effect to a Series C-Liberty Media Group Redemption Event, a holder of Series C-Liberty Media Group Preferred Stock would be entitled to receive upon conversion of such Series C-Liberty Media Group Preferred Stock any shares of stock or other securities or property (other than cash in lieu of fractional securities) in addition to the Series A Liberty Media Group Common Stock or Series C-Liberty Media Group Redeemable Capital Stock being redeemed, and the redemption price payable upon such Series C-Liberty Media Group Redemption Event will include Series C-Liberty Media Group Redemption Securities, then the Mirror Preferred Stock Condition will be satisfied if appropriate provision is made so that the holders of the Series C-Liberty Media Group Preferred Stock have the right to exchange their shares of Series C-Liberty Media Group Preferred Stock on the effective date of the Series C- Liberty Media Group Redemption Event for convertible preferred stock of the Company and convertible preferred stock of the issuer of the Series C-Liberty Media 64 Group Redemption Securities. The sum of the initial liquidation preferences of the shares of convertible preferred stock of the Company and convertible preferred stock of the issuer of the Series C-Liberty Media Group Redemption Securities delivered in exchange for a share of Series C-Liberty Media Group Preferred Stock will equal the liquidation preference of a share of Series C- Liberty Media Group Preferred Stock on the effective date of the Series C- Liberty Media Group Redemption Event and that otherwise each have terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-Liberty Media Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-Liberty Media Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that (x) the convertible preferred stock of the issuer of the Series C-Liberty Media Group Redemption Securities will be convertible into the kind and amount of Series C-Liberty Media Group Redemption Securities, cash and other assets that the holder of a share of Series C-Liberty Media Group Preferred Stock in respect of which such convertible preferred stock is issued would have received in the Series C- Liberty Media Group Redemption Event, had such shares of Series C-Liberty Media Group Preferred Stock been converted prior to the Series C-Liberty Media Group Redemption Event, and (y) the convertible preferred stock of the Company will not be convertible into, and the holders thereof will have no conversion rights thereunder with respect to the Series C-Liberty Media Group Redeemable Capital Stock redeemed, or the Series C-Liberty Media Group Redemption Securities issued, in the Series C-Liberty Media Group Redemption Event. If the Company distributes the stock of a subsidiary of the Company as a dividend to all holders of Series A Liberty Media Group Common Stock (a "Liberty Media Group Spin Off"), the Company shall make appropriate provision so the holders of the Series C-Liberty Media Group Preferred Stock have the right to exchange their shares of Series C-Liberty Media Group Preferred Stock on the effective date of the Liberty Media Group Spin Off for convertible preferred stock of the Company and convertible preferred stock of such subsidiary that together have an aggregate liquidation preference equal to the liquidation preference of a share of Series C-Liberty Media Group Preferred Stock on the effective date of the Liberty Media Group Spin Off and that otherwise each have terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-Liberty Media Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-Liberty Media Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that (x) the convertible preferred stock of the subsidiary whose stock is distributed in such Liberty Media Group Spin Off will be convertible into the kind and amount of stock of such subsidiary, and other securities and property that the holder of a share of Series C-Liberty Media Group Preferred Stock in respect of which such convertible preferred stock is issued would have received in the Liberty Media Group Spin Off, had such shares of Series C-Liberty Media Group Preferred Stock been converted prior to the record date for such Liberty Media Group Spin Off, and (y) the convertible preferred stock of the Company will not be convertible into, and the holders thereof will have no conversion rights thereunder with respect to the stock of such subsidiary. From and after the effective date of the Liberty Media Group Spin Off, holders of any shares of Series C-Liberty Media Group Preferred Stock that have not been exchanged for convertible preferred stock of the Company and convertible preferred stock of such subsidiary shall have no conversion rights with respect to the stock of the subsidiary distributed in the Liberty Media Group Spin Off. In the event an "Exchange Offer" is made by the Company or a subsidiary of the Company (the applicable of the foregoing being the "Series C-Liberty Media Group Offeror"), the Series C-Liberty Media Group Offeror shall concurrently therewith make an equivalent offer to the holders of Series C-Liberty Media Group Preferred Stock pursuant to which such holders may tender shares of Series C-Liberty Media Group Preferred Stock, based upon the number of shares of Series A Liberty Media Group Common Stock into which such tendered shares are then convertible (and in lieu of tendering outstanding shares of Series A Liberty Media Group Common 65 Stock), together with such other consideration as may be required to be tendered pursuant to such Exchange Offer, and receive in exchange therefor, in lieu of securities of the Series C-Liberty Media Group Offeror offered in such Exchange Offer ("Liberty Media Group Exchange Securities") (and other property, if applicable), convertible preferred stock of the issuer of such Liberty Media Group Exchange Securities with an aggregate liquidation preference equal to the aggregate liquidation preference of the shares of Series C-Liberty Media Group Preferred Stock exchanged therefor and that otherwise has terms, conditions, designations, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the judgment of the Company's Board of Directors, to those of the Series C-Liberty Media Group Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series C-Liberty Media Group Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that such convertible preferred stock will be convertible into the kind and amount of Exchange Securities and other property that the holder of a share of Series C-Liberty Media Group Preferred Stock in respect of which such convertible preferred stock is issued would have received upon the consummation of the Exchange Offer, had such shares of Series C-Liberty Media Group Preferred Stock that such holder elects to tender been converted and the shares of Series A Liberty Media Group Common Stock received upon such conversion been tendered in full pursuant to such Exchange Offer and the same percentage of such tendered shares had been accepted for exchange as the percentage of validly tendered shares of Series A Liberty Media Group Common Stock were accepted for exchange pursuant to such Exchange Offer. Whether or not a holder of shares of Series C-Liberty Media Group Preferred Stock elects to accept such offer and tender such shares, no adjustment to the conversion rate will be made in connection with the Exchange Offer. For the purposes of the foregoing, "Exchange Offer" means an issuer tender offer (within the meaning of Rule 13e-4(a)(2) under the Exchange Act), including, without limitation, one that is effected through the distribution of rights or warrants, made to holders of Series A Liberty Media Group Common Stock (or to holders of other stock of the Company receivable by a holder of Series C- Liberty Media Group Preferred Stock upon conversion thereof), to issue stock of the Company or of a subsidiary of the Company and/or other property to a tendering stockholder in exchange for shares of Series A Liberty Media Group Common Stock (or such other stock). The holders of Series C-Liberty Media Group Preferred Stock are entitled to vote on an as converted basis on all matters submitted to a vote of holders of the capital stock of the Company entitled to vote generally on the election of directors. Holders of Series C-Liberty Media Group Preferred Stock are not entitled to vote as a separate class except as otherwise may be required by the DGCL. Series D Preferred Stock The Company will not issue any additional shares of Series D Preferred Stock and will remove any remaining shares of Series Preferred Stock designated as Series D Preferred Stock from such designation as soon as practicable. Series F Preferred Stock The holders of the Series F Preferred Stock are entitled to participate, on an as-converted basis, with the holders of the Series A TCI Group Common Stock, with respect to any cash dividends or distributions declared and paid on the Series A TCI Group Common Stock. Dividends or distributions on the Series A TCI Group Common Stock which are not paid in cash would result in adjustment of the rate at which the Series F Preferred Stock is convertible into Series A TCI Group Common Stock. Upon the liquidation, dissolution or winding up of the Company, holders of Series F Preferred Stock will be entitled to receive from the assets of the Company available for distribution to stockholders an amount in cash or property or a combination thereof, per share, equal to $.01. After receipt of their liquidation preference and subject to the preferential rights of any other class or series of Preferred Stock, the holders of Series F 66 Preferred Stock are entitled to receive from the assets of the Company available for distribution to common stockholders an amount equal to the amount to be distributed per share of Series A TCI Group Common Stock in such liquidation, dissolution or winding up multiplied by the number of shares of Series A TCI Group Common Stock into which a share of Series F Preferred Stock is then convertible. The Series F Preferred Stock is subject to optional redemption by the Company at any time after the 30th business day following issuance, in whole or in part, at a redemption price, per share, equal to $24,875 (as adjusted in respect of stock splits, reverse splits and other events affecting the shares of Series F Preferred Stock), plus any dividends which have been declared but are unpaid as of the date fixed for such redemption. The Company will pay the redemption price (or designated portion thereof) of the shares of Series F Preferred Stock called for redemption by issuing to the holder thereof, in respect of its shares to be redeemed a number of shares of Series A TCI Group Common Stock equal to the aggregate redemption price (or designated portion thereof) of the shares to be redeemed divided by the average market price of the Series A TCI Group Common Stock for a period specified, and subject to the adjustments described, in the certificate of designations establishing the Series F Preferred Stock. The Series F Preferred Stock ranks senior to the Common Stock and the Class B Preferred Stock, and ranks on a parity basis with all other currently outstanding classes and series of Preferred Stock as to dividend rights, rights to redemption and rights on liquidation. Shares of Series F Preferred Stock are currently convertible, at the option of the holder, into Series A TCI Group Common Stock at a rate of 1,496.65 shares of Series A TCI Group Common Stock for each share of Series F Preferred Stock, subject to anti-dilution adjustments. In addition, any shares of Series F Preferred Stock which cease to be held by the Company or a subsidiary of the Company will automatically be converted into shares of Series A TCI Group Common Stock. The holders of Series F Preferred Stock have the right to vote, on the basis of one vote per share, together with the Common Stock and any class or series of Preferred Stock entitled to vote thereon, in any general election of directors of the Company. Except as provided above or required by the DGCL, the Series F Preferred Stock has no voting rights. Series G Preferred Stock The dividend, liquidation and redemption features of the Series G Preferred Stock, each of which is discussed below, are determined by reference to the liquidation preference of the Series G Preferred Stock, which as of any date of determination is equal, on a per share basis, to the sum of (i) $21.60, plus (ii) an amount equal to all dividends accrued on such share which have been added to and remain a part of the liquidation preference as of such date, plus (iii) for purposes of determining liquidation and redemption payments, an amount equal to all unpaid dividends accrued on the sum of the amounts specified in clauses (i) and (ii) above during the period from the immediately preceding dividend payment date through and including the date in question. The holders of Series G Preferred Stock are entitled to receive cumulative dividends, when and as declared by the Company's Board of Directors out of unrestricted funds legally available therefor, in preference to dividends on the Common Stock and the Class B Preferred Stock. Dividends accrue on the Series G Preferred Stock from and after January 25, 1997, on a daily basis at the rate of 4% per annum of the liquidation preference per share, whether or not such dividends are declared or funds are available for payment of dividends. Dividends not paid on any dividend payment date are added to the liquidation preference on such date and remain a part thereof until such dividends are paid. The rate per annum at which dividends will accrue on that portion of the liquidation preference that consists of unpaid dividends that were added to the liquidation preference on a dividend payment date and that remain unpaid on the next succeeding dividend payment date will increase to 8.625% per annum from and after such next succeeding dividend payment date. Accrued dividends are payable semiannually and, in the sole discretion of the Company's Board of Directors, may be declared and paid in cash, in shares of Series A TCI Group Common Stock or in any combination of the foregoing. Accrued dividends not 67 paid as provided above on any dividend payment date accumulate and such accumulated unpaid dividends may be declared and paid in cash, shares of Series A TCI Group Common Stock or any combination thereof at any time without reference to any regular dividend payment, to holders of record of Series G Preferred Stock as of a special record date fixed by the Company's Board of Directors. Upon the liquidation, dissolution or winding up of the Company, the holders of Series G Preferred Stock will be entitled, after payment of preferential amounts on any class or series of Preferred Stock ranking prior to the Series G Preferred Stock with respect to liquidating distributions, to receive from the assets of the Company available for distribution to stockholders an amount in cash or property or a combination thereof, per share, equal to the liquidation preference thereof as of the date of payment or distribution. The Series G Preferred Stock is redeemable at the option of the Company, in whole at any time or in part from time to time on or after February 1, 2001 for a redemption price per share payable in cash equal to the liquidation preference thereof on such redemption date. The Company is required to redeem the Series G Preferred Stock out of funds legally available therefor on February 1, 2016, for a redemption price per share payable in cash equal to the liquidation preference thereof on such redemption date. The Series G Preferred Stock ranks senior to the Common Stock and the Class B Preferred Stock and on a parity with all other currently outstanding classes and series of Preferred Stock as to dividend rights, rights to redemption and rights on liquidation. As of March 31, 1998, subject to anti-dilution adjustments, each share of Series G Preferred Stock is convertible, at the option of the holder, into 1.190 shares of Series A TCI Group Common Stock. Subject to the provisions described in the immediately following paragraph, if the holders of Series G Preferred Stock would be entitled to receive upon conversion thereof any shares of a class or series of the Company's capital stock, which is redeemable or exchangeable at the election of the Company ("Series G Redeemable Capital Stock"), and such Series G Redeemable Capital Stock is redeemed, exchanged or otherwise acquired in full, then, from and after such event (a "Series G Redemption Event"), the holders of Series G Preferred Stock then outstanding shall be entitled to receive upon conversion of such shares, in lieu of shares of such Series G Redeemable Capital Stock, the kind and amount of securities, cash or other assets receivable upon such Series G Redemption Event by a holder of the number of shares of Series G Redeemable Capital Stock into which such shares of Series G Preferred Stock could have been converted immediately prior to the effectiveness of such Series G Redemption Event (assuming that such holder failed to exercise any applicable right of election with respect thereto and received per share of such Series G Redeemable Capital Stock the kind and amount of securities, cash or other assets received per share by the holders of a plurality of the non-electing shares thereof) and, thereafter, the holders of the Series G Preferred Stock shall have no other conversion rights with respect to such Series G Redeemable Capital Stock. Notwithstanding the foregoing, the provisions described in the immediately preceding paragraph shall not apply, and the holders of any shares of Series G Preferred Stock that are not exchanged as described in the second sentence of this paragraph shall not have any conversion rights with respect to Series G Redeemable Capital Stock so redeemed, exchanged or otherwise acquired, after the Series G Redemption Event relating thereto, if (i) the redemption price for the shares of such Series G Redeemable Capital Stock is paid in whole or in part in securities ("Series G Redemption Securities") of an issuer other than the Company (the "Series G Other Issuer") and (ii) in connection with such Series G Redemption Event, the "Mirror Preferred Stock Condition" is met, as such term is defined in the certificate of designations for the Series G Preferred Stock. Generally, the Mirror Preferred Stock Condition shall be satisfied if the Company makes appropriate provisions so that holders of Series G Preferred Stock shall have the right, exercisable on the effective date of the Series G Redemption Event, to exchange their shares of Series G Preferred Stock for convertible preferred stock of the Company and convertible preferred stock of the Series G Other Issuer that together have an aggregate liquidation preference equal to the liquidation preference of the Series G Preferred Stock to be so exchanged (as in effect on the effective date of the Series G Redemption Event) and that otherwise each have terms, conditions, designations, dividend rights, voting powers, rights on liquidation and other preferences and relative, participating, optional or 68 other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the good faith judgment of the Company's Board of Directors, to those of the Series G Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series G Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that (x) the convertible preferred stock of the Series G Other Issuer will be convertible into the kind and amount of Series G Redemption Securities, cash and other assets that the holder of a share of Series G Preferred Stock in respect of which such convertible preferred stock is issued would have received in the Series G Redemption Event, had such shares of Series G Preferred Stock been converted prior to the Series G Redemption Event, and (y) the convertible preferred stock of the Company will not be convertible into, and the holders thereof will have no conversion rights thereunder with respect to, the Series G Redeemable Capital Stock subject to the Series G Redemption Event. The Mirror Preferred Stock Condition shall be deemed to have been satisfied in connection with any Series G Redemption Event only if the Company's Board of Directors determines (i) that receipt of such convertible preferred stock of the Company and/or the Series G Other Issuer in exchange for the Series G Preferred Stock in connection with such Series G Redemption Event would not result in the recognition of gain or loss by the holders of such Series G Preferred Stock for United States federal income tax purposes; (ii) that an adjustment made in the conversion rate of the Series G Preferred Stock with respect to such Series G Redemption Event, as described in the immediately preceding paragraph, would result in the recognition of gain or loss by the holders of Series G Preferred Stock for United States federal income tax purposes; or (iii) that receipt of Series G Redemption Securities in redemption of the Series G Redeemable Capital Stock to be redeemed in such Series G Redemption Event would result in the recognition of gain or loss by the holders of such Series G Redeemable Capital Stock. The holders of Series G Preferred Stock have the right to vote, on the basis of one vote per share, together with the Common Stock, the Class B Preferred Stock and any other class or series of Preferred Stock entitled to vote thereon, in any general election of directors of the Company. The number of authorized shares of Series G Preferred Stock may be increased or decreased (but not below the number of shares of Series G Preferred Stock then outstanding) by the affirmative vote of the holders of at least 66 2/3% of the then outstanding Voting Securities (as defined in the Charter) voting together as a single class. Except as provided above or required by the DGCL, the Series G Preferred Stock has no voting rights. Series H Preferred Stock The dividend, liquidation and redemption features of the Series H Preferred Stock, each of which is discussed below, are determined by reference to the liquidation preference of the Series H Preferred Stock, which as of any date of determination is equal, on a per share basis, to the sum of (i) $5.40, plus (ii) an amount equal to all dividends accrued on such share which have been added to and remain a part of the liquidation preference as of such date, plus (iii) for purposes of determining liquidation and redemption payments, an amount equal to all unpaid dividends accrued on the sum of the amounts specified in clauses (i) and (ii) above during the period from the immediately preceding dividend payment date through and including the date in question. The holders of Series H Preferred Stock are entitled to receive cumulative dividends, when and as declared by the Company's Board of Directors out of unrestricted funds legally available therefor, in preference to dividends on the Common Stock and the Class B Preferred Stock. Dividends accrue on the Series H Preferred Stock from and after January 25, 1997, on a daily basis at the rate of 4% per annum of the liquidation preference per share, whether or not such dividends are declared or funds are available for payment of dividends. Dividends not paid on any dividend payment date are added to the liquidation preference on such date and remain a part thereof until such dividends are paid. The rate per annum at which dividends will accrue on that portion of the liquidation preference that consists of unpaid dividends that were added to the liquidation preference on a dividend payment date and that remain unpaid on the next succeeding dividend payment date will increase to 8.625% per annum from and after such next succeeding dividend payment date. Accrued dividends are payable semiannually and, in the sole discretion of the Company's Board of Directors, may be declared and paid in cash, in shares of Series A TCI Group Common Stock or in any combination of the foregoing. Accrued dividends not 69 paid as provided above on any dividend payment date accumulate and such accumulated unpaid dividends may be declared and paid in cash, shares of Series A TCI Group Common Stock or any combination thereof at any time without reference to any regular dividend payment, to holders of record of Series H Preferred Stock as of a special record date fixed by the Company's Board of Directors. Upon the liquidation, dissolution or winding up of the Company, the holders of Series H Preferred Stock will be entitled, after payment of preferential amounts on any class or series of Preferred Stock ranking prior to the Series H Preferred Stock with respect to liquidating distributions, to receive from the assets of the Company available for distribution to stockholders an amount in cash or property or a combination thereof, per share, equal to the liquidation preference thereof as of the date of payment or distribution. The Series H Preferred Stock is redeemable at the option of the Company, in whole at any time or in part from time to time on or after February 1, 2001, for a redemption price per share payable in cash equal to the liquidation preference thereof on such redemption date. The Company is required to redeem the Series H Preferred Stock out of funds legally available therefor on February 1, 2016, for a redemption price per share payable in cash equal to the liquidation preference thereof on such redemption date. The Series H Preferred Stock ranks senior to the Common Stock and the Class B Preferred Stock and on a parity with all other currently outstanding classes and series of Preferred Stock as to dividend rights, rights to redemption and rights on liquidation. As of March 31, 1998, subject to antidilution adjustments, each share of Series H Preferred Stock is convertible, at the option of the holder, into (i) .2625 of one share of Series A Liberty Media Group Common Stock, and (ii) upon conversion of shares of the Series H Preferred Stock each holder of Series H Preferred Stock is entitled to receive one additional share of Series A Liberty Media Group Common Stock for every two such shares received upon such conversion, and (iii) upon such conversion each such holder is entitled to receive one additional share of Series A Liberty Media Group Common Stock for every two shares of such stock held after calculating the number of such shares issuable upon conversion of the Series H Preferred Stock as described in clauses (i) and (ii) above. Subject to the provisions described in the immediately following paragraph, if (i) the Company redeems all the outstanding shares of Series A Liberty Media Group Common Stock in accordance with the terms thereof, or (ii) the holders of Series H Preferred Stock would be entitled to receive upon conversion thereof any shares of a class or series of the Company's capital stock, which is redeemable or exchangeable at the election of the Company ("Series H Redeemable Capital Stock"), and such Series H Redeemable Capital Stock is redeemed, exchanged or otherwise acquired in full, then, from and after either such event (a "Series H Redemption Event"), the holders of Series H Preferred Stock then outstanding shall be entitled to receive upon conversion of such shares of Series H Preferred Stock, in lieu of shares of Series A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as the case may be, the kind and amount of securities, cash or other assets receivable upon such Series H Redemption Event by a holder of the number of shares of Series A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as the case may be, into which such shares of Series H Preferred Stock could have been converted immediately prior to the effectiveness of such Series H Redemption Event (assuming that such holder failed to exercise any applicable right of election with respect thereto and received per share of Series A Liberty Media Group Common Stock or per share of such Series H Redeemable Capital Stock, as the case may be, the kind and amount of securities, cash or other assets received per share by the holders of a plurality of the non-electing shares thereof) and, thereafter, the holders of the Series H Preferred Stock shall have no other conversion rights with respect to the Series A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as the case may be. Notwithstanding the foregoing, the provisions described in the immediately preceding paragraph shall not apply, and the holders of any shares of Series H Preferred Stock that are not exchanged as described in the second sentence of this paragraph shall not have any conversion rights with respect to the Series A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as the case may be, after the Series H Redemption 70 Event relating thereto, if (i) the redemption price for the shares of Series A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as the case may be, is paid in whole or in part in securities ("Series H Redemption Securities") of an issuer other than the Company (the "Series H Other Issuer") and (ii) in connection with such Series H Redemption Event, the "Mirror Preferred Stock Condition" is met, as such term is defined in the certificate of designations for the Series H Preferred Stock. Generally, the Mirror Preferred Stock Condition shall be satisfied if the Company makes appropriate provisions so that holders of Series H Preferred Stock shall have the right, exercisable on the effective date of the Series H Redemption Event, to exchange their shares of Series H Preferred Stock for (A) if the Series H Preferred Stock is not then convertible into any security, cash or assets other than the stock that is the subject of the Series H Redemption Event (i.e., Series A Liberty Media Group Common Stock or such Series H Redeemable Capital Stock, as the case may be), convertible preferred stock of the Series H Other Issuer having a liquidation preference equal to the liquidation preference of the Series H Preferred Stock to be so exchanged, as in effect on the effective date of the Series H Redemption Event, or (B) if the Series H Preferred Stock is then convertible into any security, cash or assets in addition to the stock that is the subject of the Series H Redemption Event (any such additional securities, cash or assets, collectively, the "Additional Conversion Property"), convertible preferred stock of the Company and convertible preferred stock of the Series H Other Issuer having an aggregate liquidation preference equal to the liquidation preference of the Series H Preferred Stock to be so exchanged, as in effect on the effective date of the Series H Redemption Event; provided, however, that in either case, the convertible preferred stock into which shares of Series H Preferred Stock may be exchanged shall otherwise have terms, conditions, designations, dividend rights, voting powers, rights on liquidation and other preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions applicable to such convertible preferred stock that are identical, or as nearly so as is practicable in the good faith judgment of the Company's Board of Directors, to those of the Series H Preferred Stock for which such convertible preferred stock is to be exchanged, except that applicable time periods under the Series H Preferred Stock will be tacked to corresponding time periods under such convertible preferred stock, and except that (x) the convertible preferred stock of the Series H Other Issuer will be convertible into the kind and amount of Series H Redemption Securities, cash and other assets that the holders of shares of Series H Preferred Stock in respect of which such convertible preferred stock is issued would have received in the Series H Redemption Event had such shares of Series H Preferred Stock been converted in full prior to the Series H Redemption Event, and (y) any convertible preferred stock of the Company will be convertible into the Additional Conversion Property, and will not be convertible into, and the holders thereof will have no conversion rights thereunder with respect to the Series A Liberty Media Group Common Stock or Series H Redeemable Capital Stock, as the case may be, subject to the Series H Redemption Event. The Mirror Preferred Stock Condition shall be deemed to have been satisfied in connection with any Series H Redemption Event only if the Company's Board of Directors determines (i) that receipt of such convertible preferred stock of the Company and/or the Series H Other Issuer in exchange for Series H Preferred Stock in connection with such Series H Redemption Event would not result in the recognition of gain or loss by the holders of such Series H Preferred Stock for United States federal income tax purposes; (ii) that an adjustment made in the conversion rate of the Series H Preferred Stock with respect to such Series H Redemption Event, as described in the immediately preceding paragraph, would result in the recognition of gain or loss by the holders of Series H Preferred Stock for United States federal income tax purposes, or (iii) that receipt of Series H Redemption Securities in redemption of the Series A Liberty Media Group Common Stock or Series H Redeemable Capital Stock to be redeemed in such Series H Redemption Event would result in the recognition of gain or loss by the holders of such Series A Liberty Media Group Common Stock or Series H Redeemable Capital Stock, as the case may be. The holders of Series H Preferred Stock have the right to vote, on the basis of one vote per share, together with the Common Stock, the Class B Preferred Stock and any other class or series of Preferred Stock entitled to vote thereon, in any general election of directors of the Company. The number of authorized shares of Series H Preferred Stock may be increased or decreased (but not below the number of shares of Series H Preferred Stock then outstanding) by the affirmative vote of the holders of at least 66 2/3% of the then outstanding Voting Securities (as defined in the Charter) voting together as a single class. Except as provided above or required by the DGCL, the Series H Preferred Stock has no voting rights. 71 Limitations on Rights of Holders of Parity Stock and Junior Stock For so long as any dividends are in arrears on any outstanding class or series of Preferred Stock, and until all dividends accrued up to the immediately preceding dividend payment date on such Preferred Stock and on any class or series of Preferred Stock ranking on a parity with such Preferred Stock ("Parity Stock") shall have been paid or declared and set apart so as to be available for payment in full thereof and for no other purpose, neither the Company nor any subsidiary thereof may purchase or otherwise acquire any shares of such Preferred Stock, Parity Stock or any class or series of capital stock ranking junior to such Preferred Stock ("Junior Stock"), or set aside any money or assets for any such purpose, unless all of the outstanding shares of such Preferred Stock and Parity Stock are redeemed. For so long as any dividends are in arrears on any outstanding class or series of Preferred Stock and until all dividends accrued up to the immediately preceding dividend payment date on such Preferred Stock shall have been paid or declared and set apart so as to be available for payment in full thereof and for no other purpose, the Company may not declare or pay any dividend on or make any distribution with respect to the Parity Stock or Junior Stock or set aside any money or assets for any such purpose. If the Company fails to redeem shares of Class B Preferred Stock or Series F Preferred Stock required to be redeemed on a redemption date, the Company may not redeem or exchange any Parity Stock or Junior Stock or declare or pay any dividend on or make any distribution with respect to any Junior Stock or set aside money or assets for any such purpose, and neither the Company nor any subsidiary thereof may purchase or otherwise acquire any shares of such Preferred Stock, Parity Stock or Junior Stock or set aside any money or assets for any such purpose, until all shares of such class or series of Preferred Stock are redeemed in full. If the Company fails to redeem shares of Series C- TCI Group Preferred Stock or Series C-Liberty Media Group Preferred Stock required to be redeemed on a redemption date, neither the Company nor any subsidiary thereof may purchase or otherwise acquire any shares of such series of Preferred Stock or Junior Stock or redeem, or discharge any sinking fund obligation with respect to any Junior Stock, until all shares of such series of Preferred Stock are redeemed in full. If the Company fails to redeem shares of Series G Preferred Stock or Series H Preferred Stock required to be redeemed on a redemption date, the Company may not redeem any Junior Stock or Parity Stock or declare or pay any dividend on or make any distribution with respect to any Junior Stock or Parity Stock, or set aside any money or assets for any such purpose, and neither the Company nor any subsidiary thereof may purchase or otherwise acquire any shares of such series of Preferred Stock, Parity Stock or Junior Stock, or set aside any money or assets for any such purpose, until all such shares are redeemed in full. Neither the Company nor any subsidiary thereof may redeem, exchange, purchase or otherwise acquire any shares of Parity Stock or Junior Stock, or set aside any money or assets for such purpose, if after giving effect to such purchase or acquisition the amount that would be available for distribution to the holders of Class B Preferred Stock and Series F Preferred Stock upon liquidation, dissolution or winding up of the Company, if such liquidation, dissolution or winding up were to occur on the date fixed for such purchase or acquisition of shares of Parity Stock or Junior Stock, would be less than the aggregate liquidation preference of all then outstanding shares of such class or series of Preferred Stock. The failure of the Company (i) to redeem on any date fixed for redemption any outstanding shares of Class B Preferred Stock or Series F Preferred Stock or (ii) to pay dividends on, in the case of Class B Preferred Stock, any Parity Stock, and, in the case of Series F Preferred Stock, such series of Preferred Stock, shall not prevent the Company from paying any dividends on Parity Stock solely in shares of Parity Stock or Junior Stock or on Junior Stock solely in exchange for shares of Junior Stock or the purchase or other acquisition of such Preferred Stock or Parity Stock solely in shares of Parity Stock or Junior Stock or of Junior Stock solely in exchange for shares of Junior Stock. The failure of the Company (i) to redeem on any date fixed for redemption any outstanding shares of Series G Preferred Stock or Series H Preferred Stock or (ii) to pay dividends on any Parity Stock, shall not prevent the Company from paying dividends on any Junior Stock solely in shares of Junior Stock, paying dividends on any Parity Stock solely in shares of Parity Stock and/or Junior Stock or the redemption, exchange, purchase or acquisition of such series of Preferred Stock or Parity Stock solely in exchange for shares of Parity Stock and/or Junior Stock. 72 CERTAIN ANTI-TAKEOVER CONSIDERATIONS The DGCL, the Charter and the Company's Bylaws contain provisions which may serve to discourage or make more difficult a change in control of the Company without the support of the Board of Directors or without meeting various other conditions. The principal provisions of the DGCL, the Charter and the Company's Bylaws are outlined below. DGCL Section 203, in general, prohibits a "business combination" between a corporation and an "interested stockholder" within three years of the date such stockholder became an "interested stockholder," unless (i) prior to such date the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, exclusive of shares owned by directors who are also officers and by certain employee stock plans or (iii) on or after such date, the business combination is approved by the board of directors and authorized by the affirmative vote at a stockholders' meeting of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. The term "business combination" is defined to include, among other transactions between the interested stockholder and the corporation or any direct or indirect majority-owned subsidiary thereof, a merger or consolidation; a sale, pledge, transfer or other disposition (including as part of a dissolution) of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation on a consolidated basis or the aggregate market value of all the outstanding stock of the corporation; certain transactions that would increase the interested stockholder's proportionate share ownership of the stock of any class or series of the corporation or such subsidiary; and any receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation or any such subsidiary. In general, and subject to certain exceptions, an "interested stockholder" is any person who is the owner of 15% or more of the outstanding voting stock (or, in the case of a corporation with classes of voting stock with disparate voting power, 15% or more of the voting power of the outstanding voting stock) of the corporation, and the affiliates and associates of such person. The term "owner" is broadly defined to include any person that individually or with or through its affiliates or associates, among other things, beneficially owns such stock, or has the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement or understanding or upon the exercise of warrants or options or otherwise or has the right to vote such stock pursuant to any agreement or understanding, or has an agreement or understanding with the beneficial owner of such stock for the purpose of acquiring, holding, voting or disposing of such stock. The restrictions of DGCL Section 203 do not apply to corporations that have elected, in the manner provided therein, not to be subject to such section or, with certain exceptions, which do not have a class of voting stock that is listed on a national securities exchange or The NASDAQ Stock Market or held of record by more than 2,000 stockholders. The Charter does not contain any provision "opting out" of the application of DGCL Section 203 and the Company has not taken any of the actions necessary for it to "opt out" of such provision. As a result, the provisions of Section 203 will remain applicable to transactions between the Company and any of its "interested stockholders." The Charter also contains certain provisions which could make a change in control of the Company more difficult. For example, the Charter requires, subject to the rights, if any, of any class or series of the Preferred Stock, the affirmative vote of 66 2/3% of the total voting power of the outstanding shares of Voting Stock (as defined herein), voting together as a single class, to approve (i) a merger or consolidation of the Company with, or into, another corporation, other than a merger or consolidation which does not require the consent of stockholders under the DGCL or a merger or consolidation which has been approved by 75% of the members of the Board of Directors (in which case, in accordance with the DGCL, the affirmative vote of a majority of the total voting power of the outstanding Voting Stock would, with certain exceptions, be required for approval), (ii) the sale, lease or exchange of all or substantially all of the property and assets of the Company or (iii) the dissolution of the Company. "Voting Stock" is defined in the Charter as the TCI Group Common Stock, the 73 Liberty Media Group Common Stock, the TCI Ventures Group Common Stock and any class or series of Preferred Stock entitled to vote generally with the holders of the Common Stock on matters submitted to stockholders for a vote which currently would include the Series C-TCI Group Preferred Stock. and the Series C-Liberty Media Group common Stock. The Charter also provides for a Board of Directors of not less than three members, divided into three classes of approximately equal size, with each class to be elected for a three-year term at the annual meeting of stockholders at which such class of directors' term expires. The exact number of directors, currently ten, is fixed by the Board of Directors. The holders of Voting Stock and of Class B Preferred Stock, Series G Preferred Stock and Series H Preferred Stock, voting together as a single class, vote in elections for directors. (The holders of the Company's Series F Preferred Stock are entitled to vote in the election of directors; however, the DGCL prohibits the voting of such shares because such shares are held by subsidiaries of the Company.) Stockholders of the Company do not have cumulative voting rights. The Charter authorizes the issuance of 50,000,000 shares of Series Preferred Stock, of which 34,061,783 remain available for issuance as of March 31, 1998. On April 1, 1998, all of the outstanding shares of Series D Preferred Stock were redeemed to the extent not previously converted by the holders thereof pursuant to the terms thereof, with the effect that such retired or converted shares have been restored to the status of authorized and unissued shares of Series Preferred Stock, and may be reissued as shares of another series of Series Preferred Stock but may not be reissued as Series D Preferred Stock. Under the Charter, the Board of Directors is authorized, without further action by the stockholders of the Company, to establish the preferences, limitations and relative rights of the Series Preferred Stock. In addition, 1,900,000,000 shares of TCI Group Common Stock, 825,000,000 shares of Liberty Media Group Common Stock and 825,000,000 shares of TCI Ventures Group Common Stock are currently authorized by the Charter, of which 1,189,273,685 shares of TCI Group Common Stock, 431,960,040 shares of Liberty Media Group Common Stock and 388,826,224 shares of TCI Ventures Group Common Stock remain available for issuance as of March 31, 1998 (in each case without taking into consideration shares reserved for issuance upon conversion, exchange or exercise of outstanding convertible or exchangeable securities and options). The issue and sale of shares of TCI Group Common Stock, Liberty Media Group Common Stock, TCI Ventures Group Common Stock and/or Series Preferred Stock could occur in connection with an attempt to acquire control of the Company, and the terms of such shares of Series Preferred Stock could be designed in part to impede the acquisition of such control. The Charter requires the affirmative vote of 66 2/3% of the total voting power of the outstanding shares of Voting Stock, voting together as a single class, to approve any amendment, alteration or repeal of any provision of the Charter or the addition or insertion of other provisions therein. The Charter and the Company's Bylaws provide that a special meeting of stockholders will be held at any time, subject to the rights of the holders of any class or series of Preferred Stock, upon the call of the Secretary of the Company upon (i) the written request of the holders of not less than 66 2/3% of the total voting power of the outstanding shares of Voting Stock or (ii) at the request of not less than 75% of the members of the Board of Directors. Subject to the rights of any class or series of the Preferred Stock, the Company's Bylaws require that written notice of the intent to make a nomination at a meeting of stockholders must be received by the Secretary of the Company, at the Company's principal executive offices, not later than (a) with respect to an election of directors to be held at an annual meeting of stockholders, 90 days in advance of such meeting, and (b) with respect to an election of directors to be held at a special meeting of stockholders, the close of business on the seventh day following the day on which notice of such meeting is first given to stockholders. The notice must contain: (1) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (2) a representation that the stockholder is a holder of record of Voting Stock entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (3) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (4) such other information regarding each nominee 74 proposed by such stockholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Commission had each proposed nominee been nominated, or intended to be nominated, by the Board of Directors; and (5) the consent of each nominee to serve as a director of the Company if so elected. Any action to remove directors is required to be for "cause" (as defined in the Charter) and be approved by the holders of 66 2/3% of the total voting power of the outstanding shares entitled to vote in the election of directors. 75 PLAN OF DISTRIBUTION The Company may sell the Offered Securities to or through underwriters or dealers, and also may sell the Offered Securities directly to other purchasers or through agents. The distribution of the Offered Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. If an underwriter or underwriters are utilized in the sale, the Company will execute an underwriting agreement with such underwriters and the names of the underwriters and the terms of the transaction will be set forth in the Prospectus Supplement, which will be used by the underwriters to make resales of the Offered Securities. Unless otherwise indicated in the Prospectus Supplement, the obligations of any underwriters to purchase the Offered Securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all of the Offered Securities if any are purchased. If a dealer is utilized in the sale, the Company will sell the Offered Securities to the dealer as principal. The dealer may then resell the Offered Securities to the public at varying prices to be determined by such dealer at the time of resale. Offers to purchase Offered Securities may be solicited by the Company or agents designated by the Company from time to time. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Each underwriter, dealer and agent participating in the distribution of any Offered Securities which are issuable in bearer form will agree that it will not, directly or indirectly, offer any Offered Securities in bearer form for sale or resale in the United States or its possessions or to United States persons (subject to certain exceptions) or deliver any Offered Securities in bearer form within the United States or its possessions. See "Description of Debt Securities--Limitations on Issuance of Bearer Debt Securities." In connection with the sale of the Offered Securities, underwriters, dealers and agents may receive compensation in the form of discounts, concessions or commissions from the Company or from purchasers of the Offered Securities for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the Offered Securities may be deemed to be underwriters as that term is defined in the Securities Act, and any discounts or commissions received by them from the Company and any profits on the resale of the Offered Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any such person who may be deemed to be an underwriter will be identified and any such compensation received from the Company will be described in the Prospectus Supplement. If so indicated in the Prospectus Supplement, the Company will authorize agents and underwriters to solicit offers by certain specified institutions to purchase Offered Securities from the Company at the public offering price set forth in the Prospectus Supplement pursuant to contracts providing for payment and delivery on a specified date in the future. Institutions with whom such contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions but shall in all cases be subject to the approval of the Company. The obligations of any purchaser under any such contract will not be subject to any conditions except that (i) the purchase by such purchaser of the Offered Securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject, and (ii) if the Offered Securities being sold to such purchaser are also being sold to underwriters, the Company shall have sold to such underwriters the Offered Securities, not sold for delayed delivery, pursuant to the underwriting agreement referred to in the related Prospectus Supplement. The agents and underwriters will not have any responsibility in respect of the validity of performance of such contracts. The Prospectus Supplement will set forth the commission payable for solicitation of such contracts. 76 Agents, underwriters and dealers may be entitled under agreements entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the agents, underwriters or dealers may be required to make in respect thereof. Agents, underwriters and dealers may be customers of, engage in transactions with, or perform services for the Company in the ordinary course of business. The anticipated place and time of delivery for the Offered Securities will be set forth in the Prospectus Supplement. LEGAL MATTERS The legality of the Offered Securities will be passed upon for the Company by Stephen M. Brett, Esq., Executive Vice President and General Counsel of the Company. If agents or underwriters are utilized, the legality of the Offered Securities will be passed upon for such agents or underwriters by such counsel, which will be named in the Prospectus Supplement, as such agents or underwriters may select. EXPERTS The consolidated balance sheets of Tele-Communications, Inc. and subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1997, and all related financial statement schedules, which appear in the Annual Report on Form 10-K of Tele-Communications, Inc. for the year ended December 31, 1997, have been incorporated by reference herein in reliance upon the reports, dated March 20, 1998, of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The combined balance sheets of TCI Group as of December 31, 1997 and 1996, and the related combined statements of operations, equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 1997, which appear in the Annual Report on Form 10-K of Tele-Communications, Inc. for the year ended December 31, 1997, have been incorporated by reference herein in reliance upon the report, dated March 20, 1998, of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The report of KPMG Peat Marwick LLP covering the combined financial statements above refers to the effects of not consolidating TCI Group's interest in Liberty Media Group and TCI Ventures Group for all periods that TCI Group has an interest in Liberty Media Group and TCI Ventures Group. The combined balance sheets of Liberty Media Group as of December 31, 1997 and 1996, and the related combined statements of operations, equity, and cash flows for each of the years in the three-year period ended December 31, 1997, which appear in the Annual Report on Form 10-K of Tele-Communications, Inc. for the year ended December 31, 1997, have been incorporated by reference herein in reliance upon the report, dated March 20, 1998, of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The combined balance sheets of TCI Ventures Group as of December 31, 1997 and 1996, and the related combined statements of operations, equity, and cash flows for each of the years in the three-year period ended December 31, 1997, which appear in the Annual Report on Form 10-K of Tele-Communications, Inc. for the year ended December 31, 1997, have been incorporated by reference herein in reliance upon the report, dated March 20, 1998, of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The consolidated balance sheet of Telewest Communications plc and subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of operations and cash flows for each of the years in the three-year period ended December 31, 1997, which appear in the Annual Report on Form 10-K of 77 Tele-Communications, Inc. for the year ended December 31, 1997, have been incorporated by reference herein in reliance upon the report, dated March 19, 1998, of KPMG Audit Plc, chartered accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The consolidated balance sheets of Sprint Spectrum Holding Company, L.P. and subsidiaries as of December 31, 1997 and 1996 and the related consolidated statements of operations, changes in partners' capital and cash flows for each of the three years in the period ended December 31, 1997, incorporated herein by reference, which appear in the Annual Report on Form 10-K of Tele- Communications, Inc. for the year ended December 31, 1997 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report (which expresses an unqualified opinion and includes an explanatory paragraph referring to the emergence from the development stage), which is incorporated by reference herein, and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated balance sheets of Cablevision Systems Corporation and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, stockholders' deficiency and cash flows for each of the years in the three-year period ended December 31, 1996, and the related financial statement schedule, which are incorporated by reference in the Current Report on Form 8-K of Tele-Communications, Inc., dated March 6, 1998, have been incorporated by reference herein in reliance upon the report, dated April 1, 1997, of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. 78 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. ---------------
PAGE ---- Available Information...................................................... 2 Incorporation of Documents by Reference.................................... 3 The Company................................................................ 4 Use of Proceeds............................................................ 4 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends..................................... 4 Holding Company Structure.................................................. 5 Description of Debt Securities............................................. 6 Description of Series Preferred Stock...................................... 18 Description of Depositary Shares........................................... 21 Description of Capital Stock............................................... 24 Common Stock.............................................................. 24 Preferred Stock........................................................... 58 Plan of Distribution....................................................... 76 Legal Matters.............................................................. 77 Experts.................................................................... 77
- ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TELE-COMMUNICATIONS, INC. DEBT SECURITIES SERIES PREFERRED STOCK DEPOSITARY SHARES SERIES A TCI GROUP COMMON STOCK SERIES A LIBERTY MEDIA GROUP COMMON STOCK SERIES A TCI VENTURES GROUP COMMON STOCK ------------------- PROSPECTUS ------------------- June , 1998 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The aggregate estimated expenses, other than underwriting discounts and commissions, in connection with the offering pursuant to this Registration Statement are currently anticipated to be as follows: Registration Fee.................................................. $442,500 Blue Sky Fees and Expenses (including counsel fees)............... 20,000 Printing and Engraving Expenses................................... 100,000 Legal Fees and Expenses........................................... 100,000 Accounting Fees and Expenses...................................... 75,000 Rating Agency Fees................................................ 75,000 Miscellaneous..................................................... 15,000 -------- Total........................................................... $827,500 ========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law ("DGCL") provides, generally, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (except actions by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. A corporation may similarly indemnify such person for expenses actually and reasonably incurred by such person in connection with the defense or settlement of any action or suit by or in the right of the corporation, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, in the case of claims, issues and matters as to which such person shall have been adjudged liable to the corporation, provided that a court shall have determined, upon application, that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. Section 102(b)(7) of the DGCL provides, generally, that the certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of Title 8 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision may eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective. Article V, Section E of Tele-Communications, Inc.'s (the "Company") Restated Certificate of Incorporation provides as follows: "1. Limitation on Liability. To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this paragraph 1 shall be prospective only and shall not adversely affect any limitation, right or protection of a director of the Corporation existing at the time of such repeal or modification. II-1 2. Indemnification. (a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding") by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such person. Such right of indemnification shall inure whether or not the claim asserted is based on matters which antedate the adoption of this Section E. The Corporation shall be required to indemnify a person in connection with a proceeding (or part thereof) initiated by such person only if the proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. (b) PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses (including attorneys' fees) incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this paragraph or otherwise. (c) CLAIMS. If a claim for indemnification or payment of expenses under this paragraph is not paid in full within 60 days after a written claim therefor has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law. (d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this paragraph shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of this Certificate, the Bylaws, agreement, vote of stockholders or disinterested directors or otherwise. (e) OTHER INDEMNIFICATION. The Corporation's obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or nonprofit entity. 3. Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Section E shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification." Article II, Section 2.9 of the Company's Bylaws also contains an indemnity provision, requiring the Company to indemnify members of the Board of Directors and officers of the Company and their respective heirs, personal representatives and successors in interest for or on account of any action performed on behalf of the Company, to the fullest extent provided by the laws of the State of Delaware and the Company's Restated Certificate of Incorporation, as then or thereafter in effect. The Company has also entered into indemnification agreements with each of its directors (each director, an "indemnitee"). The indemnification agreements provide (i) for the prompt indemnification to the fullest extent permitted by law against any and all expenses, including attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with investigating, defending, being a witness or participating in (including on appeal), or in preparing for ("Expenses"), any threatened, pending or completed action, suit or II-2 proceeding, or any inquiry or investigation ("Claim"), related to the fact that such indemnitee is or was a director, officer, employee, agent or fiduciary of the Company or is or was serving at the Company's request as a director, officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by a director or officer in any such capacity, and against any and all judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection therewith) of any Claim, unless the Reviewing Party (one or more members of the Board of Directors or other person appointed by the Board of Directors, who is not a party to the particular claim, or independent legal counsel) determines that such indemnification is not permitted under applicable law and (ii) for the prompt advancement of Expenses, and for reimbursement to the Company if the Reviewing Party determines that such indemnitee is not entitled to such indemnification under applicable law. In addition, the indemnification agreements provide (i) a mechanism through which an indemnitee may seek court relief in the event the Reviewing Party determines that the indemnitee would not be permitted to be indemnified under applicable law (and therefore is not entitled to indemnification or expense advancement under the indemnification agreement) and (ii) indemnification against all expenses (including attorneys' fees), and advancement thereof if requested, incurred by the indemnitee in seeking to collect an indemnity claim or advancement of expenses from the Company or incurred in seeking to recover under a directors' and officers' liability insurance policy, regardless of whether successful or not. Furthermore, the indemnification agreements provide that after there has been a "change in control" in the Company (as defined in the indemnification agreements), other than a change in control approved by a majority of directors who were directors prior to such change, then, with respect to all determinations regarding a right to indemnity and the right to advancement of Expenses, the Company will seek legal advice only from independent legal counsel selected by the indemnitee and approved by the Company. The indemnification agreements impose upon the Company the burden of proving that an indemnitee is not entitled to indemnification in any particular case and negate certain presumptions that may otherwise be drawn against an indemnitee seeking indemnification in connection with the termination of actions in certain circumstances. Indemnitees' rights under the indemnification agreements are not exclusive of any other rights they may have under Delaware law, the Company's Bylaws or otherwise. Although not requiring the maintenance of directors' and officers' liability insurance, the indemnification agreements require that an indemnitee be provided with the maximum coverage available for any director or officer of the Company if there is such a policy. The Company may purchase liability insurance policies covering its directors and officers. In addition, pursuant to Section 6 of the form of Equity Underwriting Agreement and Section 6 of the form of Debt Underwriting Agreement, the Underwriters will agree to indemnify and hold harmless the Company and its directors and officers and each person, if any, who controls the Company within the meaning of either the Securities Act of 1933, as amended (the "Securities Act") or the Securities Exchange Act of 1934, as amended ("Exchange Act"), against certain liabilities including civil liabilities under the Securities Act or the Exchange Act. II-3 ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 1.1 Form of Underwriting Agreement for Equity Securities. 1.2 Form of Underwriting Agreement for Debt Securities. 4.1 Form of Senior Indenture. 4.2 Form of Senior Subordinated Indenture.* 4.3 Form of Subordinated Indenture.* 4.4 Form of Deposit Agreement.* 4.5 Restated Certificate of Incorporation of the Company, dated August 4, 1994, as amended on August 4, 1994, August 16, 1994, October 11, 1994, October 21, 1994, January 26, 1995, August 3, 1995, August 3, 1995, January 25, 1996, January 25, 1996, April 7, 1997, August 28, 1997, December 31, 1997 and December 31, 1997 (incorporated herein by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (Commission File No. 0-20421)). 4.6 Bylaws of the Company as adopted June 16, 1994 (incorporated herein by reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1994, as amended by Form 10-K/A (Amendment No. 1) (Commission File No. 0-20421)). 4.7 Form of Depositary Receipt for Depositary Shares (included in Exhibit 4.4).* 4.8 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI Group Common Stock, par value $1.00 per share (incorporated herein by reference to Exhibit 4.3 of Amendment No. 1 to the Company's registration statement on Form 8-A which was subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)). 4.9 Specimen Stock Certificate for Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par value $1.00 per share (incorporated herein by reference to Exhibit 4.5 of Amendment No. 1 to the Company's registration statement on Form 8-A, which was subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)). 4.10 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI Ventures Group Common Stock, par value $1.00 per share, of the Company (incorporated herein by reference to Exhibit 4.3 of the Company's registration statement on Form S-8, filed with the Commission on November 13, 1997 (No. 333-40141)). 5 Opinion of Stephen M. Brett, Esq.* 12 Calculation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends of the Company. 23.1 Consent of KPMG Peat Marwick LLP.
II-4 ITEM 16. EXHIBITS.
EXHIBIT NUMBER DESCRIPTION ------- ----------- 23.2 Consent of KPMG Peat Marwick LLP. 23.3 Consent of KPMG Peat Marwick LLP. 23.4 Consent of KPMG Peat Marwick LLP. 23.5 Consent of KPMG Audit Plc. 23.6 Consent of Deloitte & Touche LLP. 23.7 Consent of KPMG Peat Marwick LLP. 23.8 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).* 24.1 Power of Attorney (included on Page II-8) 25.1 Statement of Eligibility of the Trustee under the Senior Indenture, on Form T-1.+ 25.2 Statement of Eligibility of the Trustee under the Senior Subordinated Indenture, on Form T-1.+ 25.3 Statement of Eligibility of the Trustee under the Subordinated Indenture, on Form T-1.+
- -------- * To be filed by amendment. + To be filed separately pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939, as amended, and the rules and regulations prescribed by the Commission thereunder. ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrants pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-5 (3) To remove from registration by means of post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrants' annual report pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act ("TIA") in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the TIA. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the provisions described under Item 15 above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Greenwood Village, State of Colorado, on June 11, 1998. Tele-Communications, Inc. /s/ Stephen M. Brett By:__________________________________ NAME: STEPHEN M. BRETT TITLE: EXECUTIVE VICE-PRESIDENT II-7 POWER OF ATTORNEY Know All Men By These Presents, that each person whose signature appears below constitutes and appoints Stephen M. Brett, Esq. and Elizabeth M. Markowski, Esq., and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement and to file the same with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in- fact and agents and each of them full power and authority, to do and perform each and every act and thing requisite or necessary to be done in and about the premises, to all intents and purposes and as fully as they might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes may lawfully do or cause to be done in virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons (which persons constitute a majority of the Board of Directors) in the capacities and on the dates indicated:
SIGNATURE TITLE DATE --------- ----- ---- /s/ John C. Malone Chairman of the Board, Chief June 11, 1998 _____________________________ Executive Officer and JOHN C. MALONE Director of TCI (Principal Executive Officer) /s/ Leo J. Hindery, Jr. President, Chief Operating June 11, 1998 _____________________________ Officer and Director LEO J. HINDERY, JR. /s/ John W. Gallivan Director June 11, 1998 _____________________________ JOHN W. GALLIVAN Director _____________________________ PAUL A. GOULD /s/ Jerome H. Kern Director June 11, 1998 _____________________________ JEROME H. KERN Director _____________________________ ROBERT A. NAIFY /s/ Donne F. Fisher Director June 11, 1998 _____________________________ DONNE F. FISHER Director _____________________________ KIM MAGNESS /s/ J.C. Sparkman Director June 11, 1998 _____________________________ J.C. SPARKMAN /s/ Bernard W. Schotters Senior Vice President and June 11, 1998 _____________________________ Treasurer (Principal BERNARD W. SCHOTTERS Financial Officer) /s/ Gary K. Bracken Executive Vice President and June 11, 1998 _____________________________ Controller of TCI GARY K. BRACKEN Communications, Inc. (Principal Accounting Officer)
II-8 INDEX TO EXHIBITS
EXHIBIT NUMBER EXHIBIT ------- ------- 1.1 Form of Underwriting Agreement for Equity Securities. 1.2 Form of Underwriting Agreement for Debt Securities. 4.1 Form of Senior Indenture. 4.2 Form of Senior Subordinated Indenture.* 4.3 Form of Subordinated Indenture.* 4.4 Form of Deposit Agreement.* 4.5 Restated Certificate of Incorporation of the Company, dated August 4, 1994, as amended on August 4, 1994, August 16, 1994, October 11, 1994, October 21, 1994, January 26, 1995, August 3, 1995, August 3, 1995, January 25, 1996, January 25, 1996, April 7, 1997, August 28, 1997, December 31, 1997 and December 31, 1997 (Incorporated herein by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (Commission File No. 0-20421)). 4.6 Bylaws of the Company as adopted June 16, 1994 (incorporated herein by reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K for the year ended December 31, 1994, as amended by Form 10-K/A (Amendment No. 1) (Commission File No. 0-20421)). 4.7 Form of Depositary Receipt for Depositary Shares (included in Exhibit 4.4).* 4.8 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI Group Common Stock, par value $1.00 per share (incorporated herein by reference to Exhibit 4.3 of Amendment No. 1 to the Company's registration statement on Form 8-A which was subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)). 4.9 Specimen Stock Certificate for Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par value $1.00 per share (incorporated herein by reference to Exhibit 4.5 of Amendment No. 1 to the Company's registration statement on Form 8-A, which was subsequently amended by Form 8-A/A (Amendment Nos. 1, 2 and 3) (Commission File No. 0-20421)). 4.10 Specimen Stock Certificate for Tele-Communications, Inc. Series A TCI Ventures Group Common Stock, par value $1.00 per share, of the Company (incorporated herein by reference to Exhibit 4.3 of the Company's registration statement on Form S-8, filed with the Commission on November 13, 1997 (No. 333-40141)). 5 Opinion of Stephen M. Brett, Esq.*
EX-1.1 2 FORM OF UNDERWRITING AGREEMENT FOR EQUITY SECURITIES EXHIBIT 1.1 TELE-COMMUNICATIONS, INC. UNDERWRITING AGREEMENT FOR EQUITY SECURITIES __________ __, 19__ To the Representatives of the several Underwriters named in the respective Pricing Agreement hereinafter described Dear Sirs: From time to time Tele-Communications, Inc., a Delaware corporation (the "Company"), proposes to enter into one or more Pricing Agreements (each, a "Pricing Agreement") in the form of Annex I, with such additions and deletions as the parties may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Exhibit A to the applicable Pricing Agreement (such firms constituting the "Underwriters" with respect to such Pricing Agreement and the securities specified therein) shares of its Series A TCI Group Common Stock, $1.00 par value per share (the "Common Stock"), and/or shares of its Series Preferred Stock, par value $.01 per share (the "Preferred Stock"), (which may be represented by depositary shares representing shares of Preferred Stock (the "Depositary Shares")). (The Common Stock, the Preferred Stock and the Depositary Shares specified in Exhibit B to the applicable Pricing Agreement are collectively called the "Offered Securities.") Each of the Offered Securities shall have the terms set forth in Exhibit B to the applicable Pricing Agreement. The term "Underwriters" as used herein will mean and refer collectively to one or more of the several Underwriters named in Exhibit A to the applicable Pricing Agreement (and any substitute Underwriter pursuant to Section 9 hereof), the term "Underwriter" will refer to any of the several Underwriters named in Exhibit A to the applicable Pricing Agreement (and any substitute underwriter pursuant to Section 9 hereof), and the term "Representatives" will refer to the Representatives named in the applicable Pricing Agreement as the Representatives of the several Underwriters. Any reference to you in this Agreement or in the applicable Pricing Agreement shall be solely in your capacity as Representatives. The Company confirms as follows its agreement with you and the Underwriters. 1. Registration Statement and Prospectus: The Company has filed with the Securities and Exchange Commission (the "Commission"), in accordance with the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (collectively called the "Act"), a shelf registration statement on Form S-3 (File No. ), including a prospectus, relating to, among other securities, Common Stock, Preferred Stock (which may be represented by Depositary Shares) and shares of Common Stock which may be issuable from time to time upon conversion of convertible Preferred Stock , which has become effective under the Act, and will promptly file with the Commission a prospectus supplement specifically relating to the Offered Securities pursuant to Rule 424 under the Act. As used in this Agreement, the term "Registration Statement" means such shelf registration statement, including exhibits and financial statements and schedules and documents incorporated by reference therein, as amended or supplemented to the date hereof and, in the case of any reference to the Registration Statement as of a date subsequent to the date hereof, as amended or supplemented as of such date. The term "Basic Prospectus" means the prospectus, dated , as filed with the Commission pursuant to Rule 424 under the Act and forming part of the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement specifically relating to the Offered Securities as filed with the Commission pursuant to Rule 424 under the Act and any information deemed to be a part thereof pursuant to Rule 434 under the Act. The term "preliminary prospectus" means any preliminary prospectus supplement specifically relating to the Offered Securities together with the Basic Prospectus. Any reference herein to any preliminary prospectus or to the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such preliminary prospectus or the Prospectus, as the case may be, and any reference herein to any amendment or supplement to any preliminary prospectus or the Prospectus, except the reference in Section 4(c), shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and so incorporated by reference. 2. Agreements to Sell and Purchase. The Company agrees to sell to the Underwriters, and upon the basis of the representations, warranties and agreements of the Company herein contained and subject to the terms and conditions of this Agreement and the applicable Pricing Agreement the Underwriters agree to purchase from the Company, severally and not jointly, the number of Offered Securities set forth opposite each Underwriter's respective name in Exhibit A to such Pricing Agreement, at a purchase price specified therein. If any Offered Securities consist of shares of Preferred Stock and the Prospectus so provides, such shares of Preferred Stock will be deposited by the Company against delivery of receipts ("Depositary Receipts") to be issued by a depositary to be named by the Company (the "Depositary") under a deposit agreement (a "Deposit Agreement") between the Company, the Depositary and the holders from time to time of the Depositary Receipts issued thereunder and evidencing Depositary Shares. Each Depositary Share will represent the number of deposited shares of Preferred Stock specified in the applicable prospectus supplement and in Exhibit B to the applicable Pricing Agreement The terms and rights of any particular issuance and sale of Offered Securities shall be as specified in the applicable Pricing Agreement and, if the Offered Securities include Preferred Stock, -2- in or pursuant to a resolution or resolutions of the Board of Directors of the Company or a duly authorized committee thereof and set forth in a certificate of designations (the "Certificate of Designations") to be filed with the Secretary of State of the State of Delaware pursuant to Section 151 of the General Corporation Law of the State of Delaware (the "General Corporation Law"). Common Stock, Preferred Stock and Depositary Shares may be offered and sold separately or as units, as specified in the applicable prospectus supplement and in Exhibit B to the Pricing Agreement. The particular sales of certain Offered Securities may be made from time to time to the Underwriters specified in the applicable Pricing Agreement, for whom you may act as Representatives. (The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to Underwriters who act without any firm being designated as their representative.) The obligation of the Company to issue and sell, and the obligation of you or any of the Underwriters to purchase, shall be evidenced by the applicable Pricing Agreement with respect to the Offered Securities specified therein, and, prior to the execution of such Pricing Agreement, this Agreement shall not be construed as an obligation of the Company to sell any Offered Securities or as an obligation of the Underwriters to purchase any Offered Securities. A Pricing Agreement in the form of Annex I shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and the applicable Pricing Agreement shall be several and not joint. Each Pricing Agreement shall specify the aggregate number of Offered Securities that the Company proposes to issue and sell (the "Firm Securities") and, with respect to any grant by the Company to the Underwriters of the option described in Section 3 hereof, the maximum number of Offered Securities that the Company proposes to issue and sell to cover over-allotments (the "Optional Securities"), the initial public offering price of such Firm Securities and Optional Securities or the manner of determining such price, the purchase price to the Underwriters of such Firm Securities and Optional Securities, the names of the Underwriters, the names of the Representatives of such Underwriters, the number of such Firm Securities and Optional Securities, if any, to be purchased by each Underwriter and the commission, if any, payable to the Underwriters with respect thereto. The Pricing Agreement shall also specify (to the extent not set forth in the Registration Statement and Prospectus with respect thereto) the terms of such Firm Securities and Optional Securities. Upon the execution of the Pricing Agreement applicable to any Offered Securities and authorization by the Representatives of the release of the Firm Securities, the Company understands that the Underwriters propose to offer the Firm Securities for sale upon the terms and conditions set forth in the Prospectus, as amended or supplemented. -3- With respect to any Offered Securities purchased by an Underwriter that such Underwriter continues to own or hold at any time on or after the 90th day following the applicable Closing Date (as defined in Section 3), such Underwriter agrees that upon receipt of written notice by the Representatives from the Company of the Company's intention to bid for or purchase any Offered Security or any security of the same class and series as the Offered Securities or to take any other action, directly or indirectly, the taking of which would be proscribed by Regulation M promulgated by the Commission under the Exchange Act (or any successor or equivalent rule or regulation) during the distribution of the Offered Securities, such Underwriter will, and will cause its "affiliated purchasers" (as defined in Rule 100 of said Regulation) to, cease distributing any Offered Securities for such period of time as the Company may deem necessary so that the action or actions proposed to be taken by it directly or indirectly may be taken in full compliance with such Regulation (or any successor or equivalent rule or regulation). 3. Delivery and Payment: Delivery of and payment for the Firm Securities shall be made on the date and at the time agreed to in the applicable Pricing Agreement (such time and date are referred to herein as a "Closing Date"), at the offices of Baker & Botts, L.L.P., 599 Lexington Avenue, New York, New York. The Closing Date and the place of delivery of and payment for the Firm Securities may be varied by agreement between you and the Company. Delivery of Firm Securities (in definitive form and registered in such names as you shall request at least 48 hours prior to a Closing Date by written notice of the Company) shall be made to you for the account of the respective Underwriters against payment by you on behalf of the respective Underwriters of the purchase price therefor by cashier or official bank check or checks payable to the order of the Company or by wire transfer to an account specified by the Company of same day federal funds. The Company agrees to make the Firm Securities (or Depository Receipts representing any Firm Securities) available to you for inspection at least 24 hours prior to the Closing Date or such shorter period of time as you may agree to. If the applicable Pricing Agreement grants to the Underwriters the right (an "Over-Allotment Option") to purchase at their election up to the number of Optional Securities allocated to each of the several Underwriters in the applicable Pricing Agreement, upon the terms and conditions specified herein and therein, for the sole purpose of covering over-allotments in the sale of the Firm Securities, such election to purchase Optional Securities may be exercised by written notice from the Representatives within the period specified in the applicable Pricing Agreement setting forth the aggregate number of Optional Securities to be purchased, the number of Optional Securities to be purchased by each of the Underwriters, and the date on which such Optional Securities are to be delivered, as determined by the Representatives but in no event earlier than the Closing Date, or, unless the Representatives and the Company otherwise agree in writing, later than the time specified in the applicable Pricing Agreement. 4. Agreements of the Company. The Company agrees with you as follows: -4- (a) The Company will notify you promptly, and (if requested by you in writing) will confirm such advice in writing, during the period of the distribution of the Offered Securities (1) of the effectiveness of any amendment to the Registration Statement and of the filing of any supplement to the Prospectus, (2) of any comments of the Commission regarding the Registration Statement or the Prospectus (or any of the documents incorporated by reference therein) or of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (3) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceedings for that purpose, (4) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities for offer or sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose and (5) of the happening of any event during the period mentioned in paragraph (d) below which makes any statement of a material fact made in the Registration Statement or the Prospectus (as theretofore amended or supplemented) untrue or which requires the making of any changes in the Registration Statement or the Prospectus (as theretofore amended or supplemented) in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading. The Company will use its reasonable best efforts to prevent the issuance of any order suspending the effectiveness of the Registration Statement or suspending the qualification of the Offered Securities for offer or sale in any jurisdiction, and if any such order is issued, the Company will make every reasonable effort to obtain the withdrawal of such order at the earliest possible time. (b) The Company will furnish to each of you, without charge, one conformed copy of the Registration Statement and any post-effective amendment thereto filed in connection with the offering of the Offered Securities, including all financial statements and schedules, exhibits and documents incorporated therein by reference (including exhibits incorporated therein by reference to the extent not previously furnished to you). (c) The Company will give you advance notice of its intention to file any amendment or supplement to the Registration Statement or the Prospectus with respect to the Offered Securities, and will not file any such amendment or supplement to which you shall reasonably object in writing. (d) During the period of time that the Prospectus is required by law to be delivered, the Company will deliver to you for delivery to each Underwriter, without charge, as many copies of the Prospectus or any amendment or supplement thereto as such Underwriter may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by the Underwriters and by all dealers to whom the Offered Securities may be sold, both in connection with the offering or sale of the Offered Securities and for such period of time thereafter as the Prospectus is required by law to be delivered in connection therewith. If during such period of time any event shall occur which in the judgment of the Company should be set forth (or incorporated by reference) in the -5- Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to supplement or amend the Prospectus to comply with law, the Company will forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and forthwith file all reports and any definitive proxy statement or information statement required to be filed by the Company with the Commission pursuant to Section 13 or 14 of the Exchange Act subsequent to the date of the Prospectus and during such period, and will deliver to each Underwriter, without charge, such number of copies thereof as such Underwriter may reasonably request. If during such period of time any event shall occur which in your judgment should be so set forth (or incorporated by reference) in the Prospectus, or which in your judgment makes it necessary to so supplement or amend the Prospectus, the Company will consult with you concerning the necessity of filing with the Commission a supplement or an amendment to the Prospectus or a report pursuant to Section 13 or 14 of the Exchange Act. (e) Prior to any public offering of any Offered Securities by the Underwriters, the Company will cooperate with you and counsel retained by you on behalf of the Underwriters in connection with the registration or qualification of Offered Securities (and any Common Stock issuable upon conversion of any Offered Securities) for offer and sale under the securities or Blue Sky laws of, and the determination of the eligibility of Offered Securities for investment under the laws of, such jurisdictions as you request; provided, that in no event shall the Company be obligated to qualify to do business as a foreign corporation or as a securities dealer in any jurisdiction where it is not now so qualified, to conform its capitalization or the composition of its assets to the securities or Blue Sky laws of any jurisdiction or to take any action which would subject it to taxation or general service of process in any jurisdiction where it is not now so subject. The Company will pay all reasonable fees and expenses (including reasonable counsel fees and expenses) relating to registration or qualification of Offered Securities (and any Common Stock issuable upon conversion of any Offered Securities) under such securities or Blue Sky laws and in connection with the determination of the eligibility of Offered Securities for investment under the laws of such jurisdictions as you may designate. (f) The Company will make generally available to its security holders and to you consolidated earnings statements (which need not be audited) that satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder. (g) The Company will pay all expenses in connection with: (1) the preparation, printing and filing of the Registration Statement, any preliminary prospectus, the Prospectus, any legal investment memorandum and Blue Sky memorandum as contemplated by Section 4(e); (2) any fees charged by securities rating agencies for rating any of the Offered Securities; (3) the preparation, issuance and delivery of the Offered Securities (including Depositary Receipts evidencing Depositary Shares) (other than transfer taxes); (4) the preparation, execution and delivery of any deposit agreement and, to the extent set forth -6- therein, the fees and expenses of the Depositary; (5) the printing of any dealer agreement; and (6) furnishing such copies of the Registration Statement, the Prospectus and any preliminary prospectus, and all amendments and supplements thereto, as may be requested for use in connection with the offering and sale of Offered Securities by dealers to whom Offered Securities may be sold. (h) If this Agreement is terminated by you because any condition to the obligations of you and the Underwriters set forth in Section 7 hereof is not satisfied or because of any failure or refusal on the part of the Company to comply with the terms of this Agreement or the applicable Pricing Agreement, or if for any reason the Company shall be unable to perform its obligations herein or therein, the Company will reimburse you on behalf of the Underwriters for all out-of-pocket expenses (including the fees and expenses of counsel retained by you on behalf of the Underwriters) reasonably incurred by you in connection herewith. The Company will not in any event be liable to you or any of the Underwriters for damages on account of loss of anticipated profits. (i) From the date hereof to and including the applicable Closing Date, the Company will not offer or sell, or contract to sell, Offered Securities pursuant to a public offering without your prior written consent. 5. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that: (a) the documents incorporated by reference in the Registration Statement and the Prospectus, when they were filed (or, if any amendment with respect to any such document was filed, when such amendment was filed) with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and any further documents so filed and incorporated by reference during the period of the distribution of the Offered Securities will, when they are filed with the Commission, conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder; none of such documents, when it was filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; (b) the Registration Statement, when declared effective by the Commission, complied in all material respects with the requirements of the Act; each preliminary prospectus, if any, relating to the Offered Securities, filed pursuant to Rule 424 or Rule 434 -7- under the Act, will comply when so filed in all material respects with the Act; and when the Prospectus is first filed with the Commission pursuant to Rule 424 or Rule 434 and as of the applicable Closing Date, the Registration Statement and the Prospectus (as amended or supplemented, if applicable) will comply in all material respects with the requirements of the Act. When it was declared effective by the Commission, the Registration Statement did not, and as of the date the Prospectus is first filed with the Commission pursuant to Rule 424 or Rule 434 and as of the applicable Closing Date the Registration Statement (as amended or supplemented, if applicable) will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. When the Prospectus if first filed with the Commission pursuant to Rule 424 or Rule 434 and as of the applicable Closing Date, the Prospectus (as amended or supplemented, if applicable) will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, this representation and warranty does not apply to statements or omissions in the Registration Statement or the Prospectus or any preliminary prospectus made in reliance upon information furnished to the Company in writing by any Underwriter through the Representatives expressly for use therein; (c) the Offered Securities have been duly authorized by the Company and conform to the descriptions thereof in the Prospectus and in the related Pricing Agreement; (d) if any of the Offered Securities is Common Stock, such Common Stock has been duly and validly authorized and, when such Common Stock is issued and delivered pursuant to this Agreement and the Pricing Agreement and paid for by the Underwriters in accordance therewith, such Common Stock will be duly and validly issued and fully paid and non-assessable; (e) if any of the Offered Securities is Preferred Stock, such Preferred Stock has been duly and validly authorized and, upon the filing of a Certificate of Designations for such Preferred Stock with the Delaware Secretary of State and the issuance and delivery of such Preferred Stock against payment therefor by the Underwriters in accordance with this Agreement and the Pricing Agreement, such Preferred Stock will be duly and validly issued and fully paid and non-assessable; if such Preferred Stock is convertible into Common Stock, the Common Stock initially issuable upon conversion of such Preferred Stock has been reserved for issuance upon such conversion and, when issued in accordance with the terms of the Certificate of Designations upon conversion of such Preferred Stock, such Common Stock will be duly authorized, validly issued, fully paid and non-assessable; (f) if the Offered Securities include Preferred Stock and Depositary Shares, the Deposit Agreement has been duly authorized and, when executed and delivered by the Company at the Closing Date and, assuming due authorization, execution and delivery by the Depositary, at such Closing Date will constitute a valid and legally binding agreement -8- of the Company enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles (regardless of whether the issue of enforceability is considered in a proceeding at law or in equity); when such Preferred Stock is issued and delivered to the Depositary against receipt of Depositary Receipts evidencing such Depositary Shares and payment therefor by the Underwriters in accordance with this Agreement and the Pricing Agreement, such Depositary Shares will be duly and validly issued and the persons in whose names the Depositary Receipts are registered shall be entitled to the rights specified therein and in the Deposit Agreement; (g) the issuance and sale of the Offered Securities and the fulfillment of the terms of this Agreement and the related Pricing Agreement will not result in a breach of any of the terms or provisions of, or constitute a default under, the Company's charter or by-laws or any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company or any of its significant subsidiaries (as such term is defined in Rule 1-02(v) of Regulation S-X) is now a party or by which it is bound, or any order of any court or governmental agency or authority entered in any proceeding to which the Company or any of its significant subsidiaries was or is now a party or by which it is bound; (h) KPMG Peat Marwick LLP, the Company's auditors, are independent accountants as required by the Act; (i) so long as may be required for the distribution of the Offered Securities by any Underwriter or by any dealers that participate in the distribution thereof, the Company will comply with all requirements under the Exchange Act relating to the timely filing with the Commission of its reports pursuant to Section 13 of the Exchange Act and of its proxy statements pursuant to Section 14 of the Exchange Act; and (j) except to the extent set forth in the Prospectus, the Company has not received any notice of, nor does it have any actual knowledge of, any failure by it or any of its significant subsidiaries to be in substantial compliance with all existing statutes and regulations applicable to it or such subsidiaries, which failure would materially and adversely affect the conduct of the business of the Company and its subsidiaries, considered as a whole. 6. Indemnification: The Company agrees to indemnify and hold harmless each Underwriter, and each person, if any, who controls each Underwriter within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were -9- made, not misleading, except insofar as such omission or allegation thereof is based upon information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein; provided, however, that the Company shall not indemnify an Underwriter or any person who controls such Underwriter for any such losses, claims, damages or liabilities alleged by any person who purchased Offered Securities from such Underwriter if the untrue statement, omission or allegation thereof upon which such losses, claims, damages or liabilities are based was made in: (i) any preliminary prospectus, if a copy of the Prospectus (as then amended or supplemented) was not sent or given by or on behalf of such Underwriter to such person at or prior to the written confirmation of the sale of the Offered Securities to such person, and if the Prospectus (as so amended or supplemented) corrected the untrue statement or omission giving rise to such loss, claim, damage or liability; (ii) any Prospectus used by such Underwriter or any person who controls such Underwriter, after such time as the Company advised the Representatives that the filing of a post-effective amendment or supplement thereto was required, except the Prospectus as so amended or supplemented; or (iii) any Prospectus used after such time as the obligation of the Company to keep the same current and effective has expired. This indemnity will be in addition to any liability which the Company may otherwise have. If any action or proceeding (including any governmental investigation) shall be brought or asserted against an Underwriter or any person controlling an Underwriter in respect of which indemnity may be sought from the Company, such Underwriter or such controlling person shall promptly notify the Company, in writing, and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to you and the payment of all expenses. Any omission to so notify the Company shall not, however, relieve the Company from any liability which it may have to any indemnified party otherwise than under this Section 6. An Underwriter or any person controlling an Underwriter shall have the right to employ separate counsel in any such action or proceeding and to participate in the defense thereof, but the fees and expenses of such separate counsel shall be at such Underwriter's expense or the expense of such controlling person unless (a) the Company has agreed to pay such fees and expenses or (b) the Company shall have failed to assume the defense of such action or proceeding and employ counsel reasonably satisfactory to you in any such action or proceeding or (c) the named parties to any such action or proceeding (including any impleaded parties) include both such Underwriter or such controlling person and the Company, and you shall have been advised by your counsel that there may be a conflict of interest between such Underwriter or controlling person and the Company in the conduct of the defense of such action (in which case, if such Underwriter or such controlling person notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense of such action or proceeding on behalf of such Underwriter or such controlling person), it being understood, however, that the Company shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (unless the members of such firm are not admitted to practice in a jurisdiction where an action is pending, in which case the Company shall pay the reasonable fees and expenses of one additional firm of attorneys to act as local counsel in such jurisdiction, provided the services of such counsel are substantially limited to that of -10- appearing as attorneys of record) at any time for all indemnified parties, which firm shall be designated by you. The Company shall not be liable for any settlement of any such action or proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the Company agrees to indemnify and hold harmless each Underwriter and any such controlling person from and against any loss or liability by reason of such settlement or judgment. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors and each of its officers, and each person, if any, who controls the Company within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with respect to information furnished in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any preliminary prospectus. In case any action or proceeding shall be brought against the Company or its directors or officers or any such controlling person, in respect of which indemnity may be sought against one or more of the several Underwriters, such Underwriters acting through the Representatives shall have the rights and duties given to the Company, and the Company or its directors or officers or such controlling person shall have the rights and duties given to you and the several Underwriters, by the preceding paragraph. If the indemnification provided for in this Section 6 is unavailable to an indemnified party under the first or third paragraph hereof in respect of any losses, claims, damages or liabilities referred to therein (other than by reason of such indemnified party's failure to comply with the first sentence of the second paragraph of this Section 6), then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other in connection with the offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of the Offered Securities received by the Company bear to the total underwriting discounts received by the Underwriters in respects thereof. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact related to information supplied by the Company or by the Underwriters through the Representatives and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, and liabilities referred to above shall be deemed to include, subject to the limitations set -11- forth in the second paragraph of this Section 6, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company and each Underwriter agrees that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6, the Underwriters shall not be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities were offered to the public exceeds the amount of any damages which the Underwriters have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution or indemnification from any person who was not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section 6 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (a) any investigation made by or on behalf of any Underwriter, by or on behalf of any person controlling any Underwriter or by or behalf of the Company, (b) acceptance of any of the Offered Securities and payment therefor or (c) any termination of this Agreement or the applicable Pricing Agreement. 7. Conditions of the Obligations of You and the Underwriters: The obligations of you and the Underwriters hereunder and under the applicable Pricing Agreement are subject to the following conditions: (a) at the applicable Closing Date no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall be pending or threatened by the Commission; and the Representatives shall have received a certificate, dated the applicable Closing Date and signed by the Chairman of the Board, the President, an Executive Vice President or a Senior Vice President of the Company (who may, as to threatened proceedings, rely upon the best of his information and belief), to that effect and to the effect set forth in clause (f) of this Section 7; (b) the Representatives shall have received opinions, dated the applicable Closing Date and reasonably satisfactory to counsel retained by the Representatives on behalf of the Underwriters, (A) from Messrs. Cole, Raywid & Braverman or such other special communications counsel for the Company as may be reasonably satisfactory to the Representatives, (B) from the General Counsel of the Company to the following effect and covering such additional matters as the Representatives may reasonably request: (i) the Company and each of its significant subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to carry -12- on its business as described in the Prospectus (as amended or supplemented, if applicable) and the Company has the corporate power and authority to execute and deliver and perform its obligations under this Agreement and the Pricing Agreement, and to issue and sell the Offered Securities as contemplated by this Agreement and the Pricing Agreement. (ii) the Company and each of its significant subsidiaries is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would, in the aggregate, have a material adverse effect upon the financial condition, results of operations, business or properties of the Company and its subsidiaries taken as a whole; (iii) all corporate proceedings legally required in connection with the authorization and issuance of the Offered Securities and the sale of the Offered Securities by the Company in accordance with the terms of this Agreement and the Pricing Agreement have been taken; (iv) to the best knowledge of such counsel, there is no legal or governmental proceeding pending or threatened against the Company or any of its subsidiaries which is required to be disclosed in the Prospectus (as amended or supplemented, if applicable) and is not so disclosed and correctly summarized therein; (v) to the best knowledge of such counsel, there is no contract or other document known to such counsel of a character required to be described in the Prospectus (as amended or supplemented, if applicable) or to be filed as an exhibit to the Registration Statement (or to a document incorporated by reference therein) that is not described or filed as required; (vi) the execution and delivery of this Agreement and of the Pricing Agreement, the issuance of the Offered Securities and the fulfillment of the terms herein and therein contained do not conflict with, or result in a breach of, or constitute a default under, the charter or by-laws of the Company or, to the best knowledge of such counsel, conflict in any material respect with, or result in a material breach of or constitute a material default under any material agreement, indenture or other instrument known to such counsel to which the Company or any of its significant subsidiaries is a party or by which it is bound, or result in a violation of any law, administrative regulation or court or governmental decree known to such counsel applicable to the Company or any of its subsidiaries, except that such counsel need not express any opinion with respect to (i) matters opined upon by special communications counsel and Messrs. Sherman & Howard or (ii) the Blue Sky or securities laws of any jurisdiction; and -13- (vii) to the best knowledge of such counsel, neither the Registration Statement nor the Prospectus, as amended or supplemented, if applicable (except as to the financial statements and schedules and any other financial and statistical data contained or incorporated by reference in the Registration Statement or Prospectus, as to which no opinion need be expressed), contained, as of the date of the Prospectus was first filed with the Commission pursuant to Rule 424, or contains, as of the applicable Closing Date, any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus as amended or supplemented, if applicable, in light of the circumstances under which they were made,) not misleading. (C) from Messrs. Sherman & Howard, or from such other special counsel for the Company as may be reasonably satisfactory to the Representatives, to the following effect and covering such additional matters as the Representatives may reasonably request: (i) the execution and delivery of this Agreement and of the Pricing Agreement, the issuance of the Offered Securities and the fulfillment of the terms herein and therein contained do not, to the best knowledge of such counsel, result in a material breach of or constitute a material default under any material agreement for borrowed money known to such counsel to which the Company or any of its significant subsidiaries is a party or by which it is bound; and (ii) the Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and is not subject to regulation under such Act. and (D) from Baker & Botts, L.L.P., special counsel to the Company, or such other counsel to the Company as may be reasonably satisfactory to the Representatives, to the following effect and covering such additional matters as the Representatives may reasonably request: (i) this Agreement and the applicable Pricing Agreement have been duly authorized, executed and delivered by the Company; (ii) if any of the Offered Securities is Common Stock, such Common Stock has been duly and validly authorized and, when such Common Stock is issued, signed by the transfer agent and delivered pursuant to this Agreement and the Pricing Agreement and paid for by the Underwriters in accordance therewith, such Common Stock will be duly and validly issued and fully paid and non-assessable; -14- (iii) if any of the Offered Securities is Preferred Stock, such Preferred Stock has been duly and validly authorized and, upon the filing of a Certificate of Designations for such Preferred Stock with the Delaware Secretary of State and the issuance, the execution by the transfer agent and delivery of such Preferred Stock against payment therefor by the Underwriters in accordance with this Agreement and the Pricing Agreement, such Preferred Stock will be duly and validly issued and fully paid and non-assessable; if such Preferred Stock is convertible into Common Stock, the Common Stock initially issuable upon conversion of such Preferred Stock has been reserved for issuance upon such conversion and, when issued in accordance with the terms of the Certificate of Designations upon conversion of such Preferred Stock, such Common Stock will be duly authorized, validly issued, fully paid and non-assessable; (iv) if the Offered Securities include Preferred Stock and Depositary Shares, the Deposit Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Depositary, constitutes a valid and legally binding agreement of the Company enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles (regardless of whether the issue of enforceability is considered in a proceeding at law or in equity); and the Deposit Agreement conforms to the description thereof in the Prospectus, as amended or supplemented; (v) the Registration Statement is effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; and (vi) the Offered Securities conform in all material respects as to legal matters to the descriptions thereof in the Prospectus, as amended or supplemented. In addition, such counsel shall state that "The Registration Statement and the Prospectus, as amended or supplemented, if applicable (except as to (x) the financial statements and schedules and any other financial and statistical data contained or incorporated by reference therein and (y) the documents incorporated or deemed to be incorporated by reference therein, as to which no opinion is expressed), complied, as of the date the Prospectus was first filed with the Commission pursuant to Rule 424, and comply, as of the date hereof, as to form in all material respects with the requirements of the Act and the rules and regulations of the Commission under the Act (the "Rules"). In passing upon the form of such documents, we have necessarily assumed the correctness and completeness of the statements made or included therein by the Company and take no responsibility for the accuracy, completeness or fairness of the statements contained therein except insofar as such statements relate to the description of the Offered Securities or relate to us. However, in connection -15- with the preparation of the Registration Statement and the Prospectus, we had conferences with certain officers and other representatives of the Company, and our examination of the Registration Statement and the Prospectus and our discussions in such conferences did not disclose to us any information (relying as to the materiality of any such information primarily upon officers and other representatives of the Company) which gave us reason to believe that either the Registration Statement or the Prospectus, as amended or supplemented, if applicable (except as to (x) the financial statements and schedules and any other financial and statistical data contained or incorporated by reference therein and (y) the documents incorporated therein or deemed to be incorporated by reference therein, as to which no belief is expressed), contained, as of the date the Prospectus was first filed with the Commission pursuant to Rule 424, or contains, as of the date hereof, any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statement therein (in the cases of the Prospectus, as amended, or supplemented, if applicable, in light of the circumstances under which they were made) not misleading." In giving the opinions required under this Section 7(b), subparagraphs (A), (B), (C) and (D), each such counsel may rely (x) as to matters of fact, to the extent they deem proper, upon certificates of officers of the Company, public officials and others, and (y) as to matters of law if other than the law of the United States or Colorado (in the case of Messrs. Sherman & Howard and General Counsel of the Company) or New York (in the case of Baker & Botts, L.L.P.), on the opinions of local counsel retained by them or the Company, provided that such counsel are satisfactory to the Representatives and counsel retained by the Representatives on behalf of the Underwriters; (c) if the Offered Securities include Preferred Stock and Depositary Shares, the Representatives shall have received on the applicable Closing Date from counsel to the Depositary an opinion, dated such Closing Date, to the following effect; (i) the Depositary has full power, authority and legal right to execute, deliver and carry out the terms of the Deposit Agreement; (ii) the Deposit Agreement has been duly authorized, executed and delivered by the Depositary and, assuming due authorization, execution and delivery by the Company, constitutes a valid and legally binding agreement of the Depositary enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles (regardless of whether the issue of enforceability is considered in a proceeding at law or in equity); and (iii) upon due issuance by the Depositary of Depositary Shares evidenced by Depositary Receipts in accordance with the terms of the Deposit Agreement against deposit in accordance with the Deposit Agreement of validly issued, fully paid and non-assessable shares of Preferred Stock, such Depositary Shares will be -16- duly and validly issued and the persons in whose names the Depositary Receipts are registered shall be entitled to the rights specified therein and in the Deposit Agreement. (d) the Representatives shall have received on the applicable Closing Date from counsel retained by the Representatives on behalf of the Underwriters an opinion with respect to the Offered Securities, the Registration Statement and the Prospectus in the form customarily given by such firm, including an opinion to the effect that the Registration Statement and the Prospectus, as amended or supplemented, if applicable (except as to (x) the financial statements and schedules and any other financial and statistical data contained or incorporated by reference therein, and (y) the documents incorporated or deemed to be incorporated by reference therein, as to which no opinion need be expressed) comply as to form in all material respects with the Act; (e) on the applicable Closing Date the Representatives shall have received a letter addressed to the Representatives from KPMG Peat Marwick LLP, independent auditors for the Company, reasonably satisfactory to the Representatives; (f) the representations and warranties of the Company in this Agreement shall be true and correct on and as of the applicable Closing Date; the Company shall have complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the applicable Closing Date; and except as reflected in or contemplated by the Registration Statement and the Prospectus, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been, at the applicable Closing Date, any material adverse change in the condition (financial or otherwise), business, prospects or results of operations of the Company and its subsidiaries, considered as a whole; and (g) subsequent to the date of the applicable Pricing Agreement, there shall not have occurred any change, or any development involving a prospective change, in or affecting particularly the business, prospects or financial affairs of the Company and its subsidiaries, considered as a whole which, in the reasonable judgment of the Representatives, is so material and adverse that it would be impracticable to proceed with the public offering or delivery of the Offered Securities on the terms and in the manner contemplated by the Prospectus. 8. Termination of Pricing Agreement. The obligation of the Underwriters to purchase the Offered Securities may be terminated at any time prior to the applicable Closing Date by notice to the Company from the Representatives, without liability on the part of the Underwriters to the Company, if, on or prior to such date (i) additional material governmental restrictions, not in force and effect on the date of the applicable Pricing Agreement, shall have been imposed upon trading in securities generally, or minimum or maximum prices shall have been generally established on the New York Stock Exchange or on the American Stock Exchange, or trading in securities generally -17- shall have been suspended on either such Exchange or trading in the Common Stock or securities of the Company of the same class as the Offered Securities in the over-the-counter market shall have been suspended or a general banking moratorium shall have been established by Federal or New York authorities, or (ii) a war involving the United States of America or other national calamity shall have occurred or shall have accelerated to such an extent as to affect adversely the marketability of the Offered Securities. 9. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail on the applicable Closing Date to purchase the Firm Securities or Optional Securities, as the case may be, that it or they are obligated to purchase hereunder (the "Defaulted Securities"), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any substitute underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be approved by the Representatives and upon the terms herein set forth; provided, however, that if the Representatives have not completed such arrangements within such 24-hour period, then: (a) if the amount of Defaulted Securities does not exceed 10% of the aggregate amount of the Firm Securities or the Optional Securities, as the case may be, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the amount of Defaulted Securities exceeds 10% of the aggregate amount of Firm Securities or Optional Securities, as the case may be, the Company shall be entitled to an additional 24-hour period to find one or more substitute underwriters satisfactory to the Representatives in their reasonable discretion to purchase such Defaulted Securities. In the event of any such default either the Representatives or the Company shall have the right to postpone the applicable Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements relating to the purchase of the Offered Securities. If the amount of Defaulted Securities exceeds 10% of the aggregate amount of the Firm Securities or the Optional Securities, and neither the Representatives nor the Company make arrangements pursuant to this Section 9 within the period stated for the purchase of the Defaulted Securities, the applicable Pricing Agreement shall terminate with respect to such Firm Securities or Optional Securities, as the case may be, without liability on the part of any non-defaulting Underwriter to the Company except as provided in Section 6. No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default. -18- A substitute underwriter hereunder shall be an Underwriter for all purposes of this Agreement and the applicable Pricing Agreement. 10. Miscellaneous: Notice given pursuant to any of the provisions of this Agreement or the applicable Pricing Agreement shall be in writing and shall be mailed or delivered (a) to the Company at its principal executive office located at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000, attention: Chief Financial Officer, or (b) to you at the address specified in the applicable Pricing Agreement. Any notice under Section 8 hereof may be telex or telephone, but if so made shall be subsequently confirmed in writing. This Agreement and the applicable Pricing Agreement have been and are made solely for the benefit of the Underwriters and the Company and of the controlling persons, directors and officers referred to in Section 6 hereof, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or the applicable Pricing Agreement. The term "successors and assigns" as used in this Agreement shall not include a purchaser, as such purchaser, of Offered Securities from any Underwriter. This Agreement and the applicable Pricing Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. -19- Please confirm that the foregoing correctly sets forth the agreement between the Company and the Underwriters. Very truly yours, TELE-COMMUNICATIONS, INC. By:__________________________ Name: Title: Confirmed as of the date first above mentioned By: __________________________________ Name: Title: -20- Annex I TELE-COMMUNICATIONS, INC. PRICING AGREEMENT ___________ ___, 19___ Dear Sirs: Tele-Communications, Inc., a Delaware corporation (the "Company"), proposes, subject to terms and conditions stated herein and in the Underwriting Agreement dated ___________, 19__ (the "Underwriting Agreement"), to issue and sell to each Underwriter named in Exhibit A hereto (each an "Underwriter") certain securities (the "Offered Securities") described in Exhibit B hereto. Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to a part of this Pricing Agreement to the same extent as if such provisions had been set forth in full herein. Each of the representations and warranties set forth in the Underwriting Agreement shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty with respect to the Prospectus shall be deemed to be a representation and warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Offered Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Terms not otherwise defined herein shall have the meanings ascribed to them in the Underwriting Agreement. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Offered Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. Subject to the terms and conditions set forth herein and the Underwriting Agreement incorporated herein by reference, the Company agrees to sell to each Underwriter, and each Underwriter agrees to purchase from the Company, at a purchase price to each Underwriter set forth in Exhibit A hereto, the number of Firm Securities set forth opposite the name of such Underwriter in Exhibit A hereto. If and to the extent that the Representatives exercise the election to purchase Optional Securities as provided below, the Company agrees to sell to each Underwriter, and each Underwriter agrees to purchase from the Company at the purchase price to each Underwriter set forth in Exhibit A hereto, that portion of the number of Optional Securities as to which such election has been exercised. -1- The Company hereby grants to each Underwriter, subject to the terms set forth herein and in the Underwriting Agreement, the right to purchase at its election up to the number of Optional Securities set forth opposite the name of such Underwriter in Exhibit A hereto on the terms referred to in the paragraph above for the sole purpose of covering over-allotments in the sale of the Firm Securities. [Each Underwriter (i) has not offered or sold, and will not offer or sell, in the United Kingdom, by means of any document, any Offered Securities other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent (except under circumstances which do not constitute an offer to the public within the meaning of the Companies Act 1985); (ii) has complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Offered Securities in, from or otherwise involving the United Kingdom; and (iii) has only issued or passed on, and will only issue and pass on to any person in the United Kingdom, any document received by it in conjunction with the issue of the Offered Securities if that person is of a kind described in Article 9(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1988 or is a person to whom the document may otherwise lawfully be issued or passed on.] Delivery and payment for the Firm Securities shall be made at 10:00 a.m. New York time on , (the "Closing Date") at the offices of Baker & Botts, L.L.P., 599 Lexington Avenue, New York, New York 10022. The Closing Date and the place of delivery of and payment for the Firm Securities may be varied by agreement between the Representatives and the Company. Any election to purchase Optional Securities may be exercised by written notice from the Representatives to the Company given within a period of 30 days after the date of this Agreement, setting forth an aggregate number of Optional Securities to be purchased, the number of Optional Securities to be purchased by each Underwriter, and the date on which such Optional Securities are to be delivered as determined by the Representatives, but in no event earlier than the Closing Date. If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, and upon acceptance hereof by you, this Pricing Agreement, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between the Underwriter and the Company. Very truly yours, Tele-Communications, Inc. By: ________________________________ Name: Title: -2- Confirmed as of the date first above mentioned By:____________________________ Name: Title: -3- Exhibit A [Names of Underwriters, Number of Offered Securities and Purchase Price] Exhibit B [Terms of Offered Securities] EX-1.2 3 FORM OF UNDERWRITING AGREEMENT FOR DEBT SECURITIES EXHIBIT 1.2 TELE-COMMUNICATIONS, INC. UNDERWRITING AGREEMENT FOR DEBT SECURITIES __________ ___, 19__ [To the Underwriter(s) or Representative(s) of Underwriters] Dear Sirs: Tele-Communications, Inc., a Delaware corporation (the "Company"), proposes to issue and sell principal amount of its [ ] (the "Offered Securities") pursuant to an indenture dated as of , ([as amended and] as the same may be [further] amended or supplemented, the "Indenture"), with , as trustee (the "Trustee"). Each Offered Security will be issuable in the denominations and shall have the terms set forth in Exhibit A. [The term "Underwriters" as used herein will mean and refer collectively to one or more several Underwriters named in Exhibit B (and any substitute underwriter pursuant to Section 9 hereof), the term "Underwriter" will refer to any of the several Underwriters named in Exhibit B (and any substitute underwriter pursuant to Section 9 hereof), and the term "Representatives" will refer to you in your capacity as the Representatives of the several Underwriters or, in the event no Representatives shall have been appointed, in your capacity as Underwriters. Any reference to you in this Agreement shall be solely in your capacity as Representatives.] The Company confirms as follows its agreement with you and the Underwriter[s]. 1. Registration Statement and Prospectus: The Company has filed with the Securities and Exchange Commission (the "Commission"), in accordance with the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (collectively called the "Act"), a shelf registration statement on Form S-3 (File No. ), including a prospectus, relating to, among other securities, debt securities of the Company ("Debt Securities") issuable from time to time in one or more series, [including the Offered Securities] and shares of Series A TCI Group Common Stock, $1.00 par value per share, of the Company ("Common Stock") issuable from time to time upon conversion of convertible Debt Securities, [including the shares (the "Common Shares") issuable upon conversion of the Offered Securities,] which has become effective under the Act, and will promptly file with the Commission a prospectus supplement specifically relating to the Offered Securities pursuant to Rule 424 under the Act. As used in this Agreement, the term "Registration Statement" means such shelf registration statement, including exhibits and financial statements and schedules and documents incorporated by reference therein, as amended or supplemented to the date hereof and, in the case of references to the Registration Statement as of a date subsequent to the date hereof, as amended or supplemented as of such date. The term "Basic Prospectus" means the prospectus, dated ____________, _____, as filed with the Commission pursuant to Rule 424 under the Act and forming part of the Registration Statement. The term "Prospectus" means the Basic Prospectus together with the prospectus supplement specifically relating to the Offered Securities as filed with the Commission pursuant to Rule 424 under the Act and any information deemed to be a part thereof pursuant to Rule 434 under the Act. The term "preliminary prospectus" means any preliminary prospectus supplement specifically relating to the Offered Securities together with the Basic Prospectus. Any reference herein to any preliminary prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such preliminary prospectus or the Prospectus, as the case may be, and any reference herein to any amendment or supplement to any preliminary prospectus or the Prospectus, except the reference in Section 4(c), shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and so incorporated by reference. 2. Agreements to Sell and Purchase: The Company agrees to sell to the Underwriters, and upon the basis of the representations, warranties and agreements of the Company herein contained and subject to the terms and conditions of this Agreement each of the Underwriters agrees to purchase from the Company, severally and not jointly, the principal amount of Offered Securities set forth opposite each Underwriter's respective name in Exhibit B, at a purchase price per Offered Security of $ , plus accrued [interest][original issued discount] from . With respect to any of the Offered Securities purchased by you hereunder that you continue to own or hold at any time on or after the 90th day following the Closing Date (as defined in Section 3), you agree that upon receipt of written notice from the Company of its intention to bid for or purchase any Offered Security or any security of the same class and series as the Offered Securities or to take any other action, directly or indirectly, the taking of which would be proscribed by Regulation M promulgated by the Commission under the Exchange Act (or any successor or equivalent rule or regulation) during the distribution of the Offered Securities, you will, and will cause your "affiliated purchasers" (as defined in Rule 100 of said Regulation) to, cease distributing the Offered Securities for such period of time as the Company may deem necessary so that the action or actions proposed to be taken, directly or indirectly, by it may be taken in full compliance with such Regulation (or any successor or equivalent rule or regulation). 3. Delivery and Payment: Delivery of and payment for the Offered Securities shall be made at 10:00 a.m., New York time, on ______________, 19__ (such time and date are referred to herein as the "Closing Date"), at the offices of Baker & Botts, L.L.P., 599 Lexington Avenue, New York, New York. The Closing Date and the place of delivery of and payment for the Offered Securities may be varied by agreement between you and the Company. Delivery of the Offered Securities (in definitive form and registered in such names and in such authorized denominations as you shall request at least 48 hours prior to the Closing Date by written notice to the Company) shall be made to you against payment by you of the purchase price 2 therefor by cashier or official bank check or checks payable to the order of the Company or by wire transfer to an account specified by the Company of same day federal funds. For the purpose of expediting the checking and packaging of the Offered Securities, the Company agrees to make the Offered Securities available to you for inspection at least 24 hours prior to the Closing Date or such shorter period of time as you may agree to. 4. Agreements of the Company: The Company agrees with you as follows: (a) The Company will notify you promptly, and (if requested by you in writing) will confirm such advice in writing, during the period of the distribution of the Offered Securities (1) of the effectiveness of any amendment to the Registration Statement and of the filing of any supplement to the Prospectus, (2) of any comments of the Commission regarding the Registration Statement or the Prospectus (or any of the documents incorporated by reference therein) or of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (3) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceedings for that purpose, (4) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities [or the Common Shares] for offer or sale in any jurisdiction or the initiation or threatening of any proceedings for such purpose and (5) of the happening of any event during the period mentioned in paragraph (d) below which makes any statement of a material fact made in the Registration Statement or the Prospectus (as theretofore amended or supplemented) untrue or which requires the making of any changes in the Registration Statement or the Prospectus (as theretofore amended or supplemented) in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading. The Company will use its reasonable best efforts to prevent the issuance of any order suspending the effectiveness of the Registration Statement or suspending the qualification of the Offered Securities [or the Common Shares] for offer or sale in any jurisdiction, and if any such order is issued, the Company will make every reasonable effort to obtain the withdrawal of such order at the earliest possible moment. (b) The Company will furnish to each of you, without charge, one conformed copy of the Registration Statement and any post-effective amendment thereto filed in connection with the offering of the Offered Securities, including all financial statements and schedules, exhibits and documents incorporated therein by reference (including exhibits incorporated therein by reference to the extent not previously furnished to you). (c) The Company will give you advance notice of its intention to file any amendment or supplement to the Registration Statement or the Prospectus with respect to the Offered Securities, and will not file any such amendment or supplement to which you shall reasonably object in writing. 3 (d) During the period of time that the Prospectus is required by law to be delivered, the Company will deliver to each Underwriter, without charge, as many copies of the Prospectus or any amendment or supplement thereto as such Underwriter may reasonably request. The Company consents to the use of the Prospectus or any amendment or supplement thereto by the Underwriters and by all dealers to whom the Offered Securities may be sold, both in connection with the offering or sale of the Offered Securities and for such period of time thereafter as the Prospectus is required by law to be delivered in connection therewith. If during such period of time any event shall occur which in the judgment of the Company should be set forth (or incorporated by reference) in the Prospectus in order to make the statements therein, in light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to supplement or amend the Prospectus to comply with law, the Company will forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and forthwith file all reports and any definitive proxy statement or information statement required to be filed by the Company with the Commission pursuant to Section 13 or 14 of the Exchange Act subsequent to the date of the Prospectus and during such period, and will deliver to each Underwriter, without charge, such number of copies thereof as such Underwriter may reasonably request. If during such period of time any event shall occur which in your judgment should be so set forth (or incorporated by reference) in the Prospectus, or which in your judgment makes it necessary to so supplement or amend the Prospectus, the Company will consult with you concerning the necessity of filing with the Commission a supplement or an amendment to the Prospectus or a report pursuant to Section 13 or 14 of the Exchange Act. (e) Prior to any public offering of the Offered Securities by the Underwriters, the Company will cooperate with you and your counsel in connection with the registration or qualification of the Offered Securities [and the Common Shares] for offer and sale under the securities or Blue Sky laws of, and the determination of the eligibility of the Offered Securities for investment under the laws of, such jurisdictions as you request; provided, that in no event shall the Company be obligated to qualify to do business as a foreign corporation or as a securities dealer in any jurisdiction where it is not now so qualified, to conform its capitalization or the composition of its assets to the securities or Blue Sky laws of any jurisdiction or to take any action which would subject it to taxation or general service of process in any jurisdiction where it is not now so subject. The Company will pay all reasonable fees and expenses (including reasonable counsel fees and expenses) relating to qualification of the Offered Securities [and the Common Shares] under such securities or Blue Sky laws and in connection with the determination of the eligibility of the Offered Securities for investment under the laws of such jurisdictions as you may designate. (f) The Company will make generally available to its security holders and to you consolidated earnings statements (which need not be audited) that satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder. 4 (g) The Company will pay all expenses in connection with (1) the preparation, printing and filing of the Registration Statement, any preliminary prospectus, the Prospectus, any legal investment memorandum and Blue Sky memorandum as contemplated by Section 4(e), (2) the preparation, issuance and delivery of the Offered Securities (other than transfer taxes) and the execution and delivery of the Indenture, (3) the printing of any dealer agreement, (4) furnishing such copies of the Registration Statement, the Prospectus and any preliminary prospectus, and all amendments and supplements thereto, including any term sheets delivered by the Company pursuant to Rule 434 under the Act, as may be requested for use in connection with the offering and sale of the Offered Securities by dealers to whom Offered Securities may be sold, and (5) any fees paid to rating agencies, if any, selected by the Company in connection with the rating of the Offered Securities. (h) If this Agreement is terminated by you because any condition to the obligations of the Underwriters set forth in Section 7 hereof is not satisfied or because of any failure or refusal on the part of the Company to comply with the terms hereof or if for any reason the Company shall be unable to perform its obligations hereunder, the Company will reimburse the Underwriter[s] for all out-of-pocket expenses (including the fees and expenses of your counsel) reasonably incurred by the Underwriter[s] in connection herewith. The Company will not in any event be liable to you [or any of the Underwriters] for damages on account of loss of anticipated profits. (i) From the date hereof to and including the Closing Date, the Company will not offer or sell, or contract to sell, any Debt Securities of the Company with a maturity of more than one year, including additional Offered Securities, pursuant to a public offering without your prior written consent. 5. Representations and Warranties of the Company: The Company represents and warrants to each Underwriter that: (a) the documents incorporated by reference in the Registration Statement and the Prospectus, when they were filed (or, if an amendment with respect to any such document was filed, when such amendment was filed) with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and any further documents so filed and incorporated by reference during the period of the distribution of the Offered Securities will, when they are filed with the Commission, conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, none of such documents, when it was filed (or, if an amendment with respect to any such document was filed, when such amendment was filed), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and no such further document, when it is filed, will contain an untrue statement of a material fact or will omit to state a material fact required to be stated therein or 5 necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; (b) the Registration Statement, when declared effective by the Commission, complied in all material respects with the requirements of the Act; each preliminary prospectus, if any, relating to the Offered Securities, filed pursuant to Rule 424 or Rule 434 under the Act, will comply when so filed in all material respects with the Act; and when the Prospectus or any term sheet is first filed with the Commission pursuant to Rule 424 or Rule 434 and as of the Closing Date, the Registration Statement and the Prospectus (as amended or supplemented, if applicable) will comply in all material respects with the requirements of the Act and the Indenture will comply in all material respects with the requirements of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). When it was declared effective by the Commission, the Registration Statement did not, and as of the date the Prospectus is first filed with the Commission pursuant to Rule 424 or Rule 434 and as of the Closing Date the Registration Statement (as amended or supplemented, if applicable) will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. When the Prospectus is first filed with the Commission pursuant to Rule 424 or Rule 434 and as of the Closing Date, the Prospectus (as amended or supplemented, if applicable) will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, this representation and warranty does not apply to statements or omissions in the Registration Statement or the Prospectus or any preliminary prospectus made in reliance upon information furnished to the Company in writing by any Underwriter [through you] expressly for use therein or to that part of the Registration Statement which consists of the Statements of Eligibility on Form T-1 under the Trust Indenture Act of the trustees for the Debt Securities; (c) the Offered Securities [,the Common Stock] and the Indenture have been duly authorized by the Company and each will conform to the descriptions thereof in the Prospectus; (d) the issuance and sale of the Offered Securities [, the delivery of the Common Stock] and the fulfillment of the terms of this Agreement will not result in a breach of any of the terms or provisions of, or constitute a default under, the Company's charter or by-laws or any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company or any of its significant subsidiaries (as such term is defined in Rule 1.02(w) of Regulation S-X) is now a party or by which it is bound, or any order of any court or governmental agency or authority entered in any proceeding to which the Company or any of its significant subsidiaries was or is now a party or by which it is bound; (e) KPMG Peat Marwick LLP, the Company's auditors, are independent accountants as required by the Act; 6 (f) so long as may be required for the distribution of the Offered Securities by the Underwriters or by any dealers that participate in the distribution thereof, the Company will comply with all requirements under the Exchange Act relating to the timely filing with the Commission of its reports pursuant to Section 13 of the Exchange Act and of its proxy statements pursuant to Section 14 of the Exchange Act; [and] (g) except to the extent set forth in the Prospectus, the Company has not received any notice of, nor does it have any actual knowledge of, any failure by it or any of its significant subsidiaries to be in substantial compliance with all existing statutes and regulations applicable to it or such subsidiaries, which failure would materially and adversely affect the conduct of the business of the Company and its subsidiaries, considered as a whole[; and] [(h) the Company has reserved a sufficient number of Common Shares to cover the conversion of all the Offered Securities at the initial conversion [price][rate] (prior to any adjustment of such [price][rate] pursuant to the Offered Securities and the Indenture); the Common Shares when issued or delivered upon conversion of the Offered Securities will be duly and validly authorized, issued, fully paid and non-assessable; and the Common Shares are free of preemptive rights]. 6. Indemnification: The Company agrees to indemnify and hold harmless each Underwriter, and each person, if any, who controls each Underwriter within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any such untrue statement or omission or allegation thereof based upon information furnished in writing to the Company by any Underwriter [through you] expressly for use therein; provided, however, the Company shall not indemnify any Underwriter or any person who controls such Underwriter from any such losses, claims, damages or liabilities alleged by any person who purchased Offered Securities from such Underwriter if the untrue statement, omission or allegation thereof upon which such losses, claims, damages or liabilities are based was made in: (i) any preliminary prospectus, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person at or prior to the written confirmation of the sale of Offered Securities to such person, and if the Prospectus (as so amended or supplemented) corrected the untrue statement or omission giving rise to such loss, claim, damage or liability; (ii any Prospectus used by such Underwriter or any person who controls such Underwriter, after such time as the Company advised you that the filing of a post-effective amendment or supplement thereto was required, except the Prospectus as so amended or 7 supplemented; or (iii) any Prospectus used after such time as the obligation of the Company to keep the same current and effective has expired. This indemnity will be in addition to any liability which the Company may otherwise have. If any action or proceeding (including any governmental investigation) shall be brought or asserted against any Underwriter or any person controlling an Underwriter in respect of which indemnity may be sought from the Company, such Underwriter or such controlling person shall promptly notify the Company in writing, and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory to you and the payment of all expenses. Any omission so to notify the Company shall not, however, relieve the Company from any liability which it may have to any indemnified party otherwise than under this Section 6. Any such Underwriter or any such person controlling an Underwriter shall have the right to employ separate counsel in any such action or proceeding and to participate in the defense thereof, but the fees and expenses of such separate counsel shall be such Underwriter's expense or the expense of such controlling person unless (a) the Company has agreed to pay such fees and expenses or (b) the Company shall have failed to assume the defense of such action or proceeding and employ counsel reasonably satisfactory to you in any such action or proceeding or (c) the named parties to any such action or proceeding (including any impleaded parties) include both such Underwriter or such controlling person and the Company, and you shall have been advised by your counsel that there may be a conflict of interest between such Underwriter or controlling person and the Company in the conduct of the defense of such action (in which case, if such Underwriter or such controlling person notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense of such action or proceeding on behalf of such Underwriter or such controlling person), it being understood, however, that the Company shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (unless the members of such firm are not admitted to practice in a jurisdiction where an action is pending, in which case the Company shall pay the reasonable fees and expenses of one additional firm of attorneys to act as local counsel in such jurisdiction, provided the services of such counsel are substantially limited to that of appearing as attorneys of record) at any time for all indemnified parties, which firm shall be designated in writing by you. The Company shall not be liable for any settlement of any such action or proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the Company agrees to indemnify and hold harmless each Underwriter and any such controlling person from and against any loss or liability by reason of such settlement or judgment. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors and each of its officers, and each person, if any, who controls the Company within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with respect to information furnished in writing by such Underwriter expressly for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any preliminary prospectus. In case any action or 8 proceeding shall be brought against the Company or its directors or officers or any such controlling person, in respect of which indemnity may be sought against one or more of the several Underwriters, such Underwriters acting through the Representatives shall have the rights and duties given to the Company, and the Company or its directors or officers or such controlling person shall have the rights and duties given to you and the several Underwriters, by the preceding paragraph. If the indemnification provided for in this Section 6 is unavailable to an indemnified party under the first or third paragraph hereof in respect of any losses, claims, damages or liabilities referred to therein (other than by reason of such indemnified party's failure to comply with the first sentence of the second paragraph of this Section 6), then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other in connection with the Offering of the Offered Securities shall be deemed to be in the same proportion as the total net proceeds from the offering of the Offered Securities received by the Company bear to the total underwriting discounts received by the Underwriters in respect thereof. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters through you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of this Section 6, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company and each Underwriter agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 6, the Underwriters shall not be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities were offered to the public exceeds the amount of any damages which the Underwriters have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 9 The indemnity and contribution agreements contained in this Section 6 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (a) any investigation made by or on behalf of the Underwriters, by or on behalf of any person controlling any Underwriter or by or on behalf of the Company, (b) acceptance of any of the Offered Securities and payment therefor or (c) any termination of this Agreement. 7. Conditions of the Underwriters' Obligations: The Underwriters' obligations hereunder are subject to the following conditions: (a) at the Closing Date, [(i)] no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall be pending or threatened by the Commission; and you shall have received a certificate, dated the Closing Date and signed by the Chairman of the Board, the President, an Executive Vice President or a Senior Vice President of the Company (who may, as to threatened proceedings, rely upon the best of his information and belief), to that effect and to the effect set forth in clause (e) of this Section 7 [(with respect to Senior Debt Securities only), and (ii) the rating assigned by a nationally recognized securities rating agency in the United States to the senior debt securities of the Company as of the date of this Agreement shall not have been lowered since that date]; (b) you shall have received opinions, dated the Closing Date and reasonably satisfactory to counsel retained for the Underwriters, (A) from Messrs. Cole, Raywid & Braverman, L.L.P. or such other special communications counsel for the Company as may be reasonably satisfactory to you, (B) from the General Counsel of the Company to the following effect and covering such additional matters as the Representatives may reasonably request: (i) the Company and each of its significant subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to carry on its business as described in the Prospectus (as amended or supplemented, if applicable) and the Company has the corporate power and authority to execute and deliver and perform its obligations under this Agreement and to issue and sell the Offered Securities as contemplated by this Agreement; (ii) the Company and each of its significant subsidiaries is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which the failure to so qualify would, in the aggregate, have a material adverse effect upon the financial condition, results of operations, business or properties of the Company and its subsidiaries taken as a whole; 10 (iii) all corporate proceedings legally required in connection with the authorization and issuance of the Offered Securities and the sale of the Offered Securities by the Company in accordance with the terms of this Agreement have been taken; (iv) to the best knowledge of such counsel, there is no legal or governmental proceeding pending or threatened against the Company or any of its subsidiaries which is required to be disclosed in the Prospectus (as amended or supplemented, if applicable) and is not so disclosed and correctly summarized therein; (v) to the best knowledge of such counsel, there is no contract or other document known to such counsel of a character required to be described in the Prospectus (as amended or supplemented, if applicable) or to be filed as an exhibit to the Registration Statement (or to a document incorporated by reference therein) that is not described or filed as required; (vii) the execution and delivery of this Agreement and the Indenture, the issuance of the Offered Securities and the fulfillment of the terms herein and therein contained do not conflict with, or result in a breach of, or constitute a default under, the charter or by-laws of the Company or, to the best knowledge of such counsel, conflict in any material respect with, or result in a material breach of or constitute a material default under any material agreement, indenture or other instrument known to such counsel to which the Company or any of its significant subsidiaries is a party or by which it is bound, or result in a violation of any law, administrative regulation or court or governmental decree known to such counsel applicable to the Company or any of its subsidiaries, except that such counsel need not express any opinion with respect to (i) matters opined upon by special communications counsel and Messrs. Sherman & Howard LLC or (ii) the federal securities laws or the Blue Sky or securities laws of any jurisdiction; [and] (vii) to the best knowledge of such counsel, neither the Registration Statement nor the Prospectus, as amended or supplemented, if applicable (except as to the financial statements and schedules and any other financial and statistical data contained and incorporated by reference in the Registration Statement or Prospectus, as to which no opinion need be expressed), contained, as of the date the Prospectus was first filed with the Commission pursuant to Rule 424, or contains, as of the Closing Date, any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus (as amended or supplemented, if applicable), in light of the circumstances under which they were made,) not misleading[; and 11 (viii) The Company has reserved a sufficient number of the Common Shares to cover the conversion of all the Offered Securities at the initial conversion [price] [rate] (prior to any adjustment of such [price] [rate] pursuant to the Offered Securities and the Indenture), and such Common Shares, when so delivered upon such conversion in accordance with the terms and provisions of the Offered Securities and the Indenture, assuming no change in the applicable law or pertinent facts, will be duly and validly authorized, issued, fully paid and non-assessable]. (C) from Messrs. Sherman & Howard LLC, special counsel to the Company, to the following effect and covering such additional matters as you may reasonably request: (i) the execution and delivery of this Agreement and the Indenture, the issuance of the Offered Securities and the fulfillment of the terms herein and therein contained do not, to the best knowledge of such counsel, result in a material breach of or constitute a material default under any material agreement for borrowed money known to such counsel to which the Company or any of its significant subsidiaries is a party or by which it is bound; and (ii) the Company is not an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and is not subject to regulation under such Act. and (D) from Baker & Botts, L.L.P., special counsel to the Company, or such other counsel to the Company as may be reasonably satisfactory to you, to the following effect and covering such additional matters as you may reasonably request: (i) this Agreement and the Indenture have been duly authorized, executed and delivered by the Company; and the Indenture is a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except (A) as such enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws affecting creditors' rights generally, and (B) that the remedy of specific performance and injunctive and other forms of equitable relief are subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought; (ii) the Indenture has been duly qualified under, and complies in all material respects with the requirements of, the Trust Indenture Act; (iii) the Offered Securities, when executed and authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Underwriters in accordance with this Agreement, will be legal, valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable in accordance with their terms, except (A) as such enforceability may be limited by bankruptcy, 12 insolvency, reorganization, fraudulent conveyance, moratorium and other laws affecting creditors' rights generally, and (B) that the remedy of specific performance and injunctive and other forms of equitable relief are subject to certain equitable defenses and to the discretion of the court before which any proceeding therefor may be brought; (iv) the Registration Statement is effective under the Act and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose is pending or threatened by the Commission; and (v) the Offered Securities[, the Common Stock] and the Indenture conform in all material respects as to legal matters to the descriptions thereof in the Prospectus. In addition, such counsel shall state that: "The Registration Statement and the Prospectus, as amended or supplemented, if applicable (except as to (x) the financial statements and schedules and any other financial and statistical data contained or incorporated by reference therein and (y) the documents incorporated or deemed to be incorporated by reference therein, as to which no opinion is expressed), complied, as of the date the Prospectus was first filed with the Commission pursuant to Rule 424, and comply, as of the date hereof, as to form in all material respects with the requirements of the Act and the rules and regulations of the Commission under the Act (the "Rules"). In passing upon the form of such documents, we have necessarily assumed the correctness and completeness of the statements made or included therein by the Company and take no responsibility for the accuracy, completeness or fairness of the statements contained therein except insofar as such statements relate to the description of the Offered Securities [, the Common Stock] and the Indenture or relate to us. However, in connection with the preparation of the Registration Statement and the Prospectus, we had conferences with certain officers and other representatives of the Company, and our examination of the Registration Statement and the Prospectus and our discussions in such conferences did not disclose to us any information (relying as to the materiality of any such information primarily upon officers and other representatives of the Company) which gave us reason to believe that either the Registration Statement or the Prospectus, as amended or supplemented, if applicable (except as to (x) the financial statements and schedules and any other financial and statistical data contained or incorporated by reference in the Registration Statement or the Prospectus and (y) the documents incorporated or deemed to be incorporated by reference therein, as to which no opinion is expressed), contained, as of the date the Prospectus was first filed with the Commission pursuant to Rule 424, or contains, as of the date hereof, any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, as amended 13 or supplemented, if applicable, in light of the circumstances under which they were made,) not misleading." In giving such opinions, such counsel may rely (x) as to matters of fact, to the extent they deem proper, upon certificates of officers of the Company, public officials and others, and (y) as to matters of law if other than the United States or Colorado (in the case of Messrs. Sherman & Howard LLC and General Counsel of the Company) or New York (in the case of Baker & Botts, L.L.P.), on the opinions of local counsel retained by them or the Company, provided that such counsel are satisfactory to you and counsel for the Underwriters; (c) you shall have received on the Closing Date from counsel retained by you on behalf of the Underwriters an opinion to the effect set forth in clauses (b)(D)(i) and (iii) and to the effect that the Registration Statement and the Prospectus, as amended or supplemented, if applicable, (except as to (x) the financial statements and schedules and any other financial and statistical data contained or incorporated by reference therein, and (y) the documents incorporated or deemed to be incorporated by reference therein, as to which no opinion need be expressed) comply as to form in all material respects with the Act. In addition, you shall have received on the Closing Date from such counsel an opinion with respect to the Registration Statement and the Prospectus in the form customarily given by such firm; (d) on the Closing Date you shall have received a letter addressed to the Representatives from KPMG Peat Marwick LLP, independent auditors for the Company, reasonably satisfactory to you; and (e) the representations and warranties of the Company in this Agreement shall be true and correct on and as of the Closing Date; the Company shall have complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Date; and except as reflected in or contemplated by the Registration Statement and the Prospectus, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there shall not have been, at the Closing Date, any material adverse changes in the condition (financial or otherwise), business, prospects or results of operations of the Company and its subsidiaries, considered as a whole; and (f) subsequent to the date of this Agreement, there shall not have occurred any change, or any development involving a prospective change, in or affecting particularly the business, prospects or financial affairs of the Company and its subsidiaries, considered as a whole which, in your reasonable judgment, is so material and adverse that it would be impracticable to proceed with the public offering or delivery of the Offered Securities on the terms and in the manner contemplated by the Prospectus. 14 8. Termination of Agreement: The obligation of the Underwriters to purchase the Offered Securities may be terminated at any time prior to the Closing Date by notice to the Company from you, without liability on the part of the Underwriters to the Company, if, on or prior to such date, (i) additional material governmental restrictions, not in force and effect on the date of this Agreement, shall have been imposed upon trading in securities generally or minimum or maximum prices shall have been generally established on the New York Stock Exchange or on the American Stock Exchange, or trading in securities generally shall have been suspended on either such Exchange or trading in the common stock or debt securities of the Company in the over-the-counter market shall have been suspended or a general banking moratorium shall have been established by Federal or New York authorities, or (ii) a war involving the United States of America or other national calamity shall have occurred or shall have accelerated to such an extent as to affect adversely the marketability of the Offered Securities. [9. Default by One or More of the Underwriters: If one or more of the Underwriters shall fail on the Closing Date to purchase the Offered Securities that it or they are obligated to purchase hereunder (the "Defaulted Securities"), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any substitute underwriter, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be approved by you and upon the terms herein set forth; if however, you have not completed such arrangements within such 24-hour period, then: (a) if the principal amount of Defaulted Securities does not exceed 10% of the aggregate principal amount of Offered Securities, the non- defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the principal amount of Defaulted Securities exceeds 10% of the aggregate principal amount of Offered Securities, the Company shall be entitled for an additional 24-hour period to find one or more substitute underwriters satisfactory to the Representatives in their reasonable discretion to purchase such Defaulted Securities. In the event of any such default either the Representatives or the Company shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements relating to the purchase of the Offered Securities. If the principal amount of Defaulted Securities exceeds 10% of the aggregate principal amount of Offered Securities, and neither the Representatives nor the Company make arrangements pursuant to this Section 9 within the period stated for the purchase of the Defaulted Securities, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter to the Company except as provided in Section 6. 15 No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default. A substitute underwriter hereunder shall be an Underwriter for all purposes of this Agreement.] [9.][10.]Miscellaneous: Notice given pursuant to any of the provisions of this Agreement shall be in writing and shall be mailed or delivered (a) to the Company at its principal executive offices, located at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000, Attention: Chief Financial Officer, or (b) to you at ____________, attention of: . Any notice under Section 8 hereof may be made by facsimile transmission or telephone, but if so made shall be subsequently confirmed in writing. This Agreement has been and is made solely for the benefit of the Underwriters and the Company and of the controlling persons, directors and officers referred to in Section 6 hereof, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" as used in this Agreement shall not include a purchaser, as such purchaser, of Offered Securities from any Underwriter. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 16 Please confirm that the foregoing correctly sets forth the agreement between the Company and the Underwriters. Very truly yours, TELE-COMMUNICATIONS, INC. By:___________________________ Name: Title: Confirmed and Accepted, as of the date first above written: By:___________________________________ Name: Title: 17 EXHIBIT A DEBT SECURITIES Designation: Issue Date: Maturity [and provisions for extension, if any]: Authorized Denominations: [Interest rate (or method of computation), Interest Payment Dates and Record Dates or, if Original Discount Securities, issue price and yield to maturity:] [Sinking Fund:] [Optional Redemption:] [Provisions for purchase or exchange at option of the Holder or the Company:] [Conversion price or conversion rate, conversion period and other terms of conversion:] [Exchange price or exchange rate, exchange period and other terms of exchange:] [Other specific terms:] EXHIBIT B Principal Amount Underwriters of Offered Securities - ------------ --------------------- EX-4.1 4 FORM OF SENIOR INDENTURE EXHIBIT 4.1 ================================================================================ TELE-COMMUNICATIONS, INC. and Trustee ______________ Indenture Dated as of ______________ Debt Securities ================================================================================ CROSS-REFERENCE TABLE
TIA INDENTURE SECTION SECTION(S) 310 (a)(1)............................................. 7.10 (a)(2)............................................. 7.10 (a)(3)............................................. N.A. (a)(4)............................................. N.A. (a)(5)............................................. 7.10 (b)................................................ 7.08; 7.10; 10.02 (c)................................................ N.A. 311 (a)................................................ 7.11 (b)................................................ 7.11 (c)................................................ N.A. 312 (a)................................................ 2.07 (b)................................................ 10.03 (c)................................................ 10.03 313 (a)................................................ 7.06 (b)(1)............................................. N.A. (b)(2)............................................. 7.06 (c)................................................ 10.02 (d)................................................ 7.06 314 (a)................................................ 4.05; 4.06; 10.02 (b)................................................ N.A. (c)(1)............................................. 10.04 (c)(2)............................................. 10.04 (c)(3)............................................. N.A. (d)................................................ N.A. (e)................................................ 10.05 (f)................................................ N.A. 315 (a)................................................ 7.01(b) (b)................................................ 7.05; 10.02 (c)................................................ 7.01(a) (d)................................................ 7.01(c) (e)................................................ 6.11 316 (a)(last sentence)................................. 10.06 (a)(1)(A).......................................... 6.05 (a)(1)(B).......................................... 6.04 (a)(2)............................................. N.A. (b)................................................ 6.07
i 317 (a)(1)............................................ 6.08 (a)(2)............................................ 6.09 (b)............................................... 2.06 318 (a)............................................... 10.01
___________ N.A. means not applicable. ii TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions.......................................................... 1 Section 1.02. Other Definitions.................................................... 6 Section 1.03. Incorporation by Reference of Trust Indenture Act.................... 6 Section 1.04. Rules of Construction................................................ 7 ARTICLE II THE SECURITIES Section 2.01. Forms Generally...................................................... 7 Section 2.02. Amount Unlimited; Issuable in Series................................. 8 Section 2.03. Denominations........................................................ 12 Section 2.04. Execution, Authentication, Delivery and Dating....................... 13 Section 2.05. Registrar, Paying Agent, Conversion Agent and Authenticating Agent... 16 Section 2.06. Paying Agent to Hold Money and Securities in Trust................... 18 Section 2.07. Securityholder Lists................................................. 18 Section 2.08. Transfer and Exchange................................................ 18 Section 2.09. Replacement Securities............................................... 23 Section 2.10. Securities in Global Form............................................ 24 Section 2.11. Temporary Securities................................................. 25 Section 2.12. Cancellation......................................................... 25 Section 2.13. Payment of Interest; Defaulted Interest.............................. 26 Section 2.14. Persons Deemed Owners................................................ 27 Section 2.15. CUSIP Numbers........................................................ 28 ARTICLE III REDEMPTION Section 3.01. Applicability of Article............................................. 28 Section 3.02. Notices to Trustee................................................... 28 Section 3.03. Selection of Securities to be Redeemed............................... 29 Section 3.04. Notice of Redemption................................................. 30 Section 3.05. Effect of Notice of Redemption....................................... 31 Section 3.06. Deposit of Redemption Price.......................................... 32 Section 3.07. Securities Redeemed in Part.......................................... 32 Section 3.08. Conversion or Exchange Arrangement on Call for Redemption............ 32
iii ARTICLE IV COVENANTS Section 4.01. Payment of Securities; Maintenance of Office or Agency................. 33 Section 4.02. SEC Reports............................................................ 35 Section 4.03. Compliance Certificate................................................. 35 Section 4.04. Corporate Existence.................................................... 36 Section 4.05. Waiver of Certain Covenants............................................ 36 Section 4.06. No Lien Created........................................................ 36 Section 4.07. Calculation of Original Issue Discount................................. 36 ARTICLE V SUCCESSOR CORPORATION Section 5.01. When Company May Merge, etc............................................ 37 ARTICLE VI DEFAULTS AND REMEDIES Section 6.02. Acceleration........................................................... 38 Section 6.03. Other Remedies......................................................... 39 Section 6.04. Waiver of Existing Defaults............................................ 39 Section 6.05. Control by Majority.................................................... 40 Section 6.06. Limitation on Suits.................................................... 40 Section 6.07. Rights of Holders to Receive Payment and to Convert or Exchange........ 40 Section 6.08. Collection Suit by Trustee............................................. 41 Section 6.09. Trustee May File Proofs of Claim....................................... 41 Section 6.10. Priorities............................................................. 41 Section 6.11. Undertaking for Costs.................................................. 41 ARTICLE VII TRUSTEE Section 7.01. Duties of Trustee...................................................... 42 Section 7.02. Rights of Trustee...................................................... 43 Section 7.03. Individual Rights of Trustee........................................... 43 Section 7.04. Trustee's and Authenticating Agent's Disclaimer........................ 44 Section 7.05. Notice of Defaults..................................................... 44 Section 7.06. Reports by Trustee to Holders.......................................... 44 Section 7.07. Compensation and Indemnity............................................. 44
iv Section 7.08. Replacement of Trustee.............................. 45 Section 7.09. Successor Trustee by Merger, etc.................... 46 Section 7.10. Eligibility; Disqualification....................... 46 Section 7.11. Preferential Collection of Claims Against Company... 46 ARTICLE VIII DISCHARGE OF INDENTURE Section 8.02. Application of Trust Fund........................... 48 Section 8.03. Repayment to Company................................ 48 ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS Section 9.01. Without Consent of Holders.......................... 48 Section 9.02. With Consent of Holders............................. 49 Section 9.03. Compliance with Trust Indenture Act................. 51 Section 9.04. Effect of Amendments and Supplements................ 51 Section 9.05. Notation on or Exchange of Securities............... 51 Section 9.06. Trustee to Sign Amendments, etc..................... 51 ARTICLE X MISCELLANEOUS Section 10.02. Notices............................................. 52 Section 10.03. Communication by Holders with Other Holders......... 53 Section 10.04. Certificate and Opinion as to Conditions Precedent.. 54 Section 10.05. Statements Required in Certificate or Opinion....... 54 Section 10.06. When Treasury Securities Disregarded................ 55 Section 10.07. Rules by Trustee and Agents......................... 55 Section 10.08. Legal Holidays...................................... 55 Section 10.09. Governing Law....................................... 55 Section 10.10. No Adverse Interpretation of Other Agreements....... 55 Section 10.11. No Recourse Against Others.......................... 55 Section 10.12. Successors.......................................... 56 Section 10.13. Duplicate Originals................................. 56 Section 10.14. Table of Contents, Headings, etc.................... 56 Section 10.15. Acts of Holders..................................... 56
v ARTICLE XI MEETINGS OF HOLDERS OF SECURITIES Section 11.02. Call, Notice and Place of Meetings..................................... 58 Section 11.03. Persons Entitled to Vote at Meetings................................... 59 Section 11.04. Quorum; Action......................................................... 59 Section 11.05. Determination of Voting Rights; Conduct and Adjournment of Meetings.... 60 Section 11.06. Counting Votes and Recording Action of Meetings........................ 61
vi INDENTURE dated as of between TELE-COMMUNICATIONS, INC., a Delaware corporation ("Company"), and , a ("Trustee"). The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes, bonds or other evidences of indebtedness ("Securities"), to be issued in one or more series as provided in this Indenture. Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the respective Holders from time to time of the Securities or of series thereof: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. Additional Amounts means any additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company in respect of certain taxes imposed on Holders specified therein and which are owing to such Holders. Affiliate of any person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such person. Agent means any Registrar, co-Registrar, Paying Agent, Conversion Agent or Exchange Agent. See Section 2.05. Authenticating Agent means any person authorized by the Trustee pursuant hereto to act on behalf of the Trustee to authenticate Securities of one or more series. Authorized Newspaper means a newspaper, in the English language or in an official language of the place of publication, customarily published on each day that is a Business Day in the place of publication, whether or not published on days that are Legal Holidays in the place of publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements in and each case on any day that is a Business Day in the place of publication. Bearer Security means any Security which is established pursuant to this Indenture which is payable to bearer. Board of Directors means the Board of Directors of the Company or any authorized committee thereof. Business Day, except as may otherwise be provided in the form of Securities of any particular series, means, with respect to any place of payment or other location, each Monday, Tuesday, Wednesday, Thursday and Friday that is not a Legal Holiday in such place of payment or other location. Company means Tele-Communications, Inc., a Delaware corporation, until a successor replaces it pursuant to the applicable provisions of this Indenture and thereafter means the successor. Company Stock means the Tele-Communications, Inc. Common Stock, $1.00 par value, in such series as the same exists on the date of this Indenture or hereafter and any other capital stock into which such Common Stock may thereafter have been changed. coupon means any interest coupon appertaining to a Bearer Security. Debt means, with respect to any person: (1) any indebtedness of such person (i) for borrowed money or (ii) evidenced by a note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any property or assets, including securities; (2) any guarantee by such person of any indebtedness of others described in the preceding clause (1); and (3) any amendment, renewal, extension or refunding of any such indebtedness or guarantee. Default means any event which is, or after notice or passage of time would be, an Event of Default. Dollar or $ or U.S. Dollar means a dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts. Foreign Person shall have the meaning given to such term in Section 1.1441-1(c)(2) of the Treasury Regulations. Government Obligations, with respect to any Security, means (i) direct obligations of the government or governments which issued the currency in which the principal of or any interest on such Security or any Additional Amounts in respect thereof shall be payable, in each case where the payment or payments thereunder are supported by the full faith and credit of such government or governments or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of such government or governments, in each case where the payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by such government or governments, and which, in the case of (i) or (ii), are not callable or redeemable at the option of the issuer or issuers thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of or other amount with respect to any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the 2 holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of or other amount with respect to the Government Obligation evidenced by such depository receipt. Holder or Securityholder means, when used with respect to any Security, in the case of a Registered Security the person in whose name the Security is registered in the security register and in the case of a Bearer Security the bearer thereof and, when used with respect to any coupon, means the bearer thereof. Indenture means this Indenture as amended or supplemented from time to time and, unless the context indicates otherwise, shall include the form and terms of a particular series of Securities established as contemplated hereunder. interest, when used with respect to an Original Issue Discount Security which by its terms bears interest only after maturity or upon default in any other payment due on such Security, means interest payable after maturity or upon such a default, as the case may be. Interest Payment Date means the date, if any, specified in the Securities of any series or a coupon representing an installment of interest as the fixed date on which an installment of interest on the Securities of that series or such coupon is due and payable. Lien means any mortgage, pledge, lien, security interest, or other similar encumbrance. Officer means the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company. Officers' Certificate means a certificate signed by two Officers or by an Officer and an Assistant Treasurer or an Assistant Secretary of the Company and delivered to the Trustee. See Sections 10.04 and 10.05. Opinion of Counsel means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. See Sections 10.04 and 10.05. original issue discount of any debt security, including any Original Issue Discount Security, means the difference between the principal amount of such debt security and the initial issue price of such debt security (as set forth, in the case of an Original Issue Discount Security, on the face of such Security). Original Issue Discount Security means any Security which provides for an amount less than the principal amount thereof to be due and payable upon acceleration of the maturity thereof pursuant to Section 6.02. 3 outstanding, when used with respect to Securities of any series, means as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment, redemption or purchase the Trustee or any Paying Agent (other than the Company) holds in trust or the Company (acting as its own Paying Agent) has set aside and segregated in trust on a maturity date, redemption date, Purchase Date or, if so specified with respect to the Securities of any series pursuant to Section 2.02 on a date (or, if so specified, on the Business Day following a date) on which Securities of such series are to be purchased by the Company pursuant to any provision thereof providing for such purchase at the option of the Holder or the Company, money (or securities if permitted by the terms of such Securities) sufficient to pay Securities and any coupons appertaining thereto payable on that date; (iii) Securities with respect to which the Company has terminated its obligations pursuant to Section 8.01 hereof; provided, however, that such Securities shall continue to be outstanding for all purposes related to those obligations that survive such termination as provided in Section 8.01 unless and until they cease to be outstanding in accordance with clauses (i) or (ii) above or clause (iv) below; and (iv) Securities which have been paid pursuant to Section 2.09 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver or taken any other action hereunder or whether a quorum is present at a meeting of Holders, and for the purpose of making the calculations required by TIA (S) 313, (x) the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02, and (y) the principal amount of a Security denominated in a foreign currency or currencies or composite currency shall be the U.S. Dollar equivalent, determined as of the date of original issuance of such Security, of the principal amount of such Security (or, in the case of an Original Issue Discount Security, the U.S. Dollar equivalent as of such date of original issuance of such Security of the amount determined as provided in clause (x) above). Subject to the provisions of Section 10.06, a Security does not cease to be outstanding because the Company or one of its Affiliates holds the Security. 4 place of payment means, when used with respect to any Security, the place or places where, subject to the provisions of Section 4.01, the principal of, or interest on, or any Additional Amounts with respect to such Security are payable as specified as contemplated by Section 2.02. Predecessor Securities means, with respect to any Security, every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security, and, for the purpose of this definition, any Security authenticated and delivered under Section 2.09 in exchange for or in lieu of a mutilated, lost, destroyed or wrongfully-taken Security or a Security to which a mutilated, lost, destroyed or wrongfully-taken coupon appertains shall be deemed to evidence the same debt as the mutilated, lost, destroyed or wrongfully-taken Security or the Security to which the mutilated, lost, destroyed or wrongfully-taken coupon appertains, as the case may be. principal of a debt security, including any Security, means the amount (including, without limitation, if and to the extent applicable, any premium and, in the case of an Original Issue Discount Security, any accrued original issue discount, but excluding interest) that is payable with respect to such debt security as of any date and for any purpose (including, without limitation, in connection with any sinking fund, upon any redemption at the option of the Company, upon any purchase or exchange at the option of the Company or the holder of such debt security and upon any acceleration of the maturity of such debt security). principal amount of a debt security, including any Security, means the principal amount as set forth on the face of such debt security. Registered Security means any Security issued pursuant to this Indenture which is registered in the security register. Regular Record Date means the date, if any, specified in the Registered Securities of any series as the record date for the determination of Securityholders to whom interest is payable on the next succeeding Interest Payment Date. SEC means the Securities and Exchange Commission. Securities means the Securities that are issued from time to time in one or more series under this Indenture as such Securities are amended or supplemented from time to time. Subsidiary means any corporation, association, partnership or other business entity of which a majority of the total voting power of the capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of a contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) the Company, (ii) the Company and one or more of its Subsidiaries or (iii) one or more Subsidiaries of the Company. TIA means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)77aaa- 77bbbb) as in effect on the date of this Indenture, except as provided in Section 9.03. 5 Trustee means the party named as such in this Indenture until a successor replaces it and thereafter means the successor and if at any time there is more than one such party, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. Trust Officer means any officer or assistant officer in the corporate trust department of the Trustee assigned by the Trustee to administer its corporate trust matters. United States, except as otherwise provided in or pursuant to this Indenture, means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction. Section 1.02. Other Definitions.
TERM DEFINED IN SECTION Act 10.15 Bankruptcy Law 6.01 Code 9.01 Conversion Agent 2.05 Custodian 6.01 Event of Default 6.01 Exchange Agent 2.05 Legal Holiday 10.08 Paying Agent 2.05 Registrar 2.05
Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: Commission means the SEC. indenture securities means the Securities. indenture security holder means a Securityholder. 6 indenture to be qualified means this Indenture. indenture trustee or institutional trustee means the Trustee. obligor on the indenture securities means the Company and any other obligor thereon. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them. Section 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in effect on the date of this Indenture; (3) "or" is not exclusive; and (4) words in the singular include the plural, and in the plural include the singular. ARTICLE II THE SECURITIES Section 2.01. Forms Generally. The Securities of each series may be issued as Registered Securities without coupons attached, or Bearer Securities with or without coupons attached, or both, and may be issued in whole or in part in the form of one or more global Securities as shall be specified as contemplated by Section 2.02. In the absence of any contrary provisions with respect to the Securities of any series, the Securities shall be issued as Registered Securities and shall not be issuable upon the exercise of warrants. Bearer Securities shall be issued with coupons attached unless otherwise provided with respect to the Securities of any series as contemplated by Section 2.02. The Securities of each series (including any temporary global Securities) and related coupons, if any, shall be in one of the forms established from time to time by or pursuant to a resolution of the Board of Directors or in or pursuant to one or more indentures supplemental hereto, which shall set forth the information required by Section 2.02. The Securities and coupons, if any, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or by a resolution of the Board of Directors and may have such notations, legends or endorsements as the Company may deem appropriate and as are not 7 inconsistent with the provisions of this Indenture, or as may be required by law, stock exchange rule or usage. The Company shall approve the form or forms of Securities and any coupons appertaining thereto and any notation, legend or endorsement on them. If the form or forms of Securities of any series or coupons are established by action taken pursuant to a resolution of the Board of Directors or indenture supplemental hereto, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the written order of the Company contemplated by Section 2.04 for the authentication and delivery of such Securities or coupons. Subject to Section 2.05, the form of the Trustee's certificate of authentication to be borne by the Securities shall be substantially as follows: CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. , as Trustee By________________________________ Authorized Signatory Section 2.02. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a resolution of the Board of Directors or established in or pursuant to one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of Securities of the series (which shall distinguish Securities of the series from all other Securities); (2) any limit upon the aggregate principal amount of Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 2.08, 2.09, 2.11, 3.07 or 9.05 and except for any Securities which pursuant to Section 2.04 are deemed not to have been authenticated and delivered hereunder); (3) (A) whether Securities of the series are issuable as Registered Securities, as Bearer Securities or alternatively as Bearer Securities and Registered Securities, and whether the Bearer Securities are to be issuable with coupons, without coupons or both; (B) any restrictions applicable to the offer, sale or delivery of Bearer Securities and the terms upon which Bearer Securities of the series may be exchanged for Registered Securities of the 8 series and vice versa (if permitted by applicable laws and regulations); (C) whether any of the Securities of the series are to be issuable in global form and, if so, (i) the identity of the depositary with respect to any such global Security and (ii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same series and of like tenor and of any authorized form and denomination, and, if so, the circumstances under which and the manner in which any such exchanges may occur, if other than as specified in Section 2.08; (D) if any of the Securities of the series are to be issuable as Bearer Securities or in global form, the date as of which any such Bearer Security or global Security shall be dated (if other than the date of original issuance of the first of such Securities to be issued); and (E) if Securities of the series are to be issuable in definitive form (whether upon original issue, upon exchange of a temporary Security of such series, or in exchange for a beneficial ownership interest in a permanent global Security) only upon receipt of certain certificates or other documents or satisfaction of other conditions, or if Securities of the series are initially issuable in temporary global form and if owners of beneficial interests therein may exchange such interest for an interest in a permanent global Security only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and/or terms of such certificates, documents or conditions; (4) (A) the person to whom any interest on any Registered Security of the series shall be payable, if other than the person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (B) the manner in which, or the person to whom, any interest on any Bearer Security of the series shall be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto as they severally mature; and (C) if any Securities of the series are to be issuable as Bearer Securities, the extent to which, or the manner in which, and the terms and conditions (including certification requirements) upon which, any interest in respect of any portion of a temporary Bearer Security in global form payable in respect of an Interest Payment Date prior to the exchange of such temporary global Security for a permanent global Security or for definitive Securities of the series will be paid to any clearing organization with respect to the portion of such temporary global Security held for its account and, in such event, the terms and conditions (including certification requirements) upon which any such interest payment received by a clearing organization will be credited to the persons entitled to interest payable on such Interest Payment Date, and any other requirements in addition to or in lieu of those provided herein relating to the payment of interest on or any Additional Amounts in respect of Bearer Securities; (5) the date or dates (and whether fixed or extendible) on which the principal of Securities of the series is payable; (6) the rate or rates at which Securities of the series shall bear interest, or the method of determining the same, if any, the date or dates from which such interest shall accrue, or the method of determining the same, if any, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any interest payable on 9 any Registered Securities on any Interest Payment Date, whether and under what circumstances Additional Amounts on Securities of the series or any of them shall be payable, and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months; (7) the place or places where, subject to Section 4.01, the principal of, any interest on or any Additional Amounts payable in respect of Securities of the series shall be payable, any Registered Securities of the series may be surrendered for registration of transfer, any Securities of the series may be surrendered for exchange and notices and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served; (8) any provisions relating to the issuance of Securities of such series at an original issue discount (including, without limitation, the issue price thereof, the rate or rates at which such original issue discount shall accrue, if any, and the date or dates from or to which or period or periods during which such original issue discount shall accrue at such rate or rates); (9) the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed or otherwise purchased, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise (including, without limitation, the form or method of payment thereof if other than in cash); (10) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Securityholder thereof and the price or prices at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation (including, without limitation, the form or method of payment thereof if other than in cash); (11) the currency or currencies, including composite currencies, in which payment of the principal of, any interest on and any Additional Amounts payable in respect of the Securities of the series shall be payable, or in which the Securities of the series shall be denominated, if other than Dollars; (12) if the principal of, any interest on or any Additional Amounts payable in respect of the Securities of the series is to be payable, at the election of the Company or a Securityholder, in a currency or currencies, including composite currencies, other than that in which the Securities of such series are denominated or stated to be payable, the terms and conditions upon which such election may be made and the method for determining amounts payable; 10 (13) if the amount of payments of principal of or interest on the Securities of the series may be determined with reference to an index, formula or other method or methods (which index, formula, method or methods may be based, without limitation, on one or more currencies, commodities, equity indices or other indices), the terms and conditions upon which and the manner in which such amounts shall be determined and paid or payable; (14) the denominations in which any Registered Securities of the series shall be issuable, if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which Bearer Securities of the series shall be issuable if other than denominations of $5,000; (15) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon acceleration of the maturity thereof pursuant to Section 6.02 or provable in bankruptcy pursuant to Section 6.09, or, if applicable, which is convertible or exchangeable; (16) any Events of Default with respect to the Securities of a particular series in lieu of or in addition to those set forth herein and the remedies therefor; (17) the obligation, if any, of the Company to permit the conversion of Securities of such series into Company Stock and the terms and conditions upon which such conversion shall be effected (including, without limitation, the initial conversion price or rate, adjustments to the conversion price or rate, the conversion period and any other provision relative to such obligation); (18) the obligation, if any, of the Company to permit the exchange of Securities of such series into other securities (whether or not issued by, or the obligation of, the Company) or a combination of cash, other securities and/or property, and the terms and conditions upon which such exchanges shall be effected (including, without limitation, the initial exchange price or rate, adjustments to the exchange price or rate, the exchange period and any other provision relative to such obligation); (19) if any Securities of the series are to be issuable upon the exercise of warrants, this shall be so established and (if established by resolution of the Board of Directors) so set forth, as well as the time, manner and place for such Securities to be authenticated and delivered; (20) if there is more than one Trustee, the identity of the Trustee and, if not the Trustee, the identity of each Registrar, Paying Agent, Conversion Agent or Exchange Agent with respect to the Securities of the series; and (21) whether, and the terms and conditions relating to when, the Company may satisfy certain of its obligations with respect to such Securities with regard to payment upon 11 maturity, or any redemption or required repurchase, or in connection with any exchange provisions by delivery to the Holders thereof securities (whether or not issued by, or the obligation of, the Company) or a combination of cash, other securities and/or property. (22) any other terms of a particular series including any terms which may be required by or advisable under United States or applicable foreign laws or regulations or advisable in connection with the marketing or remarketing of Securities of that series, and any other provisions expressing or referring to the terms and conditions upon which the Securities of that series are to be issued under this Indenture, which terms and provisions are not in conflict with the provisions of this Indenture; provided, however, that the addition to or subtraction from or variation of Articles IV, V, VI and VIII (and Sections 1.01 and 1.02, insofar as they relate to the definition of certain terms as used in such Articles) with regard to the Securities of a particular series shall not be deemed to constitute a conflict with the provisions of those Articles. All Securities of any one series and the coupons appertaining to any Bearer Securities of such series shall be substantially identical except, in the case of Registered Securities, as to denomination and except as may otherwise be provided in or pursuant to such resolution of the Board of Directors or in any such indenture supplemental hereto. Not all Securities of any one series need be issued at the same time, and, unless otherwise so provided, a series may be reopened for issuances of additional Securities of such series. If any of the terms of the Securities of a series are established by action taken pursuant to a resolution of the Board of Directors or indenture supplemental hereto, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee with an Officers' Certificate setting forth the terms or the manner of determining the terms of the Securities of such series. With respect to Securities of a series which are not to be issued at one time, such resolution of the Board of Directors or action may provide general terms or parameters for Securities of such series and provide either that the specific terms of particular Securities of such series shall be specified in a written order of the Company or that such terms shall be determined by the Company or its agents in accordance with a written order of the Company as contemplated by the last sentence of the fourth paragraph of Section 2.04. Section 2.03. Denominations. Unless otherwise provided as contemplated by Section 2.02 with respect to any series of Securities and except as provided in Section 2.10, any Registered Securities of a series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiple thereof and any Bearer Securities of a series denominated in Dollars shall be issuable in the denomination of $5,000. 12 Section 2.04. Execution, Authentication, Delivery and Dating. Two Officers shall sign the Securities for the Company. The Company's seal shall be reproduced on the Securities. An Officer shall sign the coupons attached to any Bearer Security for the Company. The signature of any Officer on the Securities or any coupons appertaining thereto may be manual or facsimile. If an Officer whose signature is on a Security or a coupon no longer holds that office at the time the Trustee authenticates such Security, the Security and coupon shall be valid nevertheless. A Security or coupon shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until the certificate of authentication on the Security is manually signed by the Trustee or on its behalf by an Authenticating Agent. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. Notwithstanding the foregoing, if any Security shall have been duly authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 2.12 together with a written statement (which need not comply with Sections 10.04 and 10.05 and need not be accompanied by an Opinion of Counsel) stating that such Security has not been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed not to have been authenticated and delivered hereunder and shall not be entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series together with any coupon appertaining thereto executed by the Company to the Trustee for authentication, and the Trustee shall, subject to the provisions hereof and of such Securities, authenticate said Securities and deliver said Securities and any coupons appertaining thereto to or upon the written order of the Company, signed by two Officers or by an Officer and an Assistant Treasurer of the Company, without any further action by the Company. Unless otherwise specified as contemplated by Section 2.02, no Bearer Security shall be mailed or otherwise delivered to any location in the United States. Further, a Bearer Security (including a permanent global Bearer Security) may be delivered only if all applicable certifications and other requirements specified as contemplated by Section 2.02 with respect to the Securities of or within such series have been satisfied with respect to such Bearer Security (or, if applicable, a Predecessor Security). Except as permitted by Section 2.09, the Trustee shall not authenticate and deliver any Bearer Security unless all appurtenant coupons for interest then matured have been detached and cancelled. If not all the Securities of a series are to be issued at one time and if the resolution of the Board of Directors or indenture supplemental hereto establishing such series as contemplated by Sections 2.01 and 2.02 shall so permit, the written order of the Company may set forth procedures acceptable to the Trustee for the issuance of such Securities and for determining the form of terms of particular Securities of such series including, but not limited to, interest rate, maturity date, date of issuance and date from which interest shall accrue. 13 If the form or forms or terms of Securities of the series and any related coupons have been established in or pursuant to one or more resolutions of the Board of Directors or indentures supplemental hereto as permitted by Sections 2.01 and 2.02, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating, (1) if the form or forms of such Securities and any coupons have been established by or pursuant to a resolution of the Board of Directors or indenture supplemental hereto, that such form or forms have been established in conformity with the provisions of this Indenture; (2) if the terms of such Securities and any coupons have been established by or pursuant to a resolution of the Board of Directors or indenture supplemental hereto, that such terms have been established in conformity with the provisions of this Indenture; and (3) that such Securities together with any coupons appertaining thereto, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights, to general equitable principles and to such other qualifications as such counsel shall conclude do not materially affect the rights of Holders of such Securities and any coupons; provided, however, that, with respect to Securities of a series which are not to be issued at one time, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication of Securities of such series and that the opinions described in clauses (2) and (3) above may state, respectively, (a) that, when the terms of such Securities and any coupons shall have been established pursuant to a written order of the Company or pursuant to such procedures as may be specified from time to time by a written order of the Company, all as contemplated by and in accordance with a resolution of the Board of Directors or an Officers' Certificate pursuant to a resolution of the Board of Directors or indenture supplemental hereto, as the case may be, such terms will have been established in conformity with the provisions of this Indenture; and (b) that such Securities and any coupons appertaining thereto, when (i) executed by the Company, (ii) completed, authenticated and delivered by the Trustee in accordance with this Indenture, (iii) issued and delivered by the Company and (iv) paid for, all as contemplated by and in accordance with the aforesaid written order of the Company or specified procedures, as the case may be, and in the manner and subject to any conditions 14 specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights, to general equitable principles and to such other qualifications as such counsel shall conclude do not materially affect the rights of Holders of such Securities and any coupons. Notwithstanding the provisions of Sections 2.01, 2.02, 10.04 and this Section, if all the Securities of a series are not to be originally issued at one time, the resolution of the Board of Directors or indenture supplemental hereto, the certified copy of the record of action taken pursuant to such resolution or supplemental indenture, the Officers' Certificate, the written order of the Company and any other documents otherwise required pursuant to such Sections need not be delivered at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued, provided, however, that any subsequent request by the Company to the Trustee to authenticate Securities of such series shall constitute a representation and warranty by the Company that as of the date of such request, the statements made in the Officers' Certificate delivered pursuant to Section 10.04 at or prior to authentication of the first such Security shall be true and correct on the date thereof as if made on and as of the date thereof. The Trustee shall have the right to decline to authenticate and make available for delivery any Securities together with any coupons appertaining thereto under this Section if the issuance of such Securities pursuant to this Indenture will alter the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. With respect to Securities of a series which are not all issued at one time, the Trustee may conclusively rely, as to the authorization by the Company of any of such Securities and any coupons, the form and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel, Officers' Certificate and other documents delivered pursuant to Sections 2.01, 2.02, 10.04 and this Section, as applicable, at or prior to the time of the first authentication of Securities of such series unless and until such opinion, certificate or other documents have been superseded or revoked. In connection with the authentication and delivery of Securities of a series and any coupons which are not all issued at one time, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Securities do not violate any rules, regulations or orders of any governmental agency or commission having jurisdiction over the Company. Each Registered Security shall be dated the date of its authentication and each Bearer Security (including any temporary Bearer Security in global form) shall be dated as of the date specified as contemplated by Section 2.02. 15 Section 2.05. Registrar, Paying Agent, Conversion Agent and Authenticating Agent. The Company shall maintain an office or agency where Registered Securities of each series may be presented for registration of transfer or for exchange ("Registrar"), an office or agency where Securities of each series may be presented for payment ("Paying Agent"), an office or agency where Securities of each series that is convertible may be presented for conversion ("Conversion Agent") and an office or agency where Securities of each series that is exchangeable may be presented for exchange ("Exchange Agent") and (but without duplication) such offices or agencies in such locations and for such purposes as may be required as contemplated by Section 4.01. The Registrar shall keep a register of the Registered Securities of each series issued hereunder and of their transfer and exchange. The Company may have one or more co-Registrars (provided that there shall be only one register, which shall be maintained by the principal Registrar), one or more additional paying agents one or more additional conversion agents and one or more additional exchange agents with respect to any series. The term "Paying Agent" includes any additional paying agent, the term "Conversion Agent" includes any additional conversion agent and the term "Exchange Agent" includes any additional exchange agent. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Company shall promptly notify the Trustee of the name and address of any such Agent. If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or Exchange Agent, the Trustee shall act as such. The Company initially appoints the Trustee Registrar and Paying Agent for each series and Conversion Agent for any series that is convertible and Exchange Agent for any series that is exchangeable. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue or upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 2.09 and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually pursuant to law or to the requirements of said supervising or examining authority, then, for the purposes of this Section, the combined capital and 16 surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of such Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or such Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in the case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give written notice of such appointment to all Holders of Securities of the series with respect to which such Authenticating Agent will serve in the manner and to the extent provided in Section 10.02. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. If an appointment of an Authenticating Agent with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to or in lieu of the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: 17 CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. , as Trustee By:_____________________________ As Authenticating Agent By:_____________________________ Authorized Signatory Section 2.06. Paying Agent to Hold Money and Securities in Trust. Prior to each due date of a principal payment in respect of any Security, the Company shall deposit with the Paying Agent a sum of money or securities sufficient to make such payment when so becoming due. Each Paying Agent shall hold in trust for the benefit of Securityholders of the relevant series or the Trustee all money and securities held by the Paying Agent for the payment of any amount in respect of the Securities of such series, and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate such money and securities and hold them as a separate trust fund. The Company at any time may require a Paying Agent to pay all money and securities held by it to the Trustee and account for any funds or securities disbursed. Upon doing so, the Paying Agent shall have no further liability for the money or securities. Section 2.07. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee on or before either (1) April 1 and October 1 in each year in the case of Original Issue Discount Securities of any series which by their terms do not bear interest prior to maturity (other than upon a default in any payment upon such a Security) or (2) the Interest Payment Date for Securities of any other series, but in no event less frequently than semi-annually, and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders included in the security register. Section 2.08. Transfer and Exchange. Upon presentation for registration of transfer of a Registered Security of any series at the office or agency of the Company maintained for such purposes in a place of payment for such series, 18 the Company shall execute and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series of any authorized denominations and of a like aggregate principal amount, bearing a number not contemporaneously outstanding and containing identical terms and provisions. Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a global Security representing all or a portion of the Securities of or within a series may not be transferred except as a whole by the depositary for such series to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor depositary for such series or a nominee of such successor depositary. At the option of the Holder, Registered Securities of any series (other than a global Security, except as provided below or as otherwise specified as contemplated by Section 2.02) may be exchanged for other Registered Securities of the same series of any authorized denominations and of a like aggregate principal amount and containing identical terms and provisions, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. Unless otherwise specified with respect to any series of Securities as contemplated by Section 2.02, Bearer Securities may not be delivered by the Trustee in exchange for Registered Securities. If so provided pursuant to Section 2.02 with respect to the Securities of any series, at the option of the Holder, Bearer Securities of such series (other than a global Security, except as provided below or as otherwise specified as contemplated by Section 2.02) may be exchanged for Registered Securities of such series containing identical terms of any authorized denominations and of a like aggregate principal amount, upon surrender of the Bearer Securities to be exchanged at any office or agency maintained by the Company for such purpose in a place of payment for such series, with all unmatured coupons and all matured coupons in default thereto appertaining. If the Holder of a Bearer Security is unable to produce any unmatured coupon or coupons or matured coupon or coupons in default, such exchange may be effected if the Bearer Securities are accompanied by payment in funds acceptable to the Company in an amount equal to the face amount of such missing coupon or coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there is furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing coupon in respect of which such a payment shall have been made, such Holder shall be entitled to receive the amount of such payment, provided, however, that, except as otherwise provided in Section 4.01, interest represented by coupons shall be payable only upon presentation and surrender of those coupons at an office or agency located outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at any such office or agency for such series in exchange for a Registered Security of the same series and like tenor after the close of business at such office or agency (i) on any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) on any special record date and before the opening of business at such 19 office or agency on the related date for payment of defaulted interest, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date or proposed date of payment, as the case may be, and interest or defaulted interest, as the case may be, will not be payable on such Interest Payment Date or proposed date of payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon in accordance with the provisions of this Indenture. Whenever any Securities are so surrendered for exchange pursuant to the immediately preceding paragraph, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. Except as otherwise provided with respect to the Securities of any series as contemplated by Section 2.02, a global Security may be exchanged only as provided below in this Section. If at any time the depositary with respect to a global Security representing all or a portion of the Securities of or within a series notifies the Company that it is unwilling, unable or ineligible to continue as such depositary, the Company shall appoint a successor depositary with respect to such Securities. Unless otherwise provided with respect to a series of Securities as contemplated by Section 2.02, if a successor depositary is not so appointed by the Company within 90 days after the Company receives such notice, the Company will execute and the Trustee, upon receipt of a written order of the Company as contemplated by Section 2.04 for the authentication and delivery of definitive Securities of such series (or, if such written order has previously been delivered, then upon receipt of written instructions from the person or persons specified in such written order), will authenticate and deliver Securities of such series in definitive form equal in aggregate principal amount to the principal amount of the global Security or Securities representing such series in exchange for such global Security or Securities. The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more global Securities shall no longer be represented by such global Security or Securities. In such event the Company will execute and the Trustee, upon receipt of a written order of the Company as contemplated by Section 2.04 for the authentication and delivery of definitive Securities of such series (or, if such written order has previously been delivered, then upon receipt of written instructions from the person or persons specified in such written order), will authenticate and deliver Securities of such series in definitive form equal in aggregate principal amount to the principal amount of the global Security or Securities representing such series in exchange for such global Security or Securities. If a global Security is otherwise exchangeable as specified by the Company pursuant to Section 2.02(3) with respect to a series of Securities, the depositary with respect to a global Security representing all or a portion of the Securities of or within such series may surrender such global Security to the Trustee, as the Company's agent for such purpose, to be exchanged in whole or in part for Securities of such series in definitive form in the manner and under the circumstances so specified and on such terms as are acceptable to the Company and such depositary. In such event, 20 the Company shall execute and the Trustee shall authenticate and deliver or make available for delivery: (i) to each person specified by such depositary a new Security or Securities of the same series and of like tenor, of any authorized form and denomination as requested by such person in aggregate principal amount equal to and in exchange for such person's beneficial interest in the global Security; and (ii) unless endorsement of the surrendered global Security as contemplated by Section 2.10 or another procedure is specified for the Securities of such series as contemplated by Section 2.02, to such depositary a new global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered global Security and the aggregate principal amount of Securities delivered pursuant to clause (i) above in exchange for beneficial interests in such surrendered global Security. In any exchange provided for in any of the preceding three paragraphs, the Company will execute and the Trustee will authenticate and deliver Securities (a) in definitive registered form in authorized denominations if the Securities of such series are issuable as Registered Securities, (b) in definitive bearer form in authorized denominations if the Securities of such series are issuable as Bearer Securities or (c) as either Registered or Bearer Securities, if the Securities of such series are issuable in either form; provided, however, that no definitive Bearer Security shall be delivered in exchange for a portion of a global Security except in compliance with the conditions set forth in Section 2.04 or specified with respect to the Securities of such series as contemplated by Section 2.02 (including certification requirements and requirements with respect to delivery outside the United States). Upon the exchange of a global Security for Securities in definitive form, such global Security shall be canceled by the Trustee, unless endorsement of the surrendered global Security as contemplated by Section 2.10 or another procedure is specified for the Securities of such series as contemplated by Section 2.02. Registered Securities issued in exchange for a global Security pursuant to this Section shall be registered in such names and in such authorized denominations as the depositary for such global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Registered Securities to the persons in whose names such Securities are so registered. Subject to the proviso clause of the immediately preceding paragraph, the Trustee shall deliver Bearer Securities issued in exchange for a global Security pursuant to this Section to the persons, and in such authorized denominations, as the depositary for such global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. If a Registered Security is issued in exchange for any portion of a global Security after the close of business at the office or agency where such exchange occurs (i) on any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) on any special record date and before the opening of business at such office or agency on the 21 related date for payment of defaulted interest, interest or defaulted interest, as the case may be, will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Registered Security, but will be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the person to whom interest in respect of such portion of such global Security is payable in accordance with the provisions of this Indenture. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Registered Security presented or surrendered for registration of transfer or for exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Company shall not be required to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before any selection of Securities of that series to be redeemed and ending at the close of business on (A) if Securities of the series are issuable only as Registered Securities, the date of the mailing of the relevant notice of redemption and (B) if Securities of the series are issuable as Bearer Securities, the date of the first publication of the relevant notice of redemption or, if Securities of such series are also issuable as Registered Securities and there is no publication, the date of the mailing of the relevant notice of redemption. Further, the Company shall not be required to register the transfer of or exchange any Security selected for redemption or purchase (except, in the case of Securities to be redeemed or purchased in part, the portion thereof not to be redeemed or purchased), and the Company shall not be required to issue, register the transfer of or exchange any Security in respect of which a notice requiring the purchase or redemption thereof by the Company at the option of the Holder has been given and not withdrawn by the Holder thereof in accordance with the terms of such Securities (except, in the case of Securities to be so purchased or redeemed in part, the portion thereof not to be so purchased or redeemed); provided, however, that a Bearer Security so selected for redemption or purchase or in respect of which a notice requiring the purchase or redemption thereof by the Company at the option of the Holder has been given and not so withdrawn may, if so provided with respect to the Securities of such series as contemplated by Section 2.02, be exchanged for a Registered Security of that series and like tenor, provided that such Registered Security shall simultaneously be surrendered for redemption or purchase, as the case may be, with written instructions for payment consistent with the provisions of this Indenture. 22 Section 2.09. Replacement Securities. If (i) a mutilated Security or a Security with a mutilated coupon appertaining to it is surrendered to the Trustee or (ii) the Company and the Trustee receive evidence to their satisfaction that a Security or coupon appertaining thereto has been lost, destroyed or wrongfully taken, and there is delivered to the Company and the Trustee such security or indemnity as may be required by them to save each of them and any Agent harmless, then, in the absence of notice to the Company or the Trustee that such Security or coupon has been acquired by a bona fide purchaser, and if the Trustee's requirements are met, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in exchange for any such mutilated Security or Security with a mutilated coupon appertaining to it or to which a lost, destroyed or wrongfully-taken coupon appertains (with all appurtenant coupons not lost, destroyed or wrongfully taken) or in lieu of any such lost, destroyed or wrongfully taken Security, a new Security of the same series containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding, with coupons corresponding to the coupons, if any, appertaining to the surrendered Security or to the lost, destroyed or wrongfully-taken Security or to the Security to which such lost, destroyed or wrongfully-taken coupon appertains, as applicable, provided, however, that delivery of a Bearer Security shall occur only outside the United States. In case any such mutilated, lost, destroyed or wrongfully-taken Security or coupon has become or is about to become due and payable, or is about to be purchased by the Company pursuant to any provision of the Securities of such series providing for the purchase thereof at the option of the Holder or the Company, the Company in its discretion may, instead of issuing a new Security, pay or purchase such Security or pay such coupon, as applicable; provided, however, that payment of principal of, any interest on or any Additional Amounts with respect to any Bearer Securities shall, except as otherwise provided in Section 4.01, be payable only at an office or agency for Securities of such series located outside the United States and, unless otherwise provided in or pursuant to this Indenture, any interest on Bearer Securities and any Additional Amounts with respect to such interest shall be payable only upon presentation and surrender of the coupons appertaining thereto. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security, with any coupons appertaining thereto, issued pursuant to this Section in lieu of any lost, destroyed or wrongfully-taken Security, or in exchange for a Security to which a lost, destroyed or wrongfully-taken coupon appertains, shall constitute a separate obligation of the Company, whether or not the lost, destroyed or wrongfully-taken Security and coupons appertaining thereto or the lost, destroyed or wrongfully-taken coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series and any coupons, if any, duly issued hereunder. 23 The provisions of this Section, as amended or supplemented pursuant to this Indenture with respect to particular Securities or generally, shall be exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully-taken Securities or coupons. Section 2.10. Securities in Global Form. If the Company shall establish pursuant to Section 2.02 that the Securities of or within a series are to be issued in whole or in part in global form, then the Company shall execute, and the Trustee shall, in accordance with Section 2.04 and the written order of the Company contemplated thereby, authenticate and deliver one or more global Securities in temporary or permanent form that (i) shall be registered, if in registered form, in the name of the depositary for such global Security or Securities or the nominee of such depositary, (ii) shall be delivered by the Trustee to such depositary or pursuant to such depositary's instructions, and (iii) shall bear a legend substantially to the following effect: "Unless and until it is exchanged in whole or in part for Securities in definitive form, this Security may not be transferred except as a whole by the depositary to a nominee of the depositary or by a nominee of the depositary to the depositary or another nominee of the depositary or by the depositary or any such nominee to a successor depositary or a nominee of such successor depositary." Each depositary designated pursuant to Section 2.02 for a global Security in registered form must be, to the extent required by applicable law or regulation, a clearing agency registered under the Securities Exchange Act of 1934, as amended, and any other applicable statute or regulation, at the time of its designation and at all times that it serves as depositary. Notwithstanding clause (14) of Section 2.02 and the provisions of Section 2.03, any such global Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities of such series from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be increased or decreased to reflect exchanges. Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of outstanding Securities represented thereby shall be made in such manner and upon instructions given by such person or persons as shall be specified therein or in the written order of the Company to be delivered to the Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if applicable, Section 2.11, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the person or persons specified therein or in the applicable written order of the Company. If a written order of the Company pursuant to Section 2.04 has been, or simultaneously is, delivered, any instructions with respect to a Security in global form shall be in writing but need not comply with Sections 10.04 and 10.05 and need not be accompanied by an Opinion of Counsel. The provisions of the last sentence of the third paragraph of Section 2.04 shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company delivers to the Trustee the Security in global form together with written instructions (which need not comply with Sections 10.04 and 10.05 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities 24 represented thereby, together with the written statement contemplated by the last sentence of the third paragraph of Section 2.04. Section 2.11. Temporary Securities. Pending the preparation of a permanent global Security or definitive Securities of any series, the Company may execute and the Trustee, upon the written order of the Company pursuant to Section 2.04, shall authenticate and deliver temporary Securities. Temporary Securities of any series shall be in authorized denominations and substantially of the tenor of the definitive Securities of that series in lieu of which they are issued, in registered form or, if authorized, in bearer form with one or more coupons or without coupons, but may have variations that the Company considers appropriate for temporary Securities. In the case of Securities of any series, such temporary Securities may be in global form. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. Except as otherwise specified as contemplated by Section 2.02 with respect to Securities of a series issuable as Bearer Securities, (a) after the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company maintained for such purpose in a place of payment for such series, without charge to the Holder, and (b) upon surrender for cancellation of any one or more temporary Securities of any series (accompanied by any unmatured coupons appertaining thereto) the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like aggregate principal amount of definitive Securities of authorized denominations of the same series and containing identical terms and provisions; provided, however, that, unless otherwise specified as contemplated by Section 2.02, no definitive Bearer Security shall be delivered in exchange for a temporary Registered Security and provided, further, that neither a beneficial interest in a permanent global Security in bearer form nor a definitive Bearer Security shall be delivered in exchange for a temporary Security except in compliance with all applicable conditions set forth in Section 2.04 or specified as contemplated by Section 2.02 (including certification requirements and requirements with respect to delivery outside the United States). Until so exchanged, the temporary Securities of any series shall, except as otherwise specified as contemplated by Section 2.02 (including with respect to the payment of interest on temporary Securities), in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and of like tenor authenticated and delivered hereunder. Section 2.12. Cancellation. The Company at any time may deliver Securities and all coupons, if any, appertaining thereto to the Trustee (or to another person for delivery to the Trustee) for cancellation, including Securities authenticated which the Company has not issued and sold. The Company and each Agent shall forward to the Trustee for cancellation any Securities and coupons surrendered to them for transfer, exchange, payment, redemption, purchase by the Company pursuant to any provision thereof providing for such purchase at the option of the Holder, or conversion. The Trustee and no one else shall cancel all Securities and coupons surrendered for transfer, exchange, payment, redemption, 25 purchase, conversion or cancellation, and may dispose of canceled Securities and coupons as the Company directs, provided, however, that the Trustee shall not be required to destroy such canceled Securities. Except as otherwise provided in the resolution of the Board of Directors or indenture supplemental hereto establishing such series as contemplated by Section 2.02, the Company may not issue new Securities of a series to replace Securities of the same series that it has paid or that have been delivered to the Trustee for cancellation. Section 2.13. Payment of Interest; Defaulted Interest. Unless otherwise provided with respect to the Securities of any series as contemplated by Section 2.02, interest (except defaulted interest) on any Registered Security of any series which is payable on any Interest Payment Date shall be paid to the Holder in whose name that Security (or one or more Predecessor Securities) is registered on the security register at the close of business on the Regular Record Date for such interest payment. At the option of the Company, payment of interest on any Registered Security may be made (i) by check mailed to the address of the person entitled thereto as such address appears in the security register, or (ii) if so specified with respect to the Securities of such series as contemplated by Section 2.02, by wire transfer to an account designated by such person. Unless otherwise provided with respect to the Securities of any series as contemplated by Section 2.02, if the Company defaults in a payment of interest on the Registered Securities of any series on any Interest Payment Date, it shall pay the defaulted interest to the persons who are Securityholders of such series at the close of business on a subsequent special record date. The Company shall fix the record date and payment date. At least 15 days before the record date, the Company shall mail to each Securityholder of such series a notice that states the record date, the payment date and the amount of defaulted interest to be paid. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Registered Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Paying Agent an amount of money equal to the aggregate amount proposed to be paid in respect of such defaulted interest or shall make arrangements satisfactory to the Paying Agent for such deposit prior to the date of the proposed payment. The Company may pay defaulted interest in any other lawful manner. Unless otherwise provided with respect to the Registered Securities of any series as contemplated by Section 2.02, in the case of any Registered Security of any series which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Registered Security which is due and payable prior to such Interest Payment Date), interest which is due and payable on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion, and such interest shall be paid to the Holder in whose name that Registered Security is registered at the close of business on such Regular Record Date. 26 If any Bearer Security of a series is surrendered in exchange for a Registered Security of such series at an office or agency maintained by the Company for such purpose in a place of payment for such series after the close of business at such office or agency (i) on any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date or (ii) on any special record date and before the opening of business at such office or agency on the related date for payment of defaulted interest, such Bearer Security shall be surrendered without the coupon relating to such Interest Payment Date or proposed date of payment, as the case may be, and interest or defaulted interest, as the case may be, will not be payable on such Interest Payment Date or proposed date of payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but will be payable only to the Holder of such coupon when due in accordance with the provisions of this Indenture. Unless otherwise specified with respect to the Securities of any series pursuant to Section 2.02, any interest due on any Bearer Security on or before the maturity thereof, and any Additional Amounts payable with respect to such interest, shall be payable only upon presentation of the coupons appertaining thereto for such interest as they severally mature. Unless otherwise specified with respect to the Securities of any series pursuant to Section 2.02, at the option of the Company, payment of interest on any Bearer Security may be made by check (provided the same is not mailed to an address inside the United States) or by wire transfer to an account located outside the United States maintained by the payee. Section 2.14. Persons Deemed Owners. Prior to due presentment of a Registered Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name such Registered Security is registered as the owner of such Registered Security for the purpose of receiving payment of principal of, and (subject to Sections 2.08 and 2.13) interest on and any Additional Amounts with respect to, such Registered Security and for all other purposes whatsoever, whether or not any payment with respect to such Registered Security shall be overdue, and neither the Company, nor the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary. Title to any Bearer Security and any coupons appertaining thereto shall pass by delivery. The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any Bearer Security or the bearer of any coupon as the absolute owner of such Security or coupon for the purpose of receiving payment thereof or on account thereof and all other purposes whatsoever, whether or not any payment with respect to such Security or coupon shall be overdue, and neither the Company, nor the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary. No holder of any beneficial interest in any global Security held on its behalf by a depositary shall have any rights under this Indenture with respect to such global Security, and such depositary (or its nominee, if such global Security is in registered form and is registered in the name of a nominee) may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such global Security for all purposes whatsoever; provided, however, that, if so 27 specified as contemplated by Section 2.02, the Company, the Trustee and any agent of the Company or the Trustee shall, to the extent so specified, treat the clearing organization or organizations for whose account a portion of a permanent global Security in bearer form is held by the depositary thereof as the owner of the applicable portion of such global Security. None of the Company, the Trustee, any Paying Agent or the Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, with respect to any global Security, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by any depositary, as a Holder, with respect to such global Security or impair, as between such depositary and owners of beneficial interests in such global Security, the operation of customary practices governing the exercise of the rights of such depositary (or its nominee) as Holder of such global Security. Section 2.15. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if the Company does so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any changes in the "CUSIP" numbers. ARTICLE III REDEMPTION Section 3.01. Applicability of Article. Securities of any series which are redeemable before their stated maturity at the election of the Company or through the operation of any sinking fund for the retirement of Securities of such series shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.02 for Securities of any series) in accordance with this Article. Section 3.02. Notices to Trustee. If the Company elects to redeem all or less than all the Securities of any series, it shall notify the Trustee of the redemption date, the principal amount of Securities to be redeemed, the specific provision of the Securities pursuant to which the Securities being called for redemption are being redeemed and the redemption price. In the case of any redemption of Securities prior to the 28 expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. If the Company wants to make any permitted optional sinking fund payment, it shall notify the Trustee of the principal amount of the Securities to be redeemed. The Company (1) may deliver outstanding Securities of a series (other than any previously called for redemption), together in the case of any Bearer Securities of such series with all unmatured coupons appertaining thereto, and (2) may apply as a credit Securities of a series which (i) have been redeemed or otherwise purchased either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities or (ii) have been converted pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment required to be made pursuant to the terms of the Securities of such series as provided for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. The Company shall notify the Trustee of its intention to so reduce the amount of such sinking fund payment, the amount of the reduction and the basis for it. The Company shall deliver to the Trustee with such notice any Securities to be credited for such purpose that it has not previously delivered to the Trustee for cancellation. The Company shall give each notice and Officers' Certificate provided for in this Section at least 60 days before the redemption date (unless a shorter notice shall be satisfactory to the Trustee or is otherwise specified as contemplated by Section 2.02 for Securities of any series). Section 3.03. Selection of Securities to be Redeemed. Except as otherwise specified as contemplated by Section 2.02 for Securities of any series, if less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected from Securities of the same series outstanding not previously called for redemption by lot or by such method as the Trustee considers fair and appropriate (and in such manner as complies with applicable requirements of any stock exchange on which Securities of such series are listed) and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series that have denominations larger than the minimum authorized denomination for Securities of that series. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. If any Security selected for partial redemption is converted in part after such selection but before the termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be practicable) to be the portion selected for redemption. 29 Section 3.04. Notice of Redemption. At least 30 days but not more than 60 days before a redemption date (unless a shorter notice is specified as contemplated by Section 2.02 for the Securities of any series), the Company shall provide a notice of redemption in the manner provided in Section 11.02 to the Holders of Securities. The notice shall identify the Securities (including CUSIP number, if any and, in the case of partial redemption, the principal amount of the Securities) to be redeemed and shall state: (1) the redemption date; (2) the redemption price and method of payment, if other than in cash; (3) if applicable, the then current conversion price or rate; (4) the name and address of the Paying Agent and, if applicable, the Conversion Agent or Exchange Agent; (5) if applicable, that the right of the Holder to convert or exchange Securities called for redemption shall terminate at the close of business on the fifteenth day prior to the redemption date (or such other day as may be specified as contemplated by Section 2.02 for Securities of any series); (6) if applicable, that Holders who want to convert or exchange Securities called for redemption must satisfy the requirements for conversion or exchange contained in such Securities; (7) that Securities called for redemption must be surrendered (together in the case of Bearer Securities with all coupons appertaining thereto, if any, maturing after the redemption date) to the Paying Agent to collect the redemption price; (8) that interest, if any (or original issue discount, if Original Issue Discount Securities) on Securities called for redemption ceases to accrue on and after the redemption date, unless the Company defaults in making such redemption payment; and (9) that the redemption is for a sinking fund or at the election of the Company, whichever is the case. A notice of redemption published as contemplated by Section 10.02 need not identify particularly Registered Securities to be redeemed. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense, provided that the Company shall have furnished to the Trustee 30 the Officers' Certificate and Opinion of Counsel required pursuant to Section 10.04 at least 15 days prior to the date that the Trustee is required to take any action in connection with a redemption. Section 3.05 Effect of Notice of Redemption. Once notice of redemption is provided, Securities of the series called for redemption become due and payable on the redemption date and at the redemption price therein specified and on and after such date (unless the Company shall default in the payment of the redemption price and accrued interest, if any) such Securities shall cease to bear interest, if any (and original issue discount, if such Securities are Original Issue Discount Securities, shall cease to accrue) and the coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void. Upon surrender of any such Security for redemption in accordance with said notice, together with all coupons, if any, appertaining thereto maturing after the redemption date, such Security shall be paid by the Company at the redemption price, together with the accrued interest to the redemption date, provided, however, that installments of interest on Bearer Securities whose stated maturity is on or prior to the redemption date shall be payable only at an office or agency maintained by the Company in a place of payment located outside the United States (except as otherwise provided in Section 4.01) and, unless otherwise specified as contemplated by Section 2.02, only upon presentation and surrender of the coupons for such interest, and, provided further, that unless otherwise specified as contemplated by Section 2.02, installments of interest on Registered Securities whose stated maturity is on or prior to the redemption date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date or special record date, as the case may be, according to their terms and the provisions of Section 2.13. If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant coupons maturing after the redemption date, such Security may be paid after deducting from the redemption price an amount equal to the face amount of all such missing coupons, or the surrender of such missing coupon or coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or any Paying Agent any such missing coupon in respect of which a deduction shall have been made from the redemption price, such Holder shall be entitled to receive the amount so deducted; provided, however, that interest represented by coupons shall be payable only at an office or agency located outside the United States (except as otherwise provided in Section 4.01) and, unless otherwise specified as contemplated by Section 2.02, only upon presentation and surrender of those coupons. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal shall, until paid, bear interest from the redemption date at the rate prescribed therefor in the Security. 31 Section 3.06. Deposit of Redemption Price. Unless otherwise provided as contemplated by Section 2.02 with respect to any series of Securities, on or before 10 a.m., New York time, on the redemption date, the Company shall deposit with the Paying Agent money in immediately available funds (or securities if permitted by the terms of such Securities) sufficient to pay the redemption price of, and (except if the redemption date is an Interest Payment Date) accrued interest, if any, on all Securities to be redeemed on that date other than Securities or portions thereof called for redemption on that date which are delivered by the Company to the Trustee for cancellation. The Paying Agent shall return to the Company any money (or securities) not required for that purpose because of conversion of Securities. Section 3.07. Securities Redeemed in Part. Any Registered Security that is to be redeemed only in part shall be surrendered at a place of payment therefor (with, if the Company, the Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company, the Registrar and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Registered Security or Registered Securities of the same series, containing identical terms and provisions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal amount of the Security so surrendered, and, otherwise specified as contemplated by Section 2.02, if a global Security is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the depositary for such global Security, without service charge, a new global Security in a denomination equal to and in exchange for the unredeemed portion of the principal amount of the global Security so surrendered. Section 3.08. Conversion or Exchange Arrangement on Call for Redemption. In connection with any redemption of Securities, the Company may arrange for the purchase and conversion of any Securities called for redemption by an agreement with one or more investment bankers or other purchasers to purchase such Securities by paying to the Trustee in trust for the Securityholders, on or before the close of business on the redemption date, an amount in cash not less than the redemption price, together with interest, if any, accrued to the redemption date, of such Securities. Notwithstanding anything to the contrary contained in this Article III, the obligation of the Company to pay the redemption price of such Securities, including all accrued interest, if any, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such purchasers. If such an agreement is entered into, any Securities not duly surrendered for conversion or exchange by the Holders thereof may, at the option of the Company, be deemed, to the fullest extent permitted by law, acquired by such purchasers from such Holders and surrendered by such purchasers for conversion or exchange, all as of immediately prior to the close of business on the last day on which Securities of such series called for redemption may be converted or exchanged in accordance with the terms of such Securities, subject to payment of the above amount as aforesaid. 32 The Trustee shall hold and pay to the Holders whose Securities are selected for redemption any such amount paid to it in the same manner as it would moneys deposited with it by the Company for the redemption of Securities. Without the Trustee's prior written consent, no arrangement between the Company and such purchasers for the purchase and conversion or exchange of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee as set forth in this Indenture, and the Company agrees to indemnify the Trustee from, and hold it harmless against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase and conversion or exchange of any Securities between the Company and such purchasers, including the costs and expenses incurred by the Trustee in the defense of any claim or liability arising out of or in connection with the exercise or performance of any of its powers, duties, responsibilities or obligations under this Indenture. ARTICLE IV COVENANTS Section 4.01. Payment of Securities; Maintenance of Office or Agency. The Company shall pay the principal of and any interest on the Securities of each series in accordance with the terms of the Securities of such series, any coupons appertaining thereto, and this Indenture. To the extent enforceable under applicable law, the Company shall pay interest on overdue principal at the rate borne by the Securities of such series (unless a different rate is specified as contemplated by Section 2.02 for Securities of such series). If Securities of a series are issuable only as Registered Securities, the Company will maintain in each place of payment for such series an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. If Securities of a series are issuable as Bearer Securities, the Company will maintain (A) in the Borough of Manhattan, The City of New York, an office or agency where any Registered Securities of that series may be presented or surrendered for payment, where any Registered Securities of that series may be surrendered for registration of transfer, where Securities of that series may be surrendered for exchange, where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served and where Bearer Securities of that series and related coupons may be presented or surrendered for payment in the circumstances described in the following paragraph (and not otherwise), (B) subject to any laws or regulations applicable thereto, in a place of payment for that series which is located outside the United States, an office or agency where Securities of that series and related coupons may be presented and surrendered for payment (including payment of any Additional Amounts payable on Securities of that series); provided, however, that if the Securities of that series are listed on The International Stock Exchange of the United Kingdom and the 33 Republic of Ireland, the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, the Company will maintain a Paying Agent for the Securities of that series in London, Luxembourg or any other required city located outside the United States, as the case may be, so long as the Securities of that series are listed on such exchange, and (C) subject to any laws or regulations applicable thereto, in a place of payment for that series located outside the United States an office or agency where any Registered Securities of that series may be surrendered for registration of transfer, where Securities of that series may be surrendered for exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee and the Holders of the location, and any change in the location, of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency in respect of any series of Securities or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders of Securities of that series may be made and notices and demands may be made or served at the corporate trust office of the Trustee, except that Bearer Securities of that series and the related coupons shall be presented and surrendered for payment (including payment of any Additional Amounts payable on Bearer Securities of that series) at , and the Company hereby appoints the same as its agency to receive such respective presentations, surrenders, notices and demands. No payment of principal of or interest on Bearer Securities shall be made at any office or agency of the Company in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States, provided, however, that, if the Securities of a series are denominated and payable in Dollars, payment of principal of and interest on any Bearer Security (including any Additional Amounts payable on Securities of such series) shall be made at the office of the Company's Paying Agent in the Borough of Manhattan, The City of New York, if (but only if) payment in Dollars of the full amount of such principal of or interest on or additional amounts, as the case may be, at all offices or agencies outside the United States maintained for that purpose by the Company in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in accordance with the requirements set forth above for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee and the Holders of any such designation or rescission and of any change in the location of any such other office or agency. If any Securities of a series provide for the payment of Additional Amounts, the Company will pay to the Holder of any such Security of such series or any coupon appertaining thereto Additional Amounts as provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or interest on or in respect of, any Security of any series or payment of any related coupon or the net proceeds received on the sale or exchange of any Security 34 of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in the terms of such Securities and this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to such terms and this Section and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made. Except as otherwise provided with respect to the Securities of any series as contemplated by Section 2.02, if the Securities of a series provide for the payment of Additional Amounts, at least 10 days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to the maturity thereof, the first day on which a payment of principal is made), and at least 10 days prior to each date of payment of principal or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company will furnish the Trustee and the principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal or interest on the Securities of that series shall be made to Holders of Securities of that series or any related coupons who are Foreign Persons without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or coupons and the Company will pay to the Trustee or such Paying Agent the Additional Amounts required by the terms of such Securities and this Section. The Company covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section. Section 4.02. SEC Reports. The Company shall file with the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. The Company also shall comply with the other provisions of (S)TIA (S) 314(a). Section 4.03. Compliance Certificate. The Company shall, within 120 days after the end of each fiscal year of the Company, commencing with the first fiscal year following the issuance of Securities of any series under this Indenture, file with the Trustee a certificate of the principal executive officer, principal financial officer or principal accounting officer of the Company covering the period from the date of issuance of such Securities to the end of the fiscal year in which such Securities were issued, in the case of the first such certificate, and covering the preceding fiscal year in the case of each subsequent 35 certificate, and stating whether or not, to the knowledge of the signer, the Company has complied with all conditions and covenants on its part contained in this Indenture, and, if the signer has obtained knowledge of any default by the Company in the performance, observance or fulfillment of any such condition or covenant, specifying each such default and the nature thereof. For the purpose of this Section 4.03, compliance shall be determined without regard to any grace period or requirement of notice provided pursuant to the terms of this Indenture. The certificate need not comply with Section 10.05. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company a written statement signed by the Company's independent auditors stating (1) that their audit examination has included a review of the terms of this Indenture and the Securities as they relate to accounting matters, and (2) whether, in connection with their audit examination, any Event of Default has come to their attention and if such an Event of Default has come to their attention, specifying the nature and period of existence thereof. Section 4.04. Corporate Existence. Subject to the provisions of Section 5.01 hereof, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. Section 4.05. Waiver of Certain Covenants. If so provided in the applicable supplemental indenture, the Company may omit in any particular instance to comply with any term, provision or condition of any covenant set forth in such supplemental indenture with respect to the Securities of any series if before the time for such compliance the Holders of at least a majority in principal amount of the outstanding Securities of such series shall either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. Section 4.06. No Lien Created. This Indenture and the Securities do not create a Lien, charge or encumbrance on any property of the Company or any Subsidiary. Section 4.07. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on outstanding Securities as of the end of such year. 36 ARTICLE V SUCCESSOR CORPORATION Section 5.01. When Company May Merge, etc. The Company shall not consolidate with or merge into, or transfer its properties and assets substantially as an entirety to, another entity unless (1) the successor entity, which shall be an entity organized and existing under the laws of the United States or a State thereof, assumes by supplemental indenture all the obligations of the Company under the Securities and any coupons appertaining thereto and this Indenture; and (2) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing. Thereafter, unless otherwise specified as contemplated by Section 2.02 for the Securities of any series and any related coupons, all such obligations of the predecessor corporation shall terminate. ARTICLE VI DEFAULTS AND REMEDIES Section 6.01. Events of Default. An "Event of Default" with respect to Securities of any series means each one of the events specified below in this Section 6.01, unless it is either inapplicable to a particular series or is specifically deleted or modified as contemplated by Section 2.02 for the Securities of such series, and any other events as may be specified as contemplated by Section 2.02 for the Securities of such series: (1) the Company defaults in the payment of any interest on any Security of that series when the same becomes due and payable and the default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of any Security of that series when the same becomes due and payable at maturity, upon redemption (including default in the making of any mandatory sinking fund payment), upon purchase by the Company at the option of the Holder pursuant to the terms of such Security or otherwise; (3) the Company fails to comply with any of its other agreements in Securities of that series or this Indenture (other than an agreement which has expressly been included in this Indenture solely for the benefit of Securities of any series other than that series or is expressly made inapplicable to the Securities of such series as contemplated by Section 2.02) and the default continues for the period and after the notice specified below; 37 (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case or consents to the commencement of a case against it, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case or adjudicates the Company insolvent or bankrupt, (B) appoints a Custodian of the Company or for all or substantially all of its property, or (C) orders the winding up or liquidation of the Company, and the order or decree remains unstayed and in effect for 90 days; or (6) any other Event of Default provided with respect to Securities of that series occurs. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. A Default under clause (3) is not an Event of Default until the Trustee notifies the Company or the Holders of at least 25% in aggregate principal amount of the outstanding Securities of that series notify the Company and the Trustee of the Default and the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." Section 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(4) or (5)) occurs and is continuing with respect to Securities of any series at the time outstanding, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the 38 outstanding Securities of that series by notice to the Company and the Trustee, may declare to be due and payable immediately (1) the principal amount (or, if Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of Securities of that series) of all of the Securities of that series then outstanding and (2) interest, if any, accrued to the date of acceleration. Upon such declaration, such principal amount (or specified amount) and interest, if any, shall be due and payable immediately. If an Event of Default specified in Section 6.01(4) or (5) occurs and is continuing, (1) the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of the Securities of that series) of all of the Securities of that series then outstanding and (2) interest, if any, accrued to the date of such acceleration, shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or Securityholders. The Holders of a majority in aggregate principal amount of the outstanding Securities of the series with respect to which an acceleration applies by notice to the Trustee may rescind an acceleration and its consequences with respect to such series if all existing Events of Default (other than the non-payment of the principal of and accrued interest, if any, on Securities that have become due solely by such acceleration) with respect to Securities of that series have been cured or waived and if the rescission would not conflict with any judgment or decree. Section 6.03. Other Remedies. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of the whole amount which then shall have become due and remain unpaid for principal or interest, if any, on the Securities of that series and any related coupons or to enforce the performance of any provision of the Securities of that series or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities of that series or any related coupons or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of Securities or related coupons, if any, in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. Section 6.04. Waiver of Existing Defaults. Subject to Section 9.02, the Holders of a majority in aggregate principal amount of the outstanding Securities of any series by notice to the Trustee may waive on behalf of the Holders of all the Securities of such series and any related coupons an existing Default or Event of Default and its consequences. When a Default or Event of Default is waived, it is cured and stops continuing. 39 Section 6.05. Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Securities of any series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it, with respect to the Securities of such series. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture, that is unduly prejudicial to the rights of another Securityholder or that would involve the Trustee in personal liability. Section 6.06. Limitation on Suits. No Holder of any Security of any series or any related coupons shall have the right to pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of at least 25% in aggregate principal amount of the outstanding Securities of that series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer and provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the outstanding Securities of such series. A Securityholder of any series may not use this Indenture to prejudice the rights of another Securityholder of such series or to obtain a preference or priority over another Securityholder of such series, except in the manner herein provided and for the equal and ratable benefit of all Securityholders of such series. Section 6.07. Rights of Holders to Receive Payment and to Convert or Exchange. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security or a coupon to receive payment of principal of and (subject to Sections 2.08 and 2.13) interest, if any, on the Security or payment on such coupon, on or after the respective due dates with respect to such payments expressed in such Security or coupon, and, if applicable, to convert or exchange such Security on the terms and subject to the conditions applicable to Securities of such series, or to bring suit for the enforcement of any such payment on or after such respective dates or of such 40 right to convert or exchange, if any, shall not be impaired or affected without the consent of the Holder. Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(l) or (2) occurs and is continuing with respect to the Securities of any series, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount which then shall have become due and remain unpaid for principal and interest, if any, on the Securities of such series and any related coupons. Section 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders (including the Holders of any coupons) allowed in any judicial proceedings relative to the Company, its creditors or its property and to collect and receive money, property or securities payable or deliverable on any such claims and to distribute the same. Section 6.10. Priorities. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in the case of the distribution of such money on account of principal or interest, upon presentation of the Securities or coupons, or both, as the case may be, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: First: to the Trustee for amounts due under Section 7.07; Second: to the payment of amounts due and unpaid for principal and interest, if any, on the Securities and coupons in respect of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts which then shall have become due and payable on such Securities and coupons for principal and interest, respectively; and Third: to the Company. Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and 41 expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the outstanding Securities of any series. ARTICLE VII TRUSTEE All the provisions of this Article VII apply to the Trustee acting in all its appointed capacities pursuant to this Indenture unless any provision specifically applies to the Trustee only in its capacity as Trustee. Section 7.01. Duties of Trustee. (a) If an Event of Default with respect to Securities of any series has occurred and is continuing, the Trustee shall with respect to such series exercise such of the rights and powers vested in it by this Indenture with respect to such series and use the same degree of care and skill in their exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) With respect to Securities of any series, except during the continuance of an Event of Default with respect to Securities of such series: (1) The Trustee need perform only those duties that are specifically set forth in this Indenture or the TIA and no others. (2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee, however, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) This paragraph does not limit the effect of paragraph (b) of this Section. 42 (2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts. (3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. Section 7.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may consult with counsel or require an Officers' Certificate, an Opinion of Counsel and/or an accountant's certificate. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Certificate, Opinion, or accountant's certificate. (c) The Trustee may act through agents and counsel and shall not be responsible for the misconduct or negligence of any agent or counsel appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and coupons and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, must comply with Sections 7.10 and 7.11. 43 Section 7.04. Trustee's and Authenticating Agent's Disclaimer. Neither the Trustee nor any Authenticating Agent makes any representation as to the validity or adequacy of this Indenture or the Securities or the coupons, if any, appertaining thereto; neither shall be accountable for the Company's use of the proceeds from the Securities; and neither shall be responsible for any statement in the Indenture or the Securities or any coupons other than its certificate of authentication. Section 7.05. Notice of Defaults. If a Default occurs and is continuing with respect to Securities of any series and if it is known to a Trust Officer of the Trustee, the Trustee shall transmit by mail to the Holders of Securities of such series in the manner and to the extent provided in (S)TIA (S) 313(c) notice of the Default within 90 days after it occurs or as soon as reasonably practicable thereafter. Except in the case of a default in payment of principal of or interest on any Security of such series or any related coupons (including default in the making of any mandatory sinking fund or mandatory repurchase payment), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders of such series. Section 7.06. Reports by Trustee to Holders. Within 60 days after each May 15 beginning with the May 15 following the date on which Securities are originally issued under this Indenture, the Trustee shall transmit by mail to the Holders of Securities, in the manner and to the extent provided in (S)TIA (S) 313(c), a brief report dated as of such May 15 that complies with (S)TIA (S) 313(a). The Trustee also shall comply with (S)TIA (S) 313(b). A copy of each report at the time of its mailing to Securityholders shall be filed by the Company with the SEC and each stock exchange on which the Securities are listed. The Company will promptly notify the Trustee if and when the Securities are listed on or delisted from any stock exchange. Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee such compensation as shall have been agreed upon in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred by it. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any loss or liability incurred by it arising out of or in connection with the acceptance or administration of this trust and its duties hereunder. The Trustee shall notify the Company promptly of any claim asserted against the Trustee for which 44 it may seek indemnity. Failure of the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall have the right to elect to defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its written consent. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through the Trustee's negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of or interest on particular Securities. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(4) or (5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section shall survive the termination of this Indenture and the resignation or the removal of the Trustee. Section 7.08. Replacement of Trustee. The Trustee may resign at any time with respect to the Securities of one or more series by so notifying the Company. The Holders of a majority in aggregate principal amount of the outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the removed Trustee and may appoint a successor Trustee with the Company's consent. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee becomes incapable of acting. The Company may remove the Trustee at any time with respect to the Securities of any series upon delivery to the Trustee of a resolution of the Board of Directors to such effect, provided that contemporaneously therewith no Default with respect to the Securities of such series shall have occurred and be continuing. If the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, with respect to the Securities of one or more series, the Company shall promptly appoint a 45 successor Trustee or Trustees (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee (subject to the lien, if any, provided for in Section 7.07), the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall give notice in the manner provided in Section 10.02 of its succession to each Securityholder. If a successor Trustee with respect to the Securities of any series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in aggregate principal amount of the outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee. Section 7.09. Successor Trustee by Merger, etc. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another corporation or national banking association, the successor corporation or national banking association without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. This Indenture shall always have a Trustee who satisfies the requirements of (S)TIA (S) 310(a). The Trustee shall always have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. With respect to the Securities of each series, the Trustee shall comply with (S)TIA (S) 310(b). In determining whether the Trustee has a conflicting interest as defined in TIA (S) 310(b) with respect to the Securities of any series, there shall be excluded from such determination this Indenture with respect to Securities of any particular series of Securities other than that series. Nothing herein shall prevent the Trustee from filing with the SEC the application referred to in the second to last paragraph of TIA (S) 310(b). Section 7.11. Preferential Collection of Claims Against Company. Trustee shall comply with (S)TIA (S) 311(a), excluding any creditor relationship listed in (S) TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated. 46 ARTICLE VIII DISCHARGE OF INDENTURE Section 8.01. Termination of Company's Obligations. The Company may terminate all of its obligations under the Securities of any series and all coupons, if any, appertaining thereto, and this Indenture with respect to the Securities of such series if either (1) all Securities of such series and all coupons, if any, appertaining thereto, previously authenticated and delivered (other than (i) destroyed, lost or wrongfully-taken Securities or coupons which have been replaced or paid as provided in Section 2.09, (ii) Securities or coupons for whose payment money (or, if permitted by the terms of such Securities, securities) has theretofore been held in trust and thereafter repaid to the Company, as provided in Section 8.03, (iii) coupons appertaining to Bearer Securities surrendered for exchange for Registered Securities and maturing after such exchange whose surrender is not required or has been waived as provided in Section 2.08, and (iv) coupons appertaining to Bearer Securities called for redemption and maturing after the relevant redemption date, whose surrender has been waived as provided in Section 3.09), have been delivered to the Trustee for cancellation; or (2) the Company irrevocably deposits in trust with the Trustee money or Government Obligations sufficient to pay the principal of and interest, if any, on all Securities of such series and all coupons, if any, appertaining thereto previously authenticated and delivered, and not theretofore canceled or delivered to the Trustee for cancellation (other than any such Security or coupon referenced in subclauses (i), (ii), (iii), (iv) or (v) of clause (1) above), to maturity or redemption, as the case may be. The Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 7.07, 7.08, 8.01 and 8.03 of this Indenture, however, shall survive until the Securities of such series are no longer outstanding. Thereafter the Company's obligations in Sections 7.07 and 8.03 shall survive. Notwithstanding the satisfaction and discharge of this Indenture with respect to the Securities of any series, if money or Government Obligations shall have been deposited with the Trustee pursuant to clause (2) of this Section, the obligations of the Trustee under Section 8.02 and the second sentence of Section 8.03 shall survive. After a deposit and if all other conditions thereto are met, the Trustee for the Securities of such series and the coupons, if any, appertaining thereto, shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture with respect to such Securities, except for those surviving obligations specified above; provided, however, that the Trustee shall not be required to execute such instrument until the expiration of ninety days after the date of a deposit. In order to have money available on a payment date to pay the principal of or interest, if any, on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option. 47 Section 8.02. Application of Trust Fund. The Trustee shall hold in trust money and Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from the Government Obligations through the Paying Agent and in accordance with the provisions of the Securities, the coupons and this Indenture to the payment of principal of and interest, if any, on the Securities and related coupons, if any, for the payment of which such money or Government Obligations has been deposited with the Trustee. The Company shall pay, and indemnify the Trustee against, any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 8.01 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of outstanding Securities. Section 8.03. Repayment to Company. The Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon written request any money or securities held by them for the payment of principal or interest, if any, that remains unclaimed for two years; provided, however, that the Trustee and the Paying Agent, before being required to make any such payment may at the expense of the Company cause to be published once, in an Authorized Newspaper in each place of payment, notice that such money remains unclaimed and that, after a date specified therein, which date shall not be less than 30 days from such date of such publication, any unclaimed balance of such money then remaining will be paid to the Company. After that, Holders entitled to the money or securities must look to the Company for payment unless an applicable abandoned property law designates another person. ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS Section 9.01. Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities of any series without notice to or consent of any Holder of Securities or coupons or the Holder of any coupons: (1) to cure any ambiguity, defect or inconsistency; (2) to comply with Section 5.01; 48 (3) to establish the form or terms of Securities of any series and any related coupons as permitted by Sections 2.01 and 2.02; (4) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; (5) to add any additional Events of Default (and if such Events of Default are to be applicable to less than all series of Securities, stating that such Events of Default are expressly being included solely to be applicable to such series); (6) to change or eliminate any of the provisions of this Indenture, provided that, except as otherwise contemplated by Section 2.02(22), any such change or elimination shall become effective only when there is no Security outstanding of any series created prior thereto which is entitled to the benefit of such provision; (7) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal of or interest on Bearer Securities, to permit Bearer Securities to be issued in exchange for Registered Securities, or to permit Bearer Securities to be issued in exchange for Bearer Securities of other authorized denominations or to facilitate or permit the issuance of Securities in uncertificated form (so long as any "registration-required obligation" within the meaning of Section 163(f)(2) of the Internal Revenue Code of 1986, as amended (the "Code") is in registered form for purposes of the Code) provided, that any such action shall not adversely affect the interests of Holders of Securities of any series or any related coupons in any material respect; (8) to make any change that, in the opinion of the Board of Directors, does not materially adversely affect the rights of any Securityholder or the Holder of any coupon; or (9) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA. Section 9.02. With Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities of any series without notice to any Holder of Securities or coupons but with the consent of the Holders of a majority in aggregate principal amount of the outstanding Securities of each series affected by such amendment or supplement, by Act of said Holders delivered to the Trustee. The Holders of a majority in aggregate principal amount of the outstanding Securities of any series, by Act of said Holders delivered to the Trustee, may on behalf of the Holders of all Securities of such series and 49 any related coupons waive compliance by the Company with any provision of this Indenture or of Securities of such series without any notice to any Holder of Securities or coupons. Without the consent of the Holder of each outstanding Security affected thereby, however, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04, may not: (1) reduce the amount of Securities of any series whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or extend the time for payment of interest on any Security (or, in the case of an Original Issue Discount Security, reduce the rate of accrual of original issue discount); (3) reduce the principal of (or any premium payable upon the redemption of) or extend the fixed maturity of any Security (or, in the case of an Original Issue Discount Security, reduce the portion of the principal amount that would be due and payable upon acceleration of the maturity thereof pursuant to Section 6.02); (4) change the amount or time of any payment required by any sinking fund provisions of the Securities of any series; (5) make any change that materially adversely affects the right of a Holder to require the Company to purchase a Security in accordance with the terms thereof and this Indenture; (6) waive a default in the payment of principal of or interest, if any, on any Security; (7) make any Security payable in money or securities other than that stated in the Security; (8) make any change that materially adversely affects the right to convert any Security or that increases the conversion price or reduces the conversion rate of any Security; or (9) change any obligation of the Company to maintain an office or agency in the places and for the purposes specified in Section 4.01. It shall not be necessary for the Act of the Holders under this Section to approve the particular form of any proposed supplement or amendment, but it shall be sufficient if such Act approves the substance thereof. An amendment to or supplement of this Indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one 50 or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. Section 9.03. Compliance with Trust Indenture Act. Every amendment to or supplement of this Indenture or the Securities shall comply with the TIA as then in effect. Section 9.04. Effect of Amendments and Supplements. Upon the execution of any amendment or supplement authorized pursuant to this Article, this Indenture shall be modified in accordance therewith, and such amendment or supplement shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder and of any coupon appertaining thereto shall be bound thereby. Section 9.05. Notation on or Exchange of Securities. If an amendment, supplement or waiver changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Section 9.06. Trustee to Sign Amendments, etc. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article if the amendment, supplement or waiver does not adversely affect the rights, duties, immunities or liabilities of the Trustee. If it does, the Trustee may but need not sign it. The Company may not sign an amendment or supplement until the Board of Directors approves it. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. 51 ARTICLE X MISCELLANEOUS Section 10.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by any of TIA (S)(S) 310 to 317, inclusive, through operation of TIA (S) 318(c), such imposed duties shall control. Section 10.02. Notices. Any notice or communication (including any Act of Holders) shall be sufficiently given if in writing and delivered in person or mailed by first- class mail addressed as follows: If to the Company: Tele-Communications, Inc. Terrace Tower II 5619 DTC Parkway Englewood, Colorado 80111-3000 Attention: Treasurer If to the Trustee: Attention: The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Except as otherwise expressly provided herein or otherwise specified with respect to any series of Securities issuable as Bearer Securities pursuant to Section 2.02, where this Indenture provides for notice to Holders of Securities of any event: (1) such notice shall be sufficiently given to Holders of Registered Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Registered Security affected by such event, at his address as it appears in the security register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice; and (2) such notice shall be sufficiently given to Holders of Bearer Securities if published in an Authorized Newspaper in the City of New York and in such other city or 52 cities as may be specified in such Securities on a Business Day at least twice, the first such publication to be not earlier than the earliest date, and not later than the latest date, prescribed for the giving of such notice (except that, for purposes of Section 2.05, notice of the appointment of a successor Authenticating Agent shall be sufficiently given to Holders of Bearer Securities if published as provided herein at least once). In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders of Registered Securities by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders of Registered Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Registered Security shall affect the sufficiency of such notice with respect to other Holders of Registered Securities or the sufficiency of any notice to Holders of Bearer Securities given as provided herein. In case by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearer Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. Neither the failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of any notice to Holders of Registered Securities given as provided herein. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Except for a notice to the Trustee, which is deemed given only when received, if a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. Any notice or communication published in the manner provided above shall be deemed to have been given on the date of publication or, if published more than once, on the date of the first such publication. Any notice or communication required or permitted under this Indenture shall be in the English language, except that any published notice may be in the official language of the country of publication. 53 Section 10.03. Communication by Holders with Other Holders. Securityholders may communicate pursuant to (S)(S)TIA (S) 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of(S) TIA (S) 312(c). Section 10.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent (including any covenants compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent (including any covenants compliance with which constitutes a condition precedent) have been complied with. Section 10.05. Statements Required in Certificate or Opinion. Each Officers' Certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture other than certificates provided pursuant to Section 4.03 shall include: (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. 54 Section 10.06. When Treasury Securities Disregarded. In determining whether the Holders of the required aggregate principal amount of outstanding Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver or taken any other action hereunder, Securities of such series owned by the Company or by any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that for the purpose of determining whether the Trustee shall be protected in relying on such request, demand, authorization, direction, notice, consent, waiver or action, only Securities of such series which the Trustee actually knows are so owned shall be so disregarded. Securities so owned that have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right to so act with respect to such Securities and that the pledgee is not the Company or any Affiliate of the Company. Section 10.07. Rules by Trustee and Agents. Subject to Section 10.15 and Article XI, the Trustee may make reasonable rules for action by or a meeting of Securityholders of all series or any series. The Registrar, Paying Agent, Conversion Agent or Exchange Agent may make reasonable rules for its functions. Section 10.08. Legal Holidays. A "Legal Holiday" with respect to any place of payment or conversion or other location is a Saturday, a Sunday or a day on which banking institutions or trust companies in that place of payment, conversion or other location are not authorized or required to be open. If a payment date or the last day to convert a Security is a Legal Holiday at a place of payment or conversion, payment or conversion may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest or original issue discount, as the case may be, shall accrue for the intervening period. Section 10.09. Governing Law. The internal laws of the State of New York shall govern this Indenture, the Securities and coupons. Section 10.10. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 10.11. No Recourse Against Others. No past, present or future director, officer, employee or stockholder, as such, of the Company or the Trustee or any successor of either thereof shall have any liability for any obligations of the 55 Company or the Trustee under the Securities or any coupons appertaining thereto or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation and all such liability is hereby waived and released. Such waiver and release are part of the consideration for the issue of the Securities. Section 10.12. Successors. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. Section 10.13. Duplicate Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 10.14. Table of Contents, Headings, etc. The table of contents and the titles and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. Section 10.15. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. If Securities of a series are issuable as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders of Securities of such series may, alternatively, be embodied in and evidenced by the record of Holders of Securities of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities of such series duly called and held in accordance with the provisions of Article XI, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 7.01) conclusive in favor of the Trustee and the Company and any agent of the Trustee or the Company, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 11.06. 56 (b) The fact and date of the execution by any person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The ownership, principal amount and serial numbers of outstanding Registered Securities held by any person, and the date of holding the same, shall be proved by the security register. (d) The ownership, principal amount and serial numbers of outstanding Bearer Securities held by any person, and the date of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary, wherever situated, if such certificate shall be deemed by the Trustee to be satisfactory, showing that at the date therein mentioned such person had on deposit with such depositary or exhibited to it, the Bearer Securities therein described, or such facts may be proved by the certificate or affidavit of the person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the Company may assume that such ownership of any Bearer Securities continues until (1) another certificate or affidavit bearing a later date issued in respect of the same Bearer Security is produced, or (2) such Bearer Security is produced to the Trustee by some other person or (3) such Bearer Security is surrendered in exchange for a Registered Security or (4) such Bearer Security is no longer outstanding. The ownership, principal amount and serial numbers of outstanding Bearer Securities held by any person, and the date of holding the same, may also be proved in any other manner which the Trustee deems sufficient. (e) If the Company shall solicit from the Holders of any Registered Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may at its option (but is not obligated to), by or pursuant to a resolution of the Board of Directors, fix in advance a record date for the determination of Holders of Registered Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act. Notwithstanding TIA (S) 316(c), such record date shall be the record date specified in or pursuant to such resolution of the Board of Directors, which shall be a date not earlier than 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of Registered Securities of record at the close of business on such record date shall be deemed to be Holders for the purpose of determining whether Holders of the requisite proportion of outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders of 57 Registered Securities shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date. (f) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind such Holder and every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Security. ARTICLE XI MEETINGS OF HOLDERS OF SECURITIES Section 11.01. Purposes for which Meetings may be Called. If Securities of a series are issuable as Bearer Securities, a meeting of Holders of Securities of such series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series. Section 11.02. Call, Notice and Place of Meetings. (a) The Trustee may at any time call a meeting of Holders of Securities of any series for any purpose specified in Section 11.01, to be held at such time and at such place in the Borough of Manhattan, the City of New York, or in London as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 10.02, not less than 21 nor more than 180 days prior to the date for the meeting. (b) In case at any time the Company pursuant to a resolution of the Board of Directors or the Holders of at least 10% of the aggregate principal amount of outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 11.01, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, the City of New York, or in London for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. 58 Section 11.03. Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Securities of any series, a person shall be (1) a Holder of one or more outstanding Securities of such series, or (2) a person appointed by an instrument in writing as proxy for a Holder or Holders of one or more outstanding Securities of such series by such Holder or Holders. The only persons who shall be entitled to be present or to speak at any meeting of Holder of Securities of any series shall be the persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. Section 11.04. Quorum; Action. The persons entitled to vote a majority of the aggregate principal amount of the outstanding Securities of a series shall constitute a quorum for a meeting of Holders of Securities of such series. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 11.02(a), except that such notice shall be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Except as limited by the third sentence of Section 9.02, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted by the affirmative vote of the Holders of a majority in aggregate principal amount of the outstanding Securities of that series; provided, however, that, except as limited by the third sentence of Section 9.02, any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or other action which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in aggregate principal amount of the outstanding Securities of a series, may be adopted at a meeting or an adjourned meeting duly reconvened at which a quorum is present as aforesaid, by the affirmative vote of the Holders of such specified percentage in aggregate principal amount of the outstanding Securities of that series. Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the related coupons, whether or not present or represented at the meeting. Notwithstanding the foregoing provisions of this Section 11.04, if any action is to be taken at a meeting of Holders of Securities of any series with respect to any request, demand, authorization, direction, notice, consent, waiver or other action that this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage in aggregate principal amount 59 of all outstanding Securities affected thereby, or of the Holders of such series and one or more additional series: (i) there shall be no minimum quorum requirement for such meeting; and (ii) the principal amount of the outstanding Securities of such series that vote in favor of such request, demand, authorization, direction, notice, consent, waiver or other action shall be taken into account in determining whether such request, demand, authorization, direction, notice, consent, waiver or other action has been made, given or taken under this Indenture. Section 11.05. Determination of Voting Rights; Conduct and Adjournment of Meetings. (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of a series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 10.15 and the appointment of any proxy shall be proved in the manner specified in Section 10.15 or by having the signature of the person executing the proxy witnessed or guaranteed by any trust company, bank or banker authorized by Section 10.15 to certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 10.15 or other proof. (b) The Trustee shall by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 11.02(b), in which case the Company or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the persons entitled to vote a majority of the aggregate principal amount of the outstanding Securities of such series represented at the meeting. (c) At any meeting each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000 principal amount of the outstanding Securities of such series held or represented by him, provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy. (d) Any meeting of Holders of Securities of any series duly called pursuant to Section 11.02 at which a quorum is present may be adjourned from time to time by persons entitled to vote 60 a majority of the aggregate principal amount of the outstanding Securities of such series represented at the meeting and the meeting may be held as so adjourned without further notice. Section 11.06. Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amount and serial numbers of the outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 11.02 and, if applicable, Section 11.04. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. 61 SIGNATURES Dated: , TELE-COMMUNICATIONS, INC. By:___________________________________ Attest: (Seal) Dated: , , Trustee By:___________________________________ Attest: (Seal) 62 EX-12 5 CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 TELE-COMMUNICATIONS, INC. AND CONSOLIDATED SUBSIDIARIES Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (amounts in millions, except for ratios) (unaudited)
Three Months Year Ended December 31 Ended March 31 ------------------------------------------ -------------- 1997 1996(b) 1995(b) 1994(b) 1993(b) 1998 1997 ------------------------------------------ -------------- Earnings (losses) before income taxes (860) 563 (311) 230 150 558 (96) Add: Interest on debt 1,246 1,164 1,064 811 738 310 302 Interest portion of rentals 62 64 47 27 23 14 14 Amortization of debt expense 17 16 15 13 12 3 3 Distributions from and losses of less than 50%-owned affiliates with debt not guaranteed by TCI (net of earnings not distributed of less than 50%-owned affiliates) 895 234 183 (21) 37 262 40 Minority interests in earnings (losses) of consolidated subsidiaries (128) (43) (18) (7) 7 (62) 1 Preferred stock dividend requirements of consolidated subsidiaries (a) 70 56 70 20 14 22 20 Dividends on Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debt securities of a subsidiary 132 70 -- -- -- 35 25 ------------------------------------------ -------------- Earnings available for combined fixed charges and preferred stock dividends 1,434 2,124 1,050 1,073 981 1,142 309 ------------------------------------------ -------------- Fixed charges: Interest on debt: TCI and consolidated subsidiaries 1,160 1,096 1,010 785 731 285 289 Less than 50%-owned affiliates with debt guaranteed by TCI 15 12 9 7 -- 7 -- TCI's proportionate share of interest of 50%-owned affiliates 71 56 45 19 7 18 13 ------------------------------------------ -------------- 1,246 1,164 1,064 811 738 310 302 Interest portion of rentals 62 64 47 27 23 14 14 Amortization of debt expense 17 16 15 13 12 3 3 Preferred stock dividend requirements of consolidated subsidiaries (a) 70 56 70 20 14 22 20 Dividends on Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely subordinated debt securities of a subsidiary 132 70 -- -- -- 35 25 Preferred stock dividend requirements of TCI (a) 58 69 58 14 3 19 17 Capitalized interest 7 13 13 16 9 1 1 ------------------------------------------ -------------- Total fixed charges 1,592 1,452 1,267 901 799 404 382 ========================================== ============== Ratio of earnings to combined fixed charges and preferred stock dividends -- 1.46 -- 1.19 1.23 2.83 -- Deficiency (158) -- (217) -- -- -- (73)
(a) Preferred Stock dividend requirements have been increased to an amount representing the pretax earnings which would be required to cover such dividend requirements. The effective income tax rate utilized for purposes of increasing preferred stock dividend requirements in 1993 has been adjusted to exclude the effect of the federal income tax rate change in the third quarter of 1993. (b) Amounts have been restated for the effect of the change in ownership percentages of and methods of accounting for certain investments. TELE-COMMUNICATIONS, INC. AND CONSOLIDATED SUBSIDIARIES Calculation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (amounts in millions, except for ratios) (unaudited) Fixed charges related to interest on debt of less than 50%-owned affiliates or unaffiliated persons guaranteed by TCI have not been included in fixed charges as follows: Year ended December 31, 1997 19 1996 8 1995 8 1994 6 1993 14 Three months ended March 31, 1998 6 1997 5 EX-23.1 6 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Tele-Communications, Inc.: We consent to the incorporation by reference in the registration statement on Form S-3 of Tele-Communications, Inc. of our reports, dated March 20, 1998, relating to the consolidated balance sheets of Tele-Communications, Inc. and subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1997, and all related financial statement schedules, which reports appear in the December 31, 1997 Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to our firm under the heading "Experts" in the registration statement. KPMG Peat Marwick LLP Denver, Colorado June 9, 1998 EX-23.2 7 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Tele-Communications, Inc.: We consent to the incorporation by reference in the registration statement on Form S-3 of Tele-Communications, Inc. of our report, dated March 20, 1998, relating to the combined balance sheets of TCI Group as of December 31, 1997 and 1996, and the related combined statements of operations, equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 1997, which report appears in the December 31, 1997 Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to our firm under the heading "Experts" in the registration statement. Our report covering the combined financial statements refers to the effects of not consolidating TCI Group's interest in Liberty Media Group and the TCI Ventures Group for all periods that TCI Group has an interest in Liberty Media Group and TCI Ventures Group, respectively. KPMG Peat Marwick LLP Denver, Colorado June 9, 1998 EX-23.3 8 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Tele-Communications, Inc.: We consent to the incorporation by reference in the registration statement on Form S-3 of Tele-Communications, Inc. of our report, dated March 20, 1998, relating to the combined balance sheets of Liberty Media Group as of December 31, 1997 and 1996, and the related combined statements of operations, equity, and cash flows for each of the years in the three-year period ended December 31, 1997, which report appears in the December 31, 1997 Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to our firm under the heading "Experts" in the registration statement. KPMG Peat Marwick LLP Denver, Colorado June 9, 1998 EX-23.4 9 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23.4 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders Tele-Communications, Inc.: We consent to the incorporation by reference in the registration statement on Form S-3 of Tele-Communications, Inc. of our report, dated March 20, 1998, relating to the combined balance sheets of TCI Ventures Group as of December 31, 1997 and 1996, and the related combined statements of operations, equity, and cash flows for each of the years in the three-year period ended December 31, 1997, which report appears in the December 31, 1997 Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to our firm under the heading "Experts" in the registration statement. KPMG Peat Marwick LLP Denver, Colorado June 9, 1998 EX-23.5 10 CONSENT OF KPMG AUDIT PLC EXHIBIT 23.5 CONSENT OF INDEPENDENT AUDITORS The Board of Directors and Shareholders Telewest Communications plc: We consent to the incorporation by reference in the registration statement on Form S-3 of Tele-Communications, Inc. of our report, dated March 19, 1998, relating to the consolidated balance sheet of Telewest Communications plc and subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of operations and cash flows for each of the years in the three-year period ended December 31, 1997, which report appears in the December 31, 1997 Annual Report on Form 10-K of Tele-Communications, Inc., and to the reference to our firm under the heading "Experts" in the registration statement. KPMG Audit Plc Chartered Accountants Registered Auditors London, England June 9, 1998 EX-23.6 11 CONSENT OF DELOITTE & TOUCHE LLP EXHIBIT 23.6 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of Tele-Communications, Inc. on Form S-3 of our report dated February 3, 1998, on the consolidated financial statements of Sprint Spectrum Holding Company, L.P. and subsidiaries (which expresses an unqualified opinion and includes an explanatory paragraph referring to the emergence from the development stage of Sprint Spectrum Holding Company, L.P. and subsidiaries) incorporated by reference in the Annual Report on Form 10-K of Tele-Communications, Inc. for the year ended December 31, 1997. We also consent to the reference to us under the heading "Experts" in such Prospectus. Deloitte & Touche LLP Kansas City, Missouri June 9, 1998 EX-23.7 12 CONSENT OF KPMG PEAT MARWICK LLP EXHIBIT 23.7 CONSENT OF INDEPENDENT AUDITORS The Board of Directors Cablevision Systems Corporation We consent to the incorporation by reference in the registration statement on Form S-3 of Tele-Communications, Inc. of our report, dated April 1, 1997, relating to the consolidated balance sheets of Cablevision Systems Corporation and subsidiaries as of December 31, 1996 and 1995, and the related consolidated statements of operations, stockholders' deficiency and cash flows for each of the years in the three-year period ended December 31, 1996, and the related financial statement schedule, which report is incorporated by reference in the Current Report on Form 8-K of Tele-Communications, Inc., dated March 6, 1998, and to the reference to our firm under the heading "Experts" in the registration statement. KPMG Peat Marwick LLP Jericho, New York June 9, 1998 -----END PRIVACY-ENHANCED MESSAGE-----