Exhibit 4.3
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CAPITAL SECURITIES GUARANTEE AGREEMENT
TCI Communications, Inc.
Dated as of March 14, 1997
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation..........................1
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........................5
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SECTION 2.2 Lists of Holders of Securities..........................5
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SECTION 2.3 Reports by the Capital Guarantee Trustee................5
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SECTION 2.4 Periodic Reports to Capital Guarantee Trustee...........5
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SECTION 2.5 Evidence of Compliance with Conditions Precedent........6
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SECTION 2.6 Events of Default; Waiver...............................6
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SECTION 2.7 Events of Default; Notice...............................6
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SECTION 2.8 Conflicting Interests...................................6
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee......7
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SECTION 3.2 Certain Rights of Capital Guarantee Trustee.............8
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SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee..10
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ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1 Capital Guarantee Trustee; Eligibility.................10
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SECTION 4.2 Appointment, Removal and Resignation
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of Capital Guarantee Trustees..........................11
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee..............................................12
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SECTION 5.2 Waiver of Notice and Demand............................12
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SECTION 5.3 Obligations Not Affected...............................12
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SECTION 5.4 Rights of Holders.......................................13
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SECTION 5.5 Guarantee of Payment....................................14
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SECTION 5.6 Subrogation.............................................14
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SECTION 5.7 Independent Obligations.................................14
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..............................14
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SECTION 6.2 Ranking.................................................15
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination.............................................15
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ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.............................................15
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SECTION 8.2 Indemnification.........................................16
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns..................................17
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SECTION 9.2 Amendments..............................................17
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SECTION 9.3 Notices.................................................17
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SECTION 9.4 Benefit.................................................18
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SECTION 9.5 Governing Law...........................................18
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SECTION 9.6 No Recourse Against Certain Persons.....................18
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ii
CAPITAL SECURITIES GUARANTEE AGREEMENT
This CAPITAL SECURITIES GUARANTEE AGREEMENT (the "Capital
Securities Guarantee"), dated as of March 14, 1997, is executed and delivered
by TCI Communications, Inc., a Delaware corporation (the "Guarantor"), and The
Bank of New York, a New York banking corporation, as trustee (the "Capital
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Capital Securities (as defined herein) of TCI Communications
Financing III, a Delaware statutory business trust (the "Issuer").
WITNESSETH:
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WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of March 14, 1997, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof capital securities, having an aggregate
liquidation amount of $300,000,000 designated the 9.65% Capital Securities (the
"Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Capital Securities Guarantee, to pay to the Holders
of the Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein;
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") with substantially
identical terms as this Capital Securities Guarantee for the benefit of the
holders of the Common Securities (as defined herein) except that if an
Indenture Event of Default (as defined herein) has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of Capital Securities to receive Guarantee Payments under this Capital
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Capital Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Capital
Securities Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
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In this Capital Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Capital Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities Guarantee has
the same meaning throughout;
(c) all references to "the Capital Securities Guarantee" or "this
Capital Securities Guarantee" are to this Capital Securities
Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Capital Securities Guarantee to Articles
and Sections are to Articles and Sections of this Capital
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Capital Securities Guarantee, unless otherwise
defined in this Capital Securities Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
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405 of the Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday, a Sunday or any
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other day on which banking institutions in New York, New York are authorized or
required by law to close.
"Capital Guarantee Trustee" means The Bank of New York, until
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a Successor Capital Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Capital Securities Guarantee and
thereafter means each such Successor Capital Guarantee Trustee.
"Common Securities" means the securities representing common
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undivided beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial owner of Capital
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Securities.
"Event of Default" means a default by the Guarantor on any of
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its payment or other obligations under this Capital Securities Guarantee.
"Guarantee Payments" means the following payments or
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distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
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such Capital Securities, to the extent the Issuer has funds available therefor,
(ii) the redemption price, including all accrued and unpaid Distributions to the
date of redemption (the "Redemption Price"), to the extent the Issuer has funds
available therefor, with respect to any Capital Securities called for redemption
by the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with the distribution of
Subordinated Notes to the Holders in exchange for Capital Securities as provided
in the Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid Distributions on the Capital Securities to the date
of payment, to the extent the Issuer shall have funds available therefor, and
(b) the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Indenture Event of Default has occurred and is continuing,
the rights of holders of the Common Securities to receive payments under the
Common Securities Guarantee are subordinated to the rights of Holders of Capital
Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
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records of the Issuer, of any Capital Securities; provided, however, that, in
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determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Capital Guarantee Trustee, any
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Affiliate of the Capital Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives or agents of the
Capital Guarantee Trustee.
"Indenture" means the Indenture dated as of January 29, 1996,
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among the Guarantor and The Bank of New York, as trustee, and the Third
Supplemental Indenture thereto pursuant to which certain subordinated debt
securities of the Guarantor are to be issued to the Property Trustee (as defined
in the Declaration).
"Indenture Event of Default" has the same meaning as that
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given to the term "Event of Default" in the Indenture.
"Majority in liquidation amount of the Securities" means,
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except as provided by the Trust Indenture Act, a vote by Holder(s) of Capital
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all Capital Securities
outstanding as of the date of determination.
"Officers' Certificate" means, with respect to any Person, a
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certificate signed by two Authorized Officers (as defined in the Declaration) of
such Person. Any Officers' Certificate delivered with respect to compliance with
a condition or covenant provided for in this Capital Securities Guarantee shall
include:
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(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
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corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Capital
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Guarantee Trustee, any vice president, any assistant vice president, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the corporate trust
department of the Capital Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Subordinated Notes" means the series of subordinated debt
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securities of the Guarantor designated the 9.65% Subordinated Deferrable
Interest Notes due March 31, 2027 held by the Property Trustee.
"Successor Capital Guarantee Trustee" means a successor
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Capital Guarantee Trustee possessing the qualifications to act as Capital
Guarantee Trustee under Section 4.1.
"TCI" means Tele-Communications, Inc., a Delaware corporation.
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as
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amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
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(a) This Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Capital Securities Guarantee and shall, to the extent applicable, be governed by
such provisions.
(b) If and to the extent that any provision of this Capital
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
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(a) The Guarantor shall provide the Capital Guarantee
Trustee with a list, in such form as the Capital Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Capital
Securities ("List of Holders") (i) as of January 1 and June 30 of each year,
within one Business Day thereafter, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request from the Capital Guarantee Trustee
for a List of Holders, which shall be as of a date no more than 14 days before
such List of Holders is given to the Capital Guarantee Trustee; provided, that
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the Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Capital Guarantee Trustee by the Guarantor. The Capital Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Capital Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Capital Guarantee Trustee
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Within 60 days after May 15 of each year, the Capital
Guarantee Trustee shall provide to the Holders of the Capital Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Capital Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Guarantee Trustee
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The Guarantor shall provide to the Capital Guarantee Trustee
such documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by
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Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
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The Guarantor shall provide to the Capital Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Capital Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
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The Holders of a Majority in liquidation amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Capital Securities Guarantee, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Events of Default; Notice
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(a) The Capital Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Capital Securities, notices of all Events of
Default known to the Capital Guarantee Trustee, unless such defaults have been
cured before the giving of such notice; provided, that the Capital Guarantee
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Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Capital Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Capital Securities.
(b) The Capital Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Capital Guarantee Trustee shall
have received written notice, or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice, of such
Event of Default.
SECTION 2.8 Conflicting Interests
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The Declaration shall be deemed to be specifically described
in this Capital Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Guarantee Trustee
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(a) This Capital Securities Guarantee shall be held by the
Capital Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Capital Guarantee Trustee shall not transfer this Capital
Securities Guarantee to any Person except a Holder of Capital Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor
Capital Guarantee Trustee on acceptance by such Successor Capital Guarantee
Trustee of its appointment to act as Successor Capital Guarantee Trustee. The
right, title and interest of the Capital Guarantee Trustee shall automatically
vest in any Successor Capital Guarantee Trustee, and such vesting (and cessation
as to the Capital Guarantee Trustee) of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Capital Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Capital Guarantee Trustee shall enforce this Capital Securities Guarantee
for the benefit of the Holders of the Capital Securities.
(c) The Capital Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Capital Securities Guarantee, and no implied covenants shall be
read into this Capital Securities Guarantee against the Capital Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6), the Capital Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Capital Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Capital Securities Guarantee shall
be construed to relieve the Capital Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Capital
Guarantee Trustee shall be determined solely by the express
provisions of this Capital Securities Guarantee, and the Capital
Guarantee Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in
this Capital Securities
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Guarantee, and no implied covenants or obligations shall be
read into this Capital Securities Guarantee against the
Capital Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Capital Guarantee Trustee, the Capital Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Capital Guarantee
Trustee and conforming to the requirements of this Capital
Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Capital Guarantee
Trustee, the Capital Guarantee Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this Capital Securities Guarantee;
(ii) the Capital Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Capital Guarantee Trustee, unless it shall be proved that the Capital
Guarantee Trustee was negligent in ascertaining the pertinent facts
upon which such judgment was made;
(iii) the Capital Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Capital Guarantee Trustee, or exercising any trust or
power conferred upon the Capital Guarantee Trustee under this Capital
Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee shall
require the Capital Guarantee Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if
the Capital Guarantee Trustee shall have reasonable grounds for
believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Capital Securities
Guarantee or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Guarantee Trustee
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(a) Subject to the provisions of Section 3.1:
(i) The Capital Guarantee Trustee may rely, and shall be
fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by
this Capital Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Capital Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Capital Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Capital Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
(v) The Capital Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Capital Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Capital Securities Guarantee from any court of
competent jurisdiction.
(vi) The Capital Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Capital Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Capital Guarantee Trustee
such adequate security and indemnity as would satisfy a reasonable
person in the position of the Capital Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Capital Guarantee Trustee; provided that, nothing contained in this
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Section 3.2(a)(vi) shall be taken to relieve the Capital Guarantee
Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Capital
Securities Guarantee.
(vii) The Capital Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Capital Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Capital Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys,
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and the Capital Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Capital Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital Securities, and
the signature of the Capital Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No third
party shall be required to inquire as to the authority of the Capital
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Capital Securities Guarantee, both of
which shall be conclusively evidenced by the Capital Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Capital
Securities Guarantee the Capital Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Capital Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Capital Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in acting in
accordance with such instructions.
(b) No provision of this Capital Securities Guarantee shall
be deemed to impose any duty or obligation on the Capital Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Capital Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Capital Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
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The recitals contained in this Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Guarantee
Trustee does not assume any responsibility for their correctness. The Capital
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Capital Securities Guarantee.
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1 Capital Guarantee Trustee; Eligibility
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(a) There shall at all times be a Capital Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
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(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Capital Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital Guarantee
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Trustees
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(a) Subject to Section 4.2(b), the Capital Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Capital Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Capital Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Capital Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall
hold office until a Successor Capital Guarantee Trustee shall have been
appointed or until its removal or resignation. The Capital Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Guarantee Trustee and delivered to
the Guarantor, which resignation shall not take effect until a Successor Capital
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor and the resigning Capital Guarantee Trustee.
(d) If no Successor Capital Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of resignation or removal, the Capital
Guarantee Trustee resigning or being removed may petition
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any court of competent jurisdiction for appointment of a Successor Capital
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
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The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
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The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
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The obligations, covenants, agreements and duties of the
Guarantor under this Capital Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relat ing to the Capital Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Capital Securities (other than an
extension of time for payment of Distributions or other sum payable that results
from the extension of any interest payment period on the Subordinated Notes
permitted by the Indenture);
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(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obliga tions of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
-----------------
(a) The Holders of a Majority in liquidation amount of the
Capital Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Capital Guarantee
Trustee in respect of this Capital Securities Guarantee or exer cising any trust
or power conferred upon the Capital Guarantee Trustee under this Capital
Securities Guarantee.
(b) If the Capital Guarantee Trustee fails to enforce this
Capital Securities Guarantee, any Holder of Capital Securities may institute a
legal proceeding directly against the Guarantor to enforce its rights under this
Capital Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Capital Guarantee Trustee or any other Person.
(c) Notwithstanding subsection 5.4(b), any Holder of Capital
Securities may directly institute proceedings against the Guarantor to obtain
Guarantee Payments in respect of the Capital Securities owned by such Holder,
without first waiting to determine if the Capital Guarantee Trustee has enforced
this Capital Securities Guarantee or first instituting a legal proceeding
against the Issuer, the Capital Guarantee Trustee or any other Person.
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SECTION 5.5 Guarantee of Payment
--------------------
This Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Capital Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Capital
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Capital Securities Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Holders.
SECTION 5.7 Independent Obligations
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Capital
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
--------------------------
(a) So long as any Capital Securities remain outstanding, if
there shall have occurred an Event of Default or Indenture Event of Default,
then (a) the Guarantor shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its capital stock, and (b) the Guarantor shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Subordinated Notes.
(b) Notwithstanding subsection 6.1(a) or any other language
to the contrary contained in this Capital Securities Guarantee, nothing shall
prevent the Guarantor from: (i) de claring or paying any dividend on, or making
any distribution with respect to, or redeeming,
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purchasing, acquiring or making a liquidation payment with respect to, any of
its capital stock in or with (x) securities of the Guarantor (including capital
stock) that rank junior to such capital stock or (y) securities (including
capital stock) of TCI or (ii) paying any interest, principal or premium on, or
repaying, repurchasing or redeeming, any debt securities issued by the Guarantor
which rank pari passu with or junior to the Subordinated Notes, with (x)
securities of the Guarantor (including capital stock) that rank junior to such
debt securities or (y) securities (including capital stock) of TCI.
SECTION 6.2 Ranking
-------
This Capital Securities Guarantee constitutes an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with (x) the
most senior preferred or preference stock issued by the Guarantor from time to
time and with any guarantee now or hereafter entered into by the Guarantor in
respect of any preferred or preference stock of any Affiliate of the Guarantor
and (y) the guarantees of the Guarantor with respect to the 8.72% Subordinated
Deferrable Interest Notes due January 31, 2045 and the 10% Subordinated
Deferrable Interest Notes due May 31, 2045 of the Guarantor, and (iii) senior to
the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
-----------
This Capital Securities Guarantee shall terminate upon the
earliest to occur of (i) the full payment of the Redemption Price of all Capital
Securities, (ii) the distribution of Subordinated Notes to the Holder(s) of all
of the Capital Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Capital Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of Capital
Securities must restore payment of any sums paid under the Capital Securities or
under this Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this Capital
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Capital Securities Guarantee or by law, except that an
Indemnified Person shall be liable for
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any such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omission.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions, the Redemption Price or the
Liquidation Distribution to Holders of Capital Securities might properly be
paid.
(c) The provisions of this Section 8.1 shall survive the
termination of this Capital Securities Guarantee.
SECTION 8.2 Indemnification
---------------
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Capital Securities Guarantee and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person in accordance with this Capital Securities
Guarantee, except that no Indemnified Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding (whether such claim,
demand, action, suit or proceeding arises between the parties hereto or results
from suits involving third parties) shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The provisions of this Section 8.2 shall survive the
termination of this Capital Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------
All guarantees and agreements contained in this Capital
Securities Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding.
SECTION 9.2 Amendments
----------
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Capital Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount of the
Capital Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
SECTION 9.3 Notices
-------
All notices provided for in this Capital Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Capital Guarantee Trustee, at the
Capital Guarantee Trustee's mailing address set forth below (or such other
address as the Capital Guarantee Trustee may give notice of to the Holders of
the Capital Securities):
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Trustee Administration
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Capital Securities):
TCI Communications, Inc.
Terrace Tower II
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(c) If given to any Holder of Capital Securities, at the
address set forth on the books and records of the Issuer.
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All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
-------
This Capital Securities Guarantee is solely for the benefit of
the Holders of the Capital Securities and, subject to Section 3.1(a), is not
separately transferable from the Capital Securities.
SECTION 9.5 Governing Law
-------------
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 9.6 No Recourse Against Certain Persons
-----------------------------------
No past, present or future director, officer, employee or
stockholder, as such, of the Guarantor or any successor thereof shall have any
liability for any obligations of the Guarantor under this Capital Securities
Guarantee 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
this Capital Securities Guarantee and the Capital Securities.
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THIS CAPITAL SECURITIES GUARANTEE AGREEMENT is executed as of
the day and year first above written.
TCI COMMUNICATIONS, INC., as
Guarantor
By:
--------------------------
Name:
Title:
THE BANK OF NEW YORK, as
Capital Guarantee Trustee
By:
---------------------------
Name:
Title:
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