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EXHIBIT 4.9
DRAFT
01/02/96
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT (this "Guarantee"), dated as of January
__, 1996, is executed and delivered by Tele-Communications, Inc., a Delaware
corporation (the "Parent"), for the benefit of the Holders (as hereinafter
defined) from time to time of the Cumulative Exchangeable Preferred Stock,
Series A (the "Series A Preferred Stock"), of TCI Communications, Inc., a
Delaware corporation (the "Company") and a wholly owned subsidiary of the
Parent.
WITNESSETH:
WHEREAS, the Company is issuing and selling up to 2,300,000
shares of its Series A Preferred Stock in an underwritten offering, and the
Parent desires to issue this Guarantee for the benefit of the Holders, as
provided herein; and
WHEREAS, the Parent desires hereby to unconditionally and
irrevocably agree, on a subordinated basis, to pay to the Holders the Guarantee
Payments (as hereinafter defined) and to perform the other obligations set
forth herein.
NOW, THEREFORE, in consideration of the purchase by each
Holder of the Series A Preferred Stock, which purchase the Parent hereby agrees
shall benefit the Parent, the Parent hereby agrees as follows:
ARTICLE I.
DEFINITIONS
As used in this Guarantee, the terms set forth in this Article
shall have the meanings set forth below. Capitalized terms used in this
Agreement but not otherwise defined herein shall have the meanings ascribed to
such terms in the Certificate of Designations for the Series A Preferred Stock
filed with the Delaware Secretary of State on January __, 1996 (as such
certificate may be amended from time to time, the "Certificate of
Designations"). The Certificate of Designations, as in effect on the date
hereof, is attached hereto as Exhibit A.
"Event of Default" shall mean the occurrence of any of the
following: the failure of the Company (i) to make any portion of a dividend
payment to the Holders, if the payment of such dividend was declared by the
Board of Directors of the Company; (ii) to pay to the Holders of shares of
Series A Preferred Stock outstanding at the close of business
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on the Mandatory Redemption Date the aggregate Mandatory Redemption Price
payable therefor; (iii) to pay to the Holders of shares of Series A Preferred
Stock called for redemption on an Optional Redemption Date the aggregate
Optional Redemption Price payable therefor; or (iv), to pay, in the event of
the dissolution, liquidation or winding up of the Company, to the Holders of
outstanding shares of Series A Preferred Stock on the Liquidating Payment Date
an amount equal to the aggregate Liquidation Preference of such shares.
"Guarantee Average Market Price" as of any Guarantee Payment
Date shall mean the average of the daily Closing Prices for the period of ten
consecutive Trading Days ending on the third Trading Day preceding such
Guarantee Payment Date, appropriately adjusted in such manner as the Parent
Board of Directors in good xxxxx xxxxx appropriate to take into account any
stock dividend on the Series A TCI Group Common Stock, or any subdivision,
split, combination or reclassification of the Series A TCI Group Common Stock
that occurs, or the Ex-Dividend Date for which occurs, during the period
following the first Trading Day in such ten-Trading Day period and ending on
the last full Trading Day immediately preceding the Guarantee Payment Date.
"Guarantee Payments" shall mean the following payments,
without duplication, to the extent not paid by the Company: (v) any accrued and
unpaid dividends which have theretofore been declared by the Board of Directors
of the Company on the Series A Preferred Stock; (vi) the Mandatory Redemption
Price payable for shares of Series A Preferred Stock outstanding at the close
of business on the Mandatory Redemption Date; (vii) the Optional Redemption
Price payable for shares of Series A Preferred Stock called for redemption on
an Optional Redemption Date that are outstanding at the close of business on
such Optional Redemption Date; and (iv) upon a voluntary or involuntary
dissolution, liquidation or winding-up of the Company, the Liquidation
Preference payable in respect of shares of Series A Preferred Stock that are
outstanding at the close of business on the Liquidating Payment Date
(irrespective of whether the Company has unrestricted or legally available
funds therefor).
"Guarantee Cash Equivalent Amount" shall mean an amount equal
to 95% of the Guarantee Average Market Price per share of Series A TCI Group
Common Stock.
"Guarantee Payment Date" shall mean the date on which the
Parent or, subject to Section 2.2(a), the Company makes the aggregate Guarantee
Payment to all holders of outstanding shares of Series A Preferred Stock
entitled thereto.
"Holder" shall mean any Person in whose name a share of Series
A Preferred Stock is registered on the stock transfer books of the Company as
of any date of determination; provided, however, that in determining whether
the Holders of the requisite percentage of Series A Preferred Stock have given
any consent or waiver hereunder, "Holder" shall not include the Parent or any
Subsidiary thereof, either directly or indirectly.
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"Senior Liabilities" shall mean all liabilities of the Parent
other than those in respect of the Parent's capital stock.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint stock company, limited liability company,
trust, unincorporated organization, government or agency or political
subdivision thereof, or other entity, whether acting in an individual,
fiduciary or other capacity.
"Subsidiary" of any Person means a corporation more than 50%
of the outstanding voting stock of which is owned, directly or indirectly, by
such Person or by one or more other Subsidiaries of such Person, or by such
Person and one or more other Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
"Series A TCI Group Common Stock" shall mean the
Tele-Communications Inc. Series A TCI Group Common Stock, par value $1.00 per
share, of the Parent, which term shall include, where appropriate, in the case
of any reclassification, recapitalization or other change in the Series A TCI
Group Common Stock, or in the case of a consolidation or merger of the Parent
with or into another Person affecting the Series A TCI Group Common Stock, such
capital stock to which a holder of Series A TCI Group Common Stock shall be
entitled upon the occurrence of such event.
ARTICLE II.
GUARANTEE
2.1 General. The Parent irrevocably and unconditionally
agrees to pay in full to each Holder, upon the occurrence and during the
continuance of an Event of Default, all Guarantee Payments payable with respect
to the shares of Series A Preferred Stock owned by such Holder, regardless of
any defense, right of set-off or counterclaim which the Company may have or
assert. This Guarantee is continuing, irrevocable, full, unconditional and
absolute from the Issue Date.
2.2 Manner of Making Payment.
(a) The Parent may satisfy its obligation to pay any
amount represented by a Guarantee Payment to a Holder by direct payment of such
amount or, to the extent the Company has immediately available unrestricted
funds available therefor, by causing the Company to pay such amount to such
Holder.
(b) The Parent may satisfy its obligation to make a
Guarantee Payment, at the election of the Parent, (i) in cash, (ii) through the
delivery of shares of Series A TCI Group Common Stock or (iii) through any
combination of the foregoing forms of
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consideration elected by the Parent in its sole discretion.
(c) If the Parent elects to pay to a Holder, in whole or
in part, any Guarantee Payment payable in respect of shares of Series A
Preferred Stock owned by such Holder through the delivery of shares of Series A
TCI Group Common Stock (the portion of any Guarantee Payment paid through the
delivery of such shares being referred to herein as the "Guarantee Stock
Portion"), the number of shares of Series A TCI Group Common Stock to be
delivered shall equal the greater of (i) the same number of shares of Series A
TCI Group Common Stock as such Holder would have received from the Company (x)
had the Company made the dividend, redemption or liquidation payment in respect
of which such Guarantee Payment is being made when originally due through the
delivery of shares of Series A TCI Group Common Stock and (y) had the Company
elected to pay an amount of such payment equal to the Guarantee Stock Portion
with shares of Series A TCI Group Common Stock or (ii) the number of shares of
Series A TCI Group Common Stock determined by dividing the Guarantee Stock
Portion by the Guarantee Cash Equivalent Amount. No fractional shares of
Series A TCI Group Common Stock shall be delivered to a holder of shares of
Series A Preferred Stock, but the Parent shall instead pay a cash adjustment
determined as provided in Section 2.2(d) below. Any portion of a Guarantee
Payment that is not paid through the delivery of shares of Series A TCI Group
Common Stock shall be paid in cash (rounded to the nearest whole cent) through
the delivery of a check from the Parent or, if elected by the Parent pursuant
to Section 2.2(a) above, through the delivery of a check from the Company.
(d) No fractional shares of Series A TCI Group Common
Stock or scrip shall be issued in connection with the delivery of shares of
Series A TCI Group Common Stock in payment, in whole or in part, of any
Guarantee Payment. Whether or not a fractional share would be delivered to a
holder of Series A Preferred Stock shall be based upon the total number of
shares of Series A Preferred Stock owned by such holder with respect to which
such Guarantee Payment is to be made and the total number of shares of Series A
TCI Group Common Stock otherwise deliverable in respect thereof. In lieu of
the issuance of a fraction of a share of Series A TCI Group Common Stock or
scrip, the Parent shall pay instead an amount in cash (rounded to the nearest
whole cent) by its check equal to the same fraction of the Closing Price of a
share of Series A TCI Group Common Stock on the Trading Day immediately
preceding the Guarantee Payment Date.
(e) The Parent's right to elect to make any Guarantee
Payment, in whole or in part, through the issuance and delivery of shares of
Series A TCI Group Common Stock shall be conditioned upon: (i) the shares of
Series A TCI Group Common Stock to be so issued and delivered being fully paid
and nonassessable and free from any preemptive rights, liens or adverse claims;
(ii) the delivery of such shares being exempt from the registration or
qualification requirements of the Securities Act and applicable state
securities laws or, if no such exemption is available, the delivery of such
shares having been duly registered or qualified under the Securities Act and
applicable state securities laws; and (iii) the shares of Series A TCI Group
Common Stock to be issued and delivered being listed,
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and upon delivery being eligible for trading, on the Nasdaq National Market or
on a national securities exchange. If the conditions set forth in clauses (i),
(ii), and (iii) of this Section 2.2(e) have not been satisfied prior or on the
date of any Guarantee Payment, such Guarantee Payment shall be paid solely in
cash.
2.3 Waiver of Certain Rights. The Parent hereby waives
notice of acceptance of this Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
2.4 Obligations Not Affected. The obligations,
covenants, agreements and duties of the Parent under this 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 Company of any express or
implied agreement, covenant, term or condition relating to the Series A
Preferred Stock to be performed or observed by the Company;
(b) the extension of time for the payment by the Company
of all or any portion of the dividends, Redemption Price, Liquidation
Preference or any other sums payable under the terms of the Series A Preferred
Stock or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Series A Preferred Stock;
(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 Series A
Preferred Stock, or any action on the part of the Company 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 Company or any of the assets of the Company;
(e) any invalidity of, or defect or deficiency in, any of
the shares of Series A Preferred Stock; or
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred.
There shall be no obligation of the Holders to give notice to, or obtain any
consent of, the Parent with respect to the happening of any of the foregoing.
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2.5 Holders May Proceed Directly Against Parent. This
Guarantee is a guarantee of payment and not of collection. A Holder may
enforce this Guarantee directly against the Parent, and the Parent waives any
right or remedy to require that any action be brought against the Company or
any other Person before proceeding against the Parent. Subject to Section 2.6
hereof, all waivers herein contained shall be without prejudice to the Holders'
right at the Holders' option to proceed against the Company, whether by
separate action or by joinder. The Parent agrees that this Guarantee shall not
be discharged except by payment of the Guarantee Payments in full.
2.6 Subrogation. The Parent shall be subrogated to all
rights of the Holders against the Company in respect of any amounts paid to the
Holders by the Parent under this Guarantee and shall have the right to waive
payment of any amount of any Guarantee Payment in respect of which payment has
been made to the Holders by the Parent pursuant to Section 2.1 hereof;
provided, however, that the Parent shall not (except to the extent required by
mandatory provisions of law) exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of a payment under this Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee. If any amount
shall be paid to the Parent in violation of the preceding sentence, the Parent
agrees to pay over such amount to the Holders.
2.7 Independent Obligations. The Parent acknowledges
that its obligations hereunder are independent of the obligations of the
Company with respect to the Series A Preferred Stock and that the Parent shall
be liable as principal and sole debtor under this Guarantee to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
of any event referred to in subsections (a) through (f), inclusive, of Section
2.4 hereof.
2.8 Termination. This Guarantee shall terminate as to
each Holder and be of no further force and effect upon the earliest to occur of
(i) the full payment of the Mandatory Redemption Price for all of the shares of
Series A Preferred Stock held by such Holder, (ii) the full payment of the
Optional Redemption Price for all shares of Series A Preferred Stock held by
such Holder that are called for redemption on an Optional Redemption Date, if
after such Optional Redemption Date such Holder no longer holds any outstanding
shares of Series A Preferred Stock, (iii) the payment of the full Liquidation
Preference of the shares of Series A Preferred Stock held by such Holder upon
any liquidation, dissolution or winding up of the Company, (iv) the exchange by
such Holder of shares of Series A Preferred Stock held by it for the requisite
number of shares of Series A TCI Group Common Stock (and cash in lieu of any
fractional share, if any) in accordance with the Certificate of Designations,
and following such exchange such Holder no longer holds any shares of Series A
Preferred Stock; or (v) at such time as such Holder shall otherwise dispose of
all of its shares of Series A Preferred Stock; provided, however, that this
Guarantee shall continue to be effective or shall be reinstated, as the case
may be, if at any time any Holder must restore payment of any sums paid to such
Holder by the Company
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under the Certificate of Designations or by the Parent under this Guarantee for
any reason whatsoever. The Parent agrees to indemnify each Holder and hold it
harmless from and against any loss it may suffer in such circumstances.
ARTICLE III.
CERTAIN COVENANTS OF THE PARENT
3.1 Certain Covenants. The Parent covenants that, for so
long as any shares of Series A Preferred Stock remain outstanding, if there
shall have occurred and be continuing any event that would constitute an Event
of Default hereunder, then the Parent shall not declare or pay any cash
dividend on, make any cash distributions with respect to, or redeem, purchase
or otherwise acquire, any shares of its capital stock; provided, however, that
the Parent may (i) declare cash dividends or cash distributions on, or redeem,
purchase or otherwise acquire, shares of preferred stock of the Parent where,
under the terms of the instrument creating such preferred stock, the failure to
do so would constitute a default or event of default under such instrument and
(ii) redeem, purchase or otherwise acquire shares of preferred stock of the
Parent (x) with shares of common stock of the Parent (plus a cash adjustment
for any fractional shares) or (y) upon the exercise by the holders thereof of
conversion, exchange or redemption rights.
3.2 Merger or Consolidation. The Parent shall not
consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets substantially as an entirety to any other Person, and
the Parent shall not permit any Person to consolidate with or merge into the
Parent or convey, transfer or lease its properties and assets substantially as
an entirety to the Parent, if:
(a) at such time an Event of Default shall have occurred
and be continuing; or
(b) the survivor of such merger, consolidation or share
exchange (if other than the Parent) or the Person to which the Parent's assets
are sold, transferred or leased is not an entity organized under the laws of
the United States or the laws of a State of the United States; or
(c) the survivor of such merger, consolidation or share
exchange (if other than the Parent) or the Person to which the Parent's assets
are sold, transferred or leased does not assume all of the obligations of the
Parent under the Guarantee.
ARTICLE IV.
SUBORDINATION
4.1 Guarantee Payments Subordinated to Senior
Liabilities.
(a) The Parent covenants and agrees, and each Holder of a
share of Series
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A Preferred Stock by his acceptance thereof likewise agrees, that the payment
of the Guarantee Payments is subordinated, to the extent and in the manner
provided in this Article IV, to the prior payment in full of all Senior
Liabilities.
(b) This Article IV shall constitute a continuing offer
to all Persons who, in reliance upon such provisions, become holders of, or
continue to hold, Senior Liabilities, and such provisions are made for the
benefit of the holders of Senior Liabilities, and such holders are made
obligees hereunder and they and/or each of them may enforce such provisions.
4.2 Parent Not to Make Guarantee Payments in Certain
Circumstances.
(a) Upon the maturity of any Senior Liabilities by lapse
of time, acceleration or otherwise, such Senior Liabilities shall first be paid
in full, or such payment duly provided for in cash or in a manner satisfactory
to the holders of such Senior Liabilities, before any payment is made on
account of the Guaranteed Payments.
(b) Upon the happening of any default in payment of any
Senior Liability (after the expiration or lapse of any grace period), unless
and until such default shall have been cured or waived or shall have ceased to
exist, no further payment (in cash or securities) shall be made by the Parent
with respect to the Guarantee Payments.
4.3 Guarantee Payments Subordinated to Prior Payment of
All Senior Liabilities on Dissolution, Liquidation or Reorganization of the
Parent.
(a) Upon any distribution of assets of the Parent in any
dissolution, winding up, liquidation or reorganization of the Parent (whether
in bankruptcy, insolvency or receivership or similar legal proceedings):
(i) the holders of all Senior Liabilities shall
first be entitled to receive payment in full of all amounts
due thereunder before the Holders are entitled to receive any
payment on account of the Guarantee Payments; and
(ii) any payment or distribution of assets of the
Parent of any kind or character, whether in cash, property or
securities (other than securities of the Parent as reorganized
or readjusted or securities of the Parent or any other
corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinate, at least to
the extent provided in this Article IV with respect to this
Guarantee, to the payment in full without diminution or
modification by such plan of all Senior Liabilities), to which
the Holders would be entitled except for the provisions of
this Article IV, shall be paid by the liquidating trustee or
agent or other person making such payment or distribution
directly to the holders of Senior Liabilities or their
representative, or to the trustee under any indenture under
which Senior Liabilities may have been issued, to the extent
necessary to make payment in full of all Senior
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Liabilities remaining unpaid, after giving effect to any concurrent
payment or distribution or provision therefor to the holders of such
Senior Liabilities.
The Parent shall give prompt written notice to all Holders of
any dissolution, winding up, liquidation or reorganization of the Parent.
(b) The consolidation of the Parent with, or the merger
of the Parent into, another corporation or the liquidation or dissolution of
the Parent following the conveyance or transfer of its properties and assets
substantially as an entirety to another Person upon the terms and conditions
set forth in Section 3.2 of this Guarantee shall not be deemed a dissolution,
winding up, liquidation or reorganization of the Parent for the purposes of
this Section 4.3, if the corporation formed by such consolidation or into which
the Parent is merged or the Person which acquires by conveyance or transfer
such properties and assets substantially as an entirety, as the case may be,
shall, as part of such consolidation, merger, conveyance or transfer, comply
with the conditions set forth in Section 3.2.
4.4 Holders of Series A Preferred Stock to be Subrogated
to Rights of Holders of Senior Liabilities.
Subject to the payment in full of all Senior Liabilities, the
Holders shall be subrogated to the extent of the payments or distributions made
to the holders of such Senior Liabilities pursuant to the provisions of this
Article IV to the rights of the holders of such Senior Liabilities to receive
payments or distributions of cash, property or securities of the Parent
applicable to the Senior Liabilities until all Guarantee Payments shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Liabilities of any cash, property or securities to which the
Holders would be entitled except for the provisions of this Article IV, shall,
as between the Parent, its creditors other than holders of Senior Liabilities
and the Holders, be deemed to be a payment or distribution by the Parent to or
on account of Senior Liabilities.
4.5 Obligation of the Parent Unconditional.
Nothing contained in this Article IV is intended to or shall
impair, as between the Parent, its creditors (other than holders of Senior
Liabilities) and the Holders, the obligation of the Parent, which is absolute
and unconditional, to pay to the Holders the Guarantee Payments upon the
occurrence of an Event of Default or is intended to or shall affect the
relative rights of Holders and creditors of the Parent other than the holders
of the Senior Liabilities, nor shall anything herein prevent the Holders from
exercising all remedies otherwise permitted by applicable law upon default
under this Guarantee.
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4.6 Subordination Rights Not Impaired by Acts or
Omissions of the Parent or Holders of Senior Liabilities.
(a) No right of any present or future holders of any
Senior Liabilities to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Parent or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Parent with the terms of this Guarantee,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with.
(b) Without in any way limiting the generality of Section
4.6(a) above, the holders of Senior Liabilities may, at any time and from time
to time, without the consent of or notice to the holders of Series A Preferred
Stock, without incurring responsibility to the Holders, without incurring
responsibility and without impairing or releasing the subordination provided in
this Article IV or the obligations hereunder of the Holders to the holders of
the Senior Liabilities, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Liabilities, or otherwise amend or supplement in any manner
Senior Liabilities or any instrument evidencing the same or any agreement under
which Senior Liabilities is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Liabilities; (iii) release any Person liable in any manner for the
payment or collection of Senior Liabilities; and (iv) exercise or refrain from
exercising any rights against the Parent and any other Person.
4.7 Status of Guarantee. This Guarantee constitutes an
unsecured obligation of the Parent ranking (i) subordinate and junior in right
of payment to all Senior Liabilities, (ii) pari passu with the most senior
preferred stock now or hereafter issued by the Parent and (iii) senior to the
common stock of the Parent.
ARTICLE V.
EXCHANGE PROVISIONS OF SERIES A PREFERRED STOCK
5.1 Compliance with Exchange Provisions. The Parent
covenants and agrees that it will take any and all actions required of it under
the provisions of paragraph (6) of the Certificate of Designations. Without
limiting the generality of the foregoing, the Parent hereby covenants and
agrees as follows:
(a) as promptly as practicable after the Exchange Date
for an exchange of shares of shares of Series A Preferred Stock, to issue and
deliver at the office or agency referred to in subparagraph (6)(a) of the
Certificate of Designations to the Holder of such shares of Series A Preferred
Stock so surrendered for exchange, or on his or her written order, a
certificate or certificates for the number of full shares of Series A TCI Group
Common Stock (and/or any other shares of capital stock of the Parent) issuable
upon such
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exchange in accordance with the provisions of paragraph (6) of the Certificate
of Designations;
(b) to treat the Person in whose name any certificate for
shares of Series A TCI Group Common Stock is issued upon an exchange as the
stockholder of record of such shares of Series A TCI Group Common Stock as of
the close of business on the Exchange Date; provided, however, that any shares
of Series A Preferred Stock surrendered for exchange on any date when the stock
transfer books of the Parent are closed for any purpose shall be effective to
constitute the Person or Persons entitled to receive the shares of Series A TCI
Group Common Stock deliverable upon such exchange as the record holder(s) of
such shares of Series A TCI Group Common Stock as of the opening of business on
the next succeeding day on which such stock transfer books are open (provided
all of the other requirements for a valid exchange are met as of such date);
(c) to use its best efforts to cause the Parent Board of
Directors to make such determinations as may be required of it pursuant to the
provisions of the Certificate of Designations, including pursuant to
subparagraph (6)(b)(iii) of the Certificate of Designations;
(d) whenever the Exchange Rate is required to be adjusted
as provided in paragraph (6) of the Certificate of Designations, to (x)
forthwith compute the adjusted Exchange Rate in accordance with the provisions
of subparagraph (6)(b) of the Certificate of Designations and prepare and file
the certificate required by subparagraph (6)(e) of the Certificate of
Designations at the office of the transfer agent for the Series A TCI Group
Common Stock and the Series A Preferred Stock, and (y) mail to the holders of
the outstanding shares of Series A Preferred Stock the notice required by
subparagraph (6)(e); and
(e) whenever the Parent shall take any action which would
require an adjustment to the Exchange Rate or shall authorize any of the
actions or events described in clause (i) or (ii) of subparagraph (6)(f) of the
Certificate of Designations, to cause to be filed at each office or agency
maintained for the purpose of exchange of the shares of Series A Preferred
Stock, and cause to be mailed to the holders of shares of Series A Preferred
Stock at their last addresses as they shall appear on the stock register of the
Company, at least 10 days before the record date (or other date set for
definitive action if there shall be no record date), the notice required by
subparagraph (6)(f) of the Certificate of Designations.
5.2 Certain Consolidations or Mergers of Parent. The
Parent covenants and agrees not to become a party to any Transaction (as such
term is defined in subparagraph (6)(d) of the Certificate of Designations) in
which shares of Series A TCI Group Common Stock shall be reclassified or
converted into the right to receive stock, securities or other property
(including cash or any combination thereof), unless proper provision shall be
made so that each share of Series A Preferred Stock which is not converted into
the right to receive stock, securities or other property in connection with
such Transaction shall, after
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consummation of such Transaction, be subject to exchange at the option of the
holder into the kind and amount of stock, securities or other property
receivable upon consummation of such Transaction by a holder of the number of
shares of Series A TCI Group Common Stock (and/or any Other Property into which
the Series A Preferred Stock may be exchangeable in accordance with paragraph
(6) of the Certificate of Designations) into which such share of Series A
Preferred Stock might have been exchanged immediately prior to consummation of
such Transaction (assuming in each case that such holder of Series A TCI Group
Common Stock (or such Other Property) failed to exercise rights of election, if
any, as to the kind or amount of stock, securities or other property receivable
upon consummation of such Transaction (provided that if the kind or amount of
stock, securities or other property receivable upon consummation of such
Transaction is not the same for each non-electing share, then the kind and
amount of stock, securities or other property receivable upon consummation of
such Transaction for each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares)).
The provisions of this Section 5.2 shall similarly apply to successive
Transactions.
5.3 Actions in Respect of Series A TCI Group Common
Stock. The Parent covenants and agrees to take such reasonable action which
may, in the opinion of its legal counsel, be necessary in order that (i) the
Parent may validly and legally deliver fully paid and nonassessable shares of
Series A TCI Group Common Stock upon any surrender of shares of Series A
Preferred Stock for exchange pursuant to paragraph (6)(a) of the Certificate of
Designations, (ii) the delivery of such shares is exempt from the registration
or qualification requirements of the Securities Act and applicable state
securities laws or, if no such exemption is available, that the offer and
exchange of such shares of Series A TCI Group Common Stock have been duly
registered or qualified under the Securities Act and applicable state
securities laws, (iii) the shares of Series A TCI Group Common Stock so
delivered upon such exchange are listed for trading on the Nasdaq National
Market or on a national securities exchange (upon official notice of issuance)
and (iv) the shares of Series A TCI Group Common Stock so delivered upon such
exchange are free of preemptive rights and any liens or adverse claims.
5.4 Reservation of Series A TCI Group Common. The Parent
covenants and agrees to at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares
of Series A TCI Group Common Stock and/or its issued Series A TCI Group Common
Stock held in its treasury, for the purpose of effecting any exchange of shares
of Series A Preferred Stock at the option of the holder pursuant to paragraph
(6) of the Certificate of Designations, the full number of shares of Series A
TCI Group Common Stock then deliverable upon the exchange of all then
outstanding shares of Series A Preferred Stock (assuming for this purpose that
all of the outstanding shares of Series A Preferred Stock are held by a single
holder).
5.5 Termination of Obligation to Issue Series A TCI Group
Common Stock. TCI's obligations under this Article V to issue Series A TCI
Group Common Stock shall terminate upon the termination of the right of Holders
of Series A Preferred Stock to
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effect such exchange as set forth in the Certificate of Designations and, with
respect to a particular Holder, upon an exchange of all of the outstanding
shares of Series A Preferred Stock held by such Holder; provided, however, that
such obligations shall be reinstated if at any time any such exchange shall
fail to be effective or shall be required for any reason to be reversed.
ARTICLE VI.
MISCELLANEOUS
6.1 Third Party Beneficiaries. All of the Parent's
obligations under this Guarantee shall be directly enforceable by the Holders
from time to time of the Series A Preferred Stock. Each Holder of Series A
Preferred Stock is an intended third-party beneficiary of this Guarantee.
6.2 Successors and Assigns. All covenants and agreements
contained in this Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Parent and shall inure to the benefit of
the Holders. Except as permitted by Section 2.2(a) and Section 3.2, the Parent
shall not assign its rights or delegate its obligations hereunder without the
prior approval of the Holders of at least 66 2/3% of the shares of Series A
Preferred Stock then outstanding.
6.3 Amendments; Waivers. (a) Except with respect to any
changes which do not adversely affect the rights of Holders (in any of which
cases no vote will be required), this Guarantee may only be amended by an
instrument in writing signed by the Parent with the prior approval of the
Holders of at least 66 2/3% of the shares of Series A Preferred Stock then
outstanding.
(b) Each of the provisions of Article III may be waived,
in whole or in part, or the application of all or any part of such provisions
in any particular circumstance or generally may be waived, in each case with
the prior written consent of the Holders of at least 66 2/3% of the shares of
Series A Preferred Stock then outstanding.
6.4 Notices. Any notice, request or other communication
required or permitted to be given hereunder to the Parent shall be given in
writing by delivering the same against receipt therefor by registered mail,
hand delivery, facsimile transmission (confirmed by registered mail) or telex,
addressed to the Parent, as follows (and if so given, shall be deemed given
when mailed; upon receipt of facsimile confirmation, if sent by facsimile
transmission; or upon receipt of an answer-back, if sent by telex):
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Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, General Counsel
Telecopy: (000) 000-0000
Any notice, request or other communication required or
permitted to be given hereunder to the Holders shall be given by the Parent in
the same manner as notices are sent by the Company to the Holders.
6.5 Genders. The masculine and neuter genders used
herein shall include the masculine, feminine and neuter genders.
6.6 Guarantee Not Separately Transferable. This
Guarantee is solely for the benefit of the Holders and is not separately
transferable from the Series A Preferred Stock.
6.7 GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
6.8 Severability. In case any provision of this
Guarantee shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
6.9 Headings. The Article and section headings herein
are for convenience only and shall not affect the construction hereof.
6.10 Delivery of Guarantee. The Parent shall promptly
deliver a copy of this Guarantee, without charge, to each Holder that shall
request a copy of this Guarantee.
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IN WITNESS WHEREOF, the Parent has caused this Guarantee to be
duly executed as of the day and year first above written.
TELE-COMMUNICATIONS, INC.
By:
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Name:
Title:
ATTEST:
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Secretary
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