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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 1994
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TELEPHONE AND DATA SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Iowa 1-8251 36-2669023
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
30 North LaSalle Street, Chicago, Illinois 60602
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (312) 630-1900
Not Applicable
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(Former name or former address, if changed since last report)
The Exhibit Index is Located on Page of Total Pages.
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Item 5. Other Events.
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This Current Report on Form 8-K is being filed for the
purpose of filing the Form of Selling Agency Agreement for Debt
Securities as an exhibit.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
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The exhibit accompanying this report is listed in the
accompanying Exhibit Index.
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Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereto duly authorized.
Telephone and Data Systems, Inc.
(Registrant)
Date: April 22, 1994
By: /s/ GREGORY J. WILKINSON
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Gregory J. Wilkinson
Vice President and Controller
(principal accounting officer)
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EXHIBIT INDEX
Sequentially
Exhibit Number Description of Exhibit Numbered Page
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99 Form of Selling Agency
Agreement for Debt Securities _____
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Telephone and Data Systems, Inc.
$150,000,000 Medium-Term Notes, Series C
Due From Nine Months to Thirty Years
From Date of Issue
Selling Agency Agreement
April 21, 1994
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center - North Tower
New York, New York 10281
Dear Sirs:
Telephone and Data Systems, Inc., an Iowa corporation (the
"Company"), confirms its agreement with each of you with respect
to the issue and sale by the Company of up to $150,000,000
aggregate principal amount of its Medium-Term Notes, Series C,
Due from Nine Months to Thirty Years from Date of Issue (the
"Notes"). The Notes will be issued under an indenture (the
"Indenture") dated as of February 1, 1991, between the Company
and Harris Trust and Savings Bank, as trustee (the "Trustee").
Unless otherwise specifically provided for and set forth in a
Pricing Supplement (as defined below), the Notes will be issued
in minimum denominations of $1,000 and in denominations exceeding
such amount by integral multiples of $1,000, will be issued only
in fully registered form and will have the interest rates,
maturities and, if appropriate, other terms set forth in such
Pricing Supplement. The Notes will be issued, and the terms
thereof established, in accordance with the Indenture and the
Medium-Term Notes Administrative Procedures attached hereto as
Exhibit A (the "Procedures") (unless a Terms Agreement (as
defined in Section 2 (b)) modifies or otherwise supersedes such
Procedures with respect to the Notes issued pursuant to such
Terms Agreement). The Procedures may be amended only by written
agreement of the Company and you after notice to, and with the
approval of, the Trustee. For the purposes of this Agreement,
the term "Agent" shall refer to any of you acting solely in the
capacity as agent for the Company pursuant to Section 2(a) and
not as principal (collectively, the "Agents"), the term
"Purchaser" shall refer to one of you acting solely as principal
pursuant to Section 2(b) and not as agent, and the term "you"
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shall refer to you collectively whether at any time any of you is
acting in both such capacities or in either such capacity. In
acting under this Agreement, in whatever capacity, each of you is
acting individually and not jointly.
1. Representations and Warranties. The Company represents
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and warrants to, and agrees with, you as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in
paragraph (e) hereof.
(a) The Company meets the requirements for use of Form
S-3 under the Securities Act of 1933 (the "Act") and has
filed with the Securities and Exchange Commission (the
"Commission") a registration statement on such Form (File
Number: 33-68456), including a basic prospectus, which has
become effective, for the registration under the Act of
$300,000,000 aggregate offering price of debt securities
(the "Securities"), including the Notes, and a basic
prospectus for the registration under the Act of common
shares. Such registration statement, as amended at the date
of this Agreement, meets the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and complies in all other
material respects with said Rule. The Company has included
in such registration statement, or has filed or will file
with the Commission pursuant to the applicable paragraph of
Rule 424(b) under the Act, a supplement to the form of Basic
Prospectus relating to the Notes and the plan of
distribution thereof (the "Prospectus Supplement"). In
connection with the sale of Notes the Company proposes to
file with the Commission pursuant to the applicable
paragraph of Rule 424(b) under the Act further supplements
to the Prospectus Supplement (each a "Pricing Supplement")
specifying the interest rates, maturity dates and, if
appropriate, other terms of the Notes sold pursuant hereto
or the offering thereof.
(b) As of the Execution Time, on the Effective Date,
when any supplement to the Prospectus is filed with the
Commission, as of the date of any Terms Agreement and at the
date of delivery by the Company of any Notes sold hereunder
(a "Closing Date"), (i) the Registration Statement, as
amended as of any such time, and the Prospectus, as
supplemented as of any such time, and the Indenture will
comply in all material respects with the applicable
requirements of the Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and
the respective rules thereunder; (ii) the Registration
Statement, as amended as of any such time, did not or will
not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein not
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misleading; and (iii) the Prospectus, as supplemented as of
any such time, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations
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or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or
the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to
the Company by or on behalf of any of you specifically for
inclusion in the Registration Statement or the Prospectus
(or any supplement thereto).
(c) As of the time any Notes are issued and sold
hereunder, the Indenture will constitute a legal, valid and
binding instrument enforceable against the Company in
accordance with its terms and such Notes will have been duly
authorized, executed, authenticated and, when paid for by
the purchasers thereof, will constitute legal, valid and
binding obligations of the Company entitled to the benefits
of the Indenture.
(d) Since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse
change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated
by the Prospectus (exclusive of any supplement thereto).
(e) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term "the
Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall
mean the form of basic prospectus relating to the Securities
contained in the Registration Statement at the Effective
Date, as modified by the form of the basic prospectus
relating to the Securities dated the date hereof.
"Prospectus" shall mean the Basic Prospectus as supplemented
by the Prospectus Supplement. "Registration Statement"
shall mean the registration statement referred to in
paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the
Execution Time. "Rule 415" and "Rule 424" refer to such
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rules under the Act. Any reference herein to the
Registration Statement, the Basic Prospectus, the Prospectus
Supplement 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 which were filed under the
Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as
the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to
be incorporated therein by reference.
(f) Except as described in "Item 3. Legal Proceedings
- LaStar Application" in the Company's Annual Report on Form
10-K for the year ended December 31, 1993, the Company and
its subsidiaries hold all material permits, licenses,
franchises and rights with respect to the foregoing
necessary for the present conduct of their respective
businesses without any known conflict with the rights of
others, and, with the foregoing exception, no action or
proceeding is pending, or, to the knowledge of such counsel
after due inquiry, threatened, to suspend, revoke or modify
any thereof, which action or proceeding, if adversely
determined, will materially and adversely affect the
business, earnings, properties or condition (financial or
otherwise) of the Company and its subsidiaries, considered
on a consolidated basis.
(g) No material default exists, and no event has
occurred which, with notice or after the lapse of time to
cure or both, would constitute a material default in the due
performance and observance of any term, covenant or
condition contained in (i) any material indenture, mortgage,
deed of trust, loan agreement, guaranty, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or to which any of them or their
respective properties is subject; or (ii) any material
agreement or instrument to which the Company or any
subsidiary is a party or by which the Company or any
subsidiary is bound, which default might materially
adversely affect the business, earnings, properties or
condition (financial or otherwise) of the Company and its
subsidiaries, considered on a consolidated basis.
2. Appointment of Agents; Solicitation by the Agents of
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Offers to Purchase; Sales of Notes to a Purchaser. (a) Subject
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to the terms and conditions set forth herein, the Company hereby
authorizes each of the Agents to act as its agent to solicit
offers for the purchase of all or part of the Notes from the
Company.
On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the
Agents agrees, as agent of the Company, to use its reasonable
best efforts to solicit offers to purchase the Notes from the
Company upon the terms and conditions set forth in the Prospectus
(and any supplement thereto) and in the Procedures. Each Agent
shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has
been solicited by such Agent and accepted by the Company, but
such Agent shall not, except as otherwise provided in this
Agreement, be obligated to disclose the identity of any purchaser
or have any liability to the Company in the event any such
purchase is not consummated for any reason. Except as provided
in Section 2(b), under no circumstances will any Agent be
obligated to purchase any Notes for its own account. It is
understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to
instruct either or both of the Agents to suspend at any time, for
any period of time or permanently, the solicitation of offers to
purchase the Notes. Upon receipt of instructions from the
Company, such Agent or Agents will forthwith suspend solicitation
of offers to purchase Notes from the Company until such time as
the Company has advised it or them that such solicitation may be
resumed.
The Company agrees to pay each Agent a commission, on the
Closing Date with respect to each sale of Notes by the Company as
a result of a solicitation made by such Agent, in an amount equal
to that percentage specified in Schedule I hereto of the
aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by
an Agent as agent for the Company at such time and in such
amounts as such Agent deems advisable. The Company may from time
to time offer Notes for sale otherwise than through an Agent;
provided, however, that so long as this Agreement shall be in
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effect the Company shall not solicit offers to purchase Notes
through any agent other than an Agent. The Company may accept an
offer to purchase Notes through an agent other than an Agent,
provided that (i) the Company did not solicit such offer, (ii)
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the Company and such agent execute an agreement with respect to
such purchase having terms and conditions (including, without
limitation, commission rates) with respect to such purchase
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identical to the terms and conditions that would apply to such
purchase under this Agreement if such agent was an Agent (which
may be accomplished by incorporating by reference in such
agreement the terms and conditions of this Agreement), (iii) such
agreement shall not provide for further offers or purchases and
(iv) the Company shall provide the Agents with a copy of such
agreement promptly following such purchase.
(b) Subject to the terms and conditions stated herein,
whenever the Company and any Agent determines that the Company
shall sell Notes directly to such Agent as Purchaser, each such
sale of Notes shall be made in accordance with the terms of this
Agreement and, unless otherwise agreed by the Company and such
Agent, any supplemental agreement relating to such sale between
the Company and the Purchaser. Each such supplemental agreement
(which may be either an oral or written agreement) is herein
referred to as a "Terms Agreement." Any such oral Terms
Agreement shall be confirmed promptly in a writing substantially
in the form of Exhibit B, and any such written Terms Agreement
shall be substantially in the form of Exhibit B. Each Terms
Agreement shall describe the Notes to be purchased by the
Purchaser pursuant thereto and shall specify the aggregate
principal amount of such Notes, the price to be paid to the
Company for such Notes, the maturity date of such Notes, the rate
at which interest will be paid on such Notes, the Closing Date
for the purchase of such Notes, the place of delivery of the
Notes and payment therefor, the method of payment and any
modification of the requirements for the delivery of the opinions
of counsel, the certificates from the Company or its officers,
and the letter from the Company's independent public accountants,
pursuant to Section 6(b). Such Terms Agreement shall also
specify the period of time referred to in Section 4(m).
The Purchaser's commitment to purchase Notes pursuant to any
Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein
set forth.
Delivery of the certificates for Notes sold to the Purchaser
pursuant to a Terms Agreement shall be made not later than the
Closing Date set forth in such Terms Agreement, against payment
of funds to the Company in the net amount due to the Company for
such Notes by the method and in the form set forth in the
Procedures unless otherwise agreed to between the Company and the
Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the
Purchaser in a Terms Agreement, any Note sold to a Purchaser (i)
shall be purchased by such Purchaser at a price equal to 100% of
the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical
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maturity and (ii) may be resold by such Purchaser at varying
prices from time to time or, if set forth in the applicable Terms
Agreement and Pricing Supplement, at a fixed public offering
price. In connection with any resale of Notes purchased, a
Purchaser may use a selling or dealer group and may reallow to
any broker or dealer any portion of the discount or commission
payable pursuant hereto.
3. Offering and Sale of Notes. Each Agent and the Company
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agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
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(a) Prior to the termination of the offering of the
Notes (which shall include the resale by the Purchasers of
Notes purchased pursuant to Terms Agreements), the Company
will not file any amendment of the Registration Statement or
supplement to the Prospectus (except for (i) periodic or
current reports filed under the Exchange Act, (ii) a
supplement relating to any offering of Notes providing
solely for the specification of or a change in the maturity
dates, interest rates, issuance prices or other similar
terms of any Notes or (iii) a supplement relating to an
offering of Securities other than the Notes) unless the
Company has furnished each of you a copy for your review
prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or
supplement. Subject to the foregoing sentence, the Company
will cause each supplement to the Prospectus to be filed
with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed thereby and
will provide evidence satisfactory to you of such filing.
The Company will promptly advise each of you (i) when the
Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b),
(ii) when, prior to the termination of any offering of the
Notes, any amendment of the Registration Statement shall
have been filed or become effective, (iii) of any request by
the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any
additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening
of any proceeding for that purpose and (v) of the receipt by
the Company of any notification with respect to the
suspension of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal
thereof.
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(b) If, at any time when a prospectus relating to the
Notes is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if it shall be necessary to amend the Registration Statement
or to supplement the Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the
Company promptly will (i) notify each of you to suspend
solicitation of offers to purchase Notes (and, if so
notified by the Company, each of you shall forthwith suspend
such solicitation and cease using the Prospectus as then
supplemented), (ii) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and
(iii) supply any supplemented Prospectus to each of you in
such quantities as you may reasonably request. If such
amendment or supplement, and any documents, certificates and
opinions furnished to each of you pursuant to paragraph (g)
of this Section 4 in connection with the preparation or
filing of such amendment or supplement, are reasonably
satisfactory in all material respects to you, you will, upon
the filing of such amendment or supplement with the
Commission and upon the effectiveness of an amendment to the
Registration Statement, if such an amendment is required,
resume your obligation to solicit offers to purchase Notes
hereunder.
(c) The Company, during the period when a prospectus
relating to the Notes is required to be delivered under the
Act, will file promptly all documents required to be filed
with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act and will furnish to each of you
copies of such documents. In addition, on or prior to the
date on which the Company makes any announcement to the
general public concerning earnings or concerning any other
event which is required to be described, or which the
Company proposes to describe, in a document filed pursuant
to the Exchange Act, the Company will furnish to each of you
the information contained or to be contained in such
announcement. The Company also will furnish to each of you
copies of all other press releases or announcements made by
it to the general public. The Company will immediately
notify each of you of any downgrading in the rating of the
Notes or any other debt securities of the Company, or any
proposal to downgrade the rating of the Notes or any other
debt securities of the Company, by any "nationally
recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), as soon as the
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Company learns of any such downgrading or proposal to
downgrade.
(d) As soon as practicable, the Company will make
generally available to its security holders and to each of
you an earnings statement or statements of the Company and
its subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your
counsel, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as
delivery of a prospectus may be required by the Act, as many
copies of the Prospectus and any supplement thereto as you
may reasonably request.
(f) The Company will arrange for the qualification of
the Notes for sale under the laws of such jurisdictions as
any of you may designate, will maintain such qualifications
in effect so long as required for the distribution of the
Notes, and will arrange for the determination of the
legality of the Notes for purchase by institutional
investors.
(g) The Company shall furnish to each of you such
information, documents, certificates of officers of the
Company and opinions of counsel for the Company customarily
furnished in connection with Medium-Term Note programs of
the nature contemplated herein, relating to the business,
operations and affairs of the Company, the Registration
Statement, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this
Agreement, the Procedures and the performance by the Company
and you of its and your respective obligations hereunder and
thereunder as any of you may from time to time and at any
time prior to the termination of this Agreement reasonably
request.
(h) The Company shall, whether or not any sale of the
Notes is consummated, (i) pay all expenses incident to the
performance of its obligations under this Agreement and any
Terms Agreement, including the fees and disbursements of its
accountants and counsel, the cost of printing or other
production and delivery of the Registration Statement, the
Prospectus, all amendments thereof and supplements thereto,
the Indenture, this Agreement and any Terms Agreement and
all other documents relating to the offering, the cost of
preparing, printing, packaging and delivering the Notes, the
fees and disbursements, including fees of counsel, incurred
in compliance with Section 4(f), the fees and disbursements
of the Trustee and the fees of any agency that the Company
requests to rate the Notes, (ii) reimburse each of you on a
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monthly basis for all out-of-pocket expenses (including
without limitation advertising expenses) incurred by you in
connection with this Agreement, to the extent such expenses
have been authorized by the Company and (iii) pay the
reasonable fees and expenses of your counsel incurred in
connection with this Agreement.
(i) Each acceptance by the Company of an offer to
purchase Notes will be deemed to be an affirmation that its
representations and warranties contained in this Agreement
are true and correct at the time of such acceptance, as
though made at and as of such time, and a covenant that such
representations and warranties will be true and correct at
the time of payment for the Notes relating to such
acceptance, as though made at and as of such time (it being
understood that for purposes of the foregoing affirmation
and covenant such representations and warranties shall
relate to the Registration Statement and Prospectus as
amended or supplemented at each such time). Each such
acceptance by the Company of an offer for the purchase of
Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that,
as of the settlement date for the sale of such Notes, after
giving effect to the issuance of such Notes, of any other
Notes to be issued on or prior to such settlement date and
of any other Securities to be issued and sold by the Company
on or prior to such settlement date, the aggregate amount of
Securities (including any Notes) which have been issued and
sold by the Company will not exceed the amount of Securities
registered pursuant to the Registration Statement.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement relating to any offering of
Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto), the Company will deliver
or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Chairman of the
Board or the President and the principal financial or
accounting officer of the Company, dated the date of the
effectiveness of such amendment or the date of the filing of
such supplement, in form reasonably satisfactory to you, of
the same tenor as the certificate referred to in Section
5(d) but modified to relate to the last day of the fiscal
quarter for which financial statements of the Company were
last filed with the Commission and to the Registration
Statement and the Prospectus as amended and supplemented to
the time of the effectiveness of such amendment or the
filing of such supplement.
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(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to any offering of
Securities other than the Notes, (ii) providing solely for
the specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto or (iii) setting forth or
incorporating by reference financial statements or other
information as of and for a fiscal quarter, unless, in the
case of clause (iii) above, in the reasonable judgment of
any of you, such financial statements or other information
are of such a nature that an opinion of counsel should be
furnished), the Company shall furnish or cause to be
furnished promptly to each of you a written opinion of
counsel of the Company satisfactory to each of you, dated
the date of the effectiveness of such amendment or the date
of the filing of such supplement, in form satisfactory to
each of you, of the same tenor as the opinion referred to in
Section 5(b) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to
the time of the effectiveness of such amendment or the
filing of such supplement or, in lieu of such opinion,
counsel last furnishing such an opinion to you may furnish
each of you with a letter to the effect that you may rely on
such last opinion to the same extent as though it were dated
the date of such letter authorizing reliance (except that
statements in such last opinion will be deemed to relate to
the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such
amendment or the filing of such supplement).
(l) Each time that the Registration Statement or the
Prospectus is amended or supplemented to include or
incorporate amended or supplemental financial information,
the Company shall cause its independent public accountants
promptly to furnish each of you a letter, dated the date of
the effectiveness of such amendment or the date of the
filing of such supplement, in form satisfactory to each of
you, of the same tenor as the letter referred to in Section
5(e) with such changes as may be necessary to reflect the
amended and supplemental financial information included or
incorporated by reference in the Registration Statement and
the Prospectus, as amended or supplemented to the date of
such letter; provided, however, that, if the Registration
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Statement or the Prospectus is amended or supplemented
solely to include or incorporate by reference financial
information as of and for a fiscal quarter, the Company's
independent public accountants may limit the scope of such
letter, which shall be satisfactory in form to each of you,
to the unaudited financial statements, the related
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" and any other information of an
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accounting, financial or statistical nature included in such
amendment or supplement, unless, in the reasonable judgment
of any of you, such letter should cover other information or
changes in specified financial statement line items.
(m) During the period, if any, specified in any Terms
Agreement (or if no such period is specified, for five
business days following the date of such Terms Agreement),
the Company shall not, without the prior consent of the
Purchaser thereunder, issue or announce the proposed
issuance of any of its debt securities, including Notes,
with terms substantially similar to those of the Notes being
purchased pursuant to such Terms Agreement, other than
borrowings under its revolving credit agreements and lines
of credit and issuances of its commercial paper.
5. Conditions to the Obligations of the Agents. The
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obligations of each Agent to solicit offers to purchase the Notes
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time, on the Effective Date, when any supplement to the
Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, shall have been filed
in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to each Agent the
opinion of Sidley & Austin, counsel for the Company, dated
the Execution Time to the effect that:
(i) (a) each of the Company, TDS
Telecommunications Corporation, a Delaware corporation,
United States Cellular Corporation, a Delaware
corporation, and American Paging, Inc., a Delaware
corporation, (each a "Principal Subsidiary") has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is incorporated, with full
corporate power and authority to own its properties and
conduct its business as described in the Prospectus,
(b) the Company, United States Cellular Corporation and
American Paging, Inc. are duly qualified to do business
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and are in good standing as foreign corporations in
Illinois and (c) nothing has come to such counsel's
attention that causes them to believe that either the
Company or any Principal Subsidiary is not duly
qualified to do business as a foreign corporation or is
not in good standing under the laws of each
jurisdiction which requires such qualification wherein
it owns or leases material properties or conducts
material business and where the failure so to qualify
would have a material adverse effect on the Company and
its subsidiaries considered as a whole;
(ii) all the outstanding shares of capital stock
of each Principal Subsidiary which are identified in
the Prospectus or in the prospectus of American Paging,
Inc. dated February 9, 1994 (the "API Prospectus") as
being owned by the Company have been duly and validly
authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in
the Prospectus or in the API Prospectus, to such
counsel's knowledge, such shares constitute all of the
outstanding shares of capital stock of each Principal
Subsidiary, and certificates representing such shares
are registered in the name of and are in the possession
of the Company, free and clear of any perfected
security interest and, to such counsel's knowledge,
except as otherwise set forth in the Prospectus or the
API Prospectus, any other security interests, claims,
liens or encumbrances;
(iii) the Company's authorized equity
capitalization is as set forth in the Prospectus; and
the Notes conform in all material respects to the
description thereof contained in the Prospectus
(subject to the insertion in the Notes of the maturity
dates, the interest rates and other similar terms
thereof which will be described in supplements to the
Prospectus as contemplated by the last sentence of
Section 1(a) of this Agreement);
(iv) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its
terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights
generally from time to time in effect, as well as to
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law)); and the Notes have been duly
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authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof,
will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from
time to time in effect, as well as to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity
or at law));
(v) to such counsel's knowledge, (a) there is no
pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its
subsidiaries of a character required to be disclosed in
the Prospectus which is not adequately disclosed,
(b) there is no franchise, contract or other document
of a character required to be described in the
Registration Statement or the Prospectus, or to be
filed as an exhibit which is not described or filed as
required and (c) the statements included or
incorporated in the Prospectus describing any statutes,
decrees or proceedings before or actions taken by
courts or commissions or material contracts or
agreements relating to the Company fairly summarize
such matters;
(vi) the Registration Statement has become
effective under the Act; any required filings of the
Basic Prospectus and of the Prospectus (including the
Basic Prospectus dated April 21, 1994) pursuant to
Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); to such counsel's
knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or
threatened and the Registration Statement and the
Prospectus (other than the financial statements and
other financial and statistical information contained
therein and the Form T-1 of Statement of Eligibility of
the Trustee under the Trust Indenture Act (the "Form T-
1"), as to which such counsel need express no opinion)
comply as to form in all material respects with the
applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules
thereunder; and such counsel has no reason to believe
that the Registration Statement (other than the
financial statements and other financial and
statistical information contained therein and the Form
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T-1, as to which such counsel need express no belief),
at the Effective Date or at the Execution Time,
contained any untrue statement of a material fact or
omitted to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading or that the Prospectus (other
than the financial statements and other financial and
statistical information contained therein as to which
such counsel need express no belief), at the date
hereof, includes any untrue statement of a material
fact or omits to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or
order of any governmental agency or body or, to our
knowledge, any court, is required for the consummation
of the transactions contemplated by this Agreement,
except such as have been obtained under the Act and the
Trust Indenture Act and such as may be required under
the blue sky laws of any jurisdiction in connection
with the sale of the Notes as contemplated by this
Agreement;
(ix) the execution and delivery of the Indenture,
the issue and sale of the Notes, the consummation of
any other of the transactions contemplated by this
Agreement and the fulfillment of the terms thereof will
not conflict with, result in a breach of, or constitute
a default under, the charter or by-laws of the Company
or the terms of any indenture or other agreement or
instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound,
or any order or regulation known to such counsel to be
applicable to the Company or any of its subsidiaries of
any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction
over the Company or any of its Principal Subsidiaries;
and
(x) to such counsel's knowledge, except as
disclosed in the Prospectus (including documents
incorporated therein by reference), no holder of
securities of the Company has rights to the
registration of such securities under the Registration
Statement.
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In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any
jurisdiction other than the States of California, Illinois
or New York, the District of Columbia or the United States,
to the extent deemed proper and specified in such opinion,
upon the opinion of other counsel of good standing believed
to be reliable and who are satisfactory to counsel for the
Agents and (B) as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus
in this paragraph (b) include any supplements thereto at the
date such opinion is rendered.
(c) Each Agent shall have received from Mayer, Brown &
Platt, counsel for the Agents, such opinion or opinions,
dated the date hereof, with respect to the issuance and sale
of the Notes, the Indenture, the Registration Statement, the
Prospectus (together with any supplement thereto) and other
related matters as the Agents may reasonably require, and
the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(d) The Company shall have furnished to each Agent a
certificate of the Company, signed by the Chairman or the
President and by the principal financial or principal
accounting officer of the Company, dated the Execution Time,
to the effect that the signers of such certificate have
carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this
Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the date hereof with the
same effect as if made on the date hereof and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied as a condition to the obligation
of the Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse
change in the condition (financial or other), earnings,
business or properties of the Company and its
subsidiaries, considered on a consolidated basis,
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whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated by the Prospectus (exclusive of any
supplement thereto).
(e) At the Execution Time, Arthur Andersen & Co. shall
have furnished to each Agent a letter or letters (which may
refer to letters previously delivered to the Agents), dated
as of the Execution Time, in form and substance satisfactory
to the Agents, confirming that they are independent
accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial
statements, financial statement schedules and pro forma
financial statements, if any, included or incorporated
in the Registration Statement and the Prospectus and
reported on by them comply in form in all material
respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its subsidiaries; carrying out certain
specified procedures (but not an examination in
accordance with generally accepted auditing standards)
which would not necessarily reveal matters of
significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings
of the stockholders and directors of the Company and
the Subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries
as to transactions and events subsequent to the date of
the most recent audited financial statements included
or incorporated in the Prospectus, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration
Statement and the Prospectus do not comply in form
in all material respects with applicable
accounting requirements and with the published
rules and regulations of the Commission with
respect to financial statements included or
incorporated in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied
on a basis substantially consistent with that of
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the audited financial statements included or
incorporated in the Registration Statement and the
Prospectus;
(2) with respect to the period subsequent to
the date of the most recent financial statements
(other than any capsule information), audited or
unaudited, included or incorporated in the
Registration Statement and the Prospectus, there
were any changes, at a specified date not more
than five business days prior to the date of the
letter, in the consolidated long-term debt of the
Company and its subsidiaries or decreases in the
common stockholders' consolidated equity of the
Company and its subsidiaries as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statement and the Prospectus, or for
the period from the date of the most recent
financial statements included or incorporated in
the Registration Statement and the Prospectus to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in total operating revenues or in
operating income, or in income before interest and
income tax or in net income, or in earnings per
common share of the Company and its subsidiaries
on a consolidated basis, except in all instances
for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by
an explanation by the Company as to the
significance thereof unless said explanation is
not deemed necessary by the Agents; or
(3) the amounts included in any unaudited
"capsule" information included or incorporated in
the Registration Statement and the Prospectus do
not agree with the amounts set forth in the
unaudited financial statements for the same
periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited financial
statements included or incorporated in the
Registration Statement and the Prospectus;
(iii) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement
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and the Prospectus and in Exhibit 12 to the
Registration Statement, including the information
included or incorporated in Items 1, 2, 6, 7 and 11 of
the Company's Annual Report on Form 10-K, incorporated
in the Registration Statement and the Prospectus, and
the information included in the "Management's
Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated in the
Company's Quarterly Reports on Form 10-Q, incorporated
in the Registration Statement and the Prospectus,
agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal
interpretation; and
(iv) if unaudited pro forma financial statements
are included or incorporated in the Registration
Statement and the Prospectus, on the basis of a reading
of the unaudited pro forma financial statements,
carrying out certain specified procedures, inquiries of
certain officials of the Company and the acquired
company who have responsibility for financial and
accounting matters, and proving the arithmetic accuracy
of the application of the pro forma adjustments to the
historical amounts in the pro forma financial
statements, nothing came to their attention which
caused them to believe that the pro forma financial
statements do not comply in form in all material
respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the
historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall
have furnished to each Agent such further information,
documents, certificates and opinions of counsel as the
Agents may reasonably request.
If any of the conditions specified in this Section 5
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this
Agreement and all obligations of any Agent hereunder may be
canceled at any time by the Agents. Notice of such cancellation
shall be given to the Company in writing or by telephone or
facsimile transmission subsequently confirmed in writing.
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The documents required to be delivered by this Section
5 shall be delivered at the office of Mayer, Brown & Platt, 190
South LaSalle Street, Chicago, Illinois, on the date hereof.
6. Conditions to the Obligations of a Purchaser. The
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obligations of a Purchaser to purchase any Notes will be subject
to the accuracy of the representations and warranties on the part
of the Company herein as of the date of any related Terms
Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
shall then be threatened.
(b) If specified by any related Terms Agreement and
except to the extent modified by such Terms Agreement, the
Purchaser shall have received, appropriately updated, (i) a
certificate of the Company, dated as of the Closing Date, to
the effect set forth in Section 5(d) (except that references
to the Prospectus shall be to the Prospectus as supplemented
at the time of execution of the Terms Agreement), (ii) the
opinion of Sidley & Austin, counsel for the Company, dated
as of the Closing Date, to the effect set forth in Section
5(b), (iii) at the expense of the party specified in the
Terms Agreement, the opinion of Mayer, Brown & Platt,
counsel for the Purchaser, dated as of the Closing Date, to
the effect set forth in Section 5(c), and (iv) letter of
Arthur Andersen & Co., independent accountants for the
Company, dated as of the Closing Date, to the effect set
forth in Section 5(e).
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement and the appropriate Terms
Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms
hereof and thereof shall not be in all material respects
reasonably satisfactory in form and substance to the Purchaser
and its counsel, such Terms Agreement and all obligations of the
Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such
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cancellation shall be given to the Company in writing or by
telephone or facsimile transmission subsequently confirmed in
writing.
7. Right of Person Who Agreed to Purchase to Refuse to
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Purchase. (a) The Company agrees that any person who has agreed
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to purchase and pay for any Note pursuant to a solicitation by
any of the Agents shall have the right to refuse to purchase such
Note if, at the Closing Date therefor, any condition set forth in
Section 5 shall not have been satisfied.
(b) The Company agrees that any person who has agreed to
purchase and pay for any Note pursuant to a solicitation by any
of the Agents shall have the right to refuse to purchase such
Note if, subsequent to the agreement to purchase such Note, any
change, condition or development specified in any of Sections
9(b)(i) and (ii) shall have occurred (with the judgment of the
Agent which presented the offer to purchase such Note being
substituted for any judgment of a purchaser required therein) the
effect of which is, in the judgment of the Agent which presented
the offer to purchase such Note, so material and adverse as to
make it impractical or inadvisable to proceed with the sale and
delivery of such Note (it being understood that under no
circumstance shall any such Agent have any duty or obligation to
the Company or to any such person to exercise the judgment
permitted to be exercised under this Section 7(b) and Section
9(b)).
8. Indemnification and Contribution. (a) The Company
--------------------------------
agrees to indemnify and hold harmless each of you and each person
who controls each of you within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which you, they or any of you
or them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the
registration of the Securities as originally filed or in any
amendment thereof, or in the Prospectus or any preliminary
Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that (i) the
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Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement
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or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company
by or on behalf of any of you specifically for inclusion therein,
and (ii) such indemnity with respect to any preliminary
Prospectus (or, if the Prospectus has been supplemented and you
have been provided copies of such Prospectus as supplemented a
reasonable period of time prior to being required by the Act to
deliver such Prospectus as supplemented, with respect to the
Prospectus) shall not inure to the benefit of any of you, (or any
person controlling any of you) from whom the person asserting any
such loss, claim, damage or liability purchased the Notes which
are the subject thereof if such person did not receive a copy of
the Prospectus (or the Prospectus as so supplemented) excluding
documents incorporated therein by reference at or prior to the
confirmation of the sale of such Notes to such person in any case
where such delivery is required by the Act and the untrue
statement or omission of a material fact contained in any
preliminary Prospectus (or, if so supplemented and provided, in
the Prospectus) was corrected in the Prospectus (or the
Prospectus as so supplemented). This indemnity agreement will be
in addition to any liability which the Company may otherwise
have.
(b) Each of you agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who
signs the Registration Statement and each person who controls the
Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to
you, but only with reference to written information relating to
any of you furnished to the Company by or on behalf of any of you
specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in
addition to any liability which you may otherwise have. The
Company acknowledges that the statements set forth in the last
paragraph of the cover page, and under the heading "Plan of
Distribution", of the Prospectus Supplement constitute the only
information furnished in writing by any of you for inclusion in
the documents referred to in the foregoing indemnity, and you
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party will
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 8. In case
any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to
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the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such
-----------------
action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense
of such action and approval by the indemnified party of counsel,
the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in connection with the assertion
of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more
than one separate counsel (plus any local counsel), approved by
you in the case of paragraph (a) of this Section 8, representing
the indemnified parties under such paragraph (a) who are parties
to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after
notice of commencement of the action or (iii) the indemnifying
party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and
except that, if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In the event that the indemnity provided for in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Company and each of you agree to contribute to the
aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which
the Company and one or more of you may be subject in such
proportion as is appropriate to reflect the relative benefits
received by the Company and by each of you from the offering of
the Notes from which such Losses arise; provided, however, that
-----------------
in no case shall any of you be responsible for any amount in
excess of the commissions received by such of you in connection
with the sale of the Notes from which such Losses arise (or, in
the case of Notes sold pursuant to a Terms Agreement, the
aggregate commissions that would have been received by such of
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you if such commissions had been payable). If the allocation
provided by the immediately preceding sentence is unavailable for
any reason, the Company and each of you shall contribute in such
proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and of each
of you in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering (before
deducting expenses) of the Notes from which such Losses arise,
and benefits received by each of you shall be deemed to be equal
to the total commissions received by such of you in connection
with the sale of Notes from which such Losses arise (or, in the
case of Notes sold pursuant to a Terms Agreement, the aggregate
commissions that would have been received by such of you if such
commissions had been payable). Relative fault shall be
determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company or any
of you. The Company and each of you agree that it would not be
just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person
who controls any of you within the meaning of the Act or the
Exchange Act and each director, officer, employee and agent of
any of you shall have the same rights to contribution as you and
each person who controls the Company within the meaning of either
the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Termination. (a) This Agreement will continue in
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effect until terminated as provided in this Section 9. This
Agreement may be terminated by either the Company as to any of
you or any of you insofar as this Agreement relates to such of
you, giving written notice of such termination to each of you or
the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day
following the receipt of such notice by the party to whom such
notice is given. In the event of such termination, no party
shall have any liability to the other party hereto, except as
provided in the fourth paragraph of Section 2(a), Section 4(h),
Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Purchaser, by notice given to the
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Company prior to delivery of any payment for any Note to be
purchased thereunder, if prior to such time (i) there shall have
occurred, subsequent to the agreement to purchase such Note, any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries considered on a consolidated basis, the effect of
which is, in the judgment of the Purchaser, so material and
adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of such Note, (ii) there shall have
been, subsequent to the agreement to purchase such Note, any
decrease in the rating of any of the Company's debt securities by
Moody's Investors Service Inc. ("Moody's") or Standard & Poor's
Corporation ("S & P") or either Moody's or S & P shall publicly
announce that it has any of such debt securities under
consideration for possible downgrade, (iii) trading in the
Company's Common Stock shall have been suspended by the
Commission or the American Stock Exchange or trading in
securities generally on the New York Stock Exchange or the
American Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on either of such
Exchanges, (iv) a banking moratorium shall have been declared
either by Federal or New York State authorities, or (v) there
shall have occurred any outbreak or material escalation of
hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which
on the financial markets is such as to make it, in the judgment
of the Purchaser, impracticable to market such Notes or to
enforce contracts for the sale of such Notes.
10. Representations and Indemnities to Survive. The
------------------------------------------
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of you
set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or
on behalf of you or the Company or any of the officers, directors
or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Notes. The provisions of
Sections 4(h) and 8 hereof shall survive the termination or
cancellation of this Agreement. The provisions of this Agreement
(including without limitation Section 7 hereof) applicable to any
purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of
this Agreement. If at the time of termination of this Agreement
an Agent shall own any Notes purchased pursuant to a Terms
Agreement with the intention of selling them, the provisions of
Section 4 shall remain in effect until such Notes are resold.
11. Notices. All communications hereunder will be in
-------
writing and effective only on receipt, and, if sent to any of
you, will be mailed, delivered or telegraphed and confirmed to
each of you, at the address specified in Schedule I hereto; or,
if sent to the Company, will be mailed, delivered or telegraphed
-25-
<PAGE>
<PAGE>
and confirmed to it at 30 North LaSalle Street, Chicago, Illinois
60602, attention of the Chairman (with a copy to its Treasurer
and to Sidley & Austin, One First National Plaza, Chicago,
Illinois 60603, attention of Michael G. Hron.
12. Successors. This Agreement will inure to the
----------
benefit of and be binding upon the parties hereto, their
respective successors, the officers and directors and controlling
persons referred to in Section 8 hereof and, to the extent
provided in Section 7, any person who has agreed to purchase
Notes, and no other person will have any right or obligation
hereunder.
13. Applicable Law. This Agreement will be governed
--------------
by and construed in accordance with the laws of the State of New
York.
-26-
<PAGE>
<PAGE>
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company
and you.
Very truly yours,
TELEPHONE AND DATA SYSTEMS, INC.
By: /c/ LeRoy T. Carlson, Jr.
--------------------------------------
Title: President & CEO
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
SALOMON BROTHERS INC
By: /c/ Pamela Kendall
-------------------------------
Title: Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /c/ Jon M. Knight
-------------------------------
Authorized Signatory
-27-
<PAGE>
<PAGE>
SCHEDULE I
Commissions:
-----------
The Company agrees to pay each Agent a commission equal
to the following percentage of the principal amount of each Note
sold on an agency basis by such Agent:
Term Commission Rate
---- ---------------
From 9 months to less than one year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .700%
From 20 years up to and including 30 years .750%
Unless otherwise specified in the applicable Terms
Agreement, the discount or commission payable to a Purchaser
shall be determined on the basis of the commission schedule set
forth above.
Address for Notice to you:
-------------------------
Notices to Salomon Brothers Inc shall be directed to it at
Seven World Trade Center, New York, New York 10048, Attention of
the Medium-Term Note Department.
Notices to Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated shall be directed to it at North
Tower (23rd Floor), World Financial Center, New York, New York
10281-1323, Attention of MTN Product Management.
Schedule I, Page 1
<PAGE>
<PAGE>
EXHIBIT A
CORPORATION
Medium-Term Note Administrative Procedures
------------------------------------------
April 21, 1994
---------------
The Medium-Term Notes, Series C, Due from Nine Months to
Thirty Years from Date of Issue (the "Notes") of Telephone and
Data Systems, Inc. (the "Company") are to be offered on a
continuing basis. Salomon Brothers Inc and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as agents
(each an "Agent"), have agreed to solicit purchases of Notes
issued in fully registered form. The Agents will not be
obligated to purchase Notes for their own account. The Notes are
being sold pursuant to a Selling Agency Agreement between the
Company and the Agents dated the date hereof (the "Agency
Agreement"). The Notes will rank equally with all other
unsecured and unsubordinated debt of the Company and have been
registered with the Securities and Exchange Commission (the
"Commission"). The Notes will be issued under the Indenture
dated as of February 1, 1991 (the "Indenture"), between the
Company and Harris Trust and Savings Bank, as trustee (the
"Trustee").
The Agency Agreement provides that Notes may also be
purchased by an Agent acting solely as principal and not as
agent. In the event of any such purchase, the functions of both
the Agent and the beneficial owner under the administrative
procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between
the Company and such Agent acting as principal.
Each Note will be represented by either a Global Security
(as defined hereinafter) delivered to Harris Trust and Savings
Bank ("HTSB"), as agent for The Depository Trust Company ("DTC"),
and recorded in the book-entry system maintained by DTC (a "Book-
Entry Note") or a certificate delivered to the Holder thereof or
a Person designated by such Holder (a "Certificated Note"). Only
Notes denominated and payable in U.S. dollars may be issued as
Book-Entry Notes. An owner of a Book-Entry Note will not be
entitled to receive a certificate representing such Note.
The procedures to be followed during, and the specific terms
of, the solicitation of orders by the Agents and the sale as a
result thereof by the Company are explained below.
Administrative and record-keeping responsibilities will be
handled for the Company by its Treasury Department. The Company
will advise the Agents and the Trustee in writing of those
Exhibit A, Page 1
<PAGE>
<PAGE>
persons handling administrative responsibilities with whom the
Agents and the Trustee are to communicate regarding orders to
purchase Notes and the details of their delivery.
Administrative procedures and specific terms of the offering
are explained below. Book-Entry Notes will be issued in
accordance with the administrative procedures set forth in Part I
hereof, as adjusted in accordance with changes in DTC's operating
requirements, and Certificated Notes will be issued in accordance
with the administrative procedures set forth in Part II hereof.
Unless otherwise defined herein, terms defined in the Indenture
and the Notes shall be used herein as therein defined. Notes for
which interest is calculated on the basis of a fixed interest
rate, which may be zero, are referred to herein as "Fixed Rate
Notes". Notes for which interest is calculated on the basis of a
floating interest rate are referred to herein as "Floating Rate
Notes". To the extent the procedures set forth below conflict
with the provisions of the Notes, the Indenture, DTC's operating
requirements or the Agency Agreement, the relevant provisions of
the Notes, the Indenture, DTC's operating requirements and the
Agency Agreement shall control. References to Chicago time are
for convenience only and in the event of a discrepancy between
New York City time and Chicago time, New York City time shall
control.
PART I
Administrative Procedures for
-----------------------------
Book-Entry Notes
----------------
In connection with the qualification of the Book-Entry Notes
for eligibility in the book-entry system maintained by DTC, HTSB
will perform the custodial, document control and administrative
functions described below, in accordance with its respective
obligations under a Letter of Representations from the Company
and HTSB to DTC dated as of the date hereof and a Medium-Term
Note Certificate Agreement between HTSB and DTC and its
obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement system ("SDFS").
Issuance: On any date of settlement (as defined under
-------- "Settlement" below) for one or more Book-Entry
Notes, the Company will issue a single global
security in fully registered form without
coupons (a "Global Security") representing up to
$150,000,000 principal amount of all such Book-
Entry Notes that have the same original issue
date, original issue discount provisions, if
any, Interest Payment Dates, Regular Record
Dates, Interest Payment Period, redemption and
repayment provisions, if any, Maturity Date,
and, in the case of Fixed Rate Notes, interest
Exhibit A, Page 2
<PAGE>
<PAGE>
rate, or, in the case of Floating Rate Notes,
initial interest rate, Base Rate, Index
Maturity, Interest Reset Period, Interest Reset
Dates, Spread or Spread Multiplier, if any,
minimum interest rate, if any, and maximum
interest rate, if any (collectively, the
"Terms"). Each Global Security will be dated
and issued as of the date of its authentication
by the Trustee. Each Global Security will bear
an original issue date, which will be (i) with
respect to an original Global Security (or any
portion thereof), the original issue date
specified in such Global Security and (ii)
following a consolidation of Global Securities,
with respect to the Global Security resulting
from such consolidation, the most recent
Interest Payment Date to which interest has been
paid or duly provided for on the predecessor
Global Securities, regardless of the date of
authentication of such resulting Global
Security. No Global Security will represent (i)
both Fixed Rate and Floating Rate Book-Entry
Notes or (ii) any Certificated Note.
Identification The Company has arranged with the CUSIP Service
--------------
Numbers: Bureau of Standard & Poor's Corporation (the
--------
"CUSIP Service Bureau") for the reservation of a
series of CUSIP numbers, which series consists
of approximately 900 CUSIP numbers and relates
to Global Securities representing Book-Entry
Notes and book-entry medium-term notes issued by
the Company with other series designations.
HTSB, the Company and DTC have obtained from the
CUSIP Service Bureau a written list of such
reserved CUSIP numbers. The Company will assign
CUSIP numbers to Global Securities as described
below under Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Company has assigned
to Global Securities. HTSB will notify the
Company at any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to
Global Securities, and, if it deems necessary,
the Company will reserve additional CUSIP
numbers for assignment to Global Securities.
Upon obtaining such additional CUSIP numbers,
the Company shall deliver a list of such
additional CUSIP numbers to HTSB and DTC.
Registration: Global Securities will be issued only in fully
------------ registered form without coupons. Each Global
Security will be registered in the name of CEDE
Exhibit A, Page 3
<PAGE>
<PAGE>
& CO., as nominee for DTC, on the securities
register for the Notes maintained under the
Indenture. The beneficial owner of a Book-Entry
Note (or one or more indirect participants in
DTC designated by such owner) will designate one
or more participants in DTC (with respect to
such Book-Entry Note, the "Participants") to act
as agent or agents for such owner in connection
with the book-entry system maintained by DTC,
and DTC will record in book-entry form, in
accordance with instructions provided by such
Participants, a credit balance with respect to
such beneficial owner in such Book-Entry Note in
the account of such Participants. The ownership
interest of such beneficial owner (or such
participant) in such Book-Entry Note will be
recorded through the records of such
Participants or through the separate records of
such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
--------- accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one
or more indirect participants in DTC) acting on
behalf of beneficial transferors and transferees
of such Note.
Exchanges: HTSB may deliver to DTC and the CUSIP Service
--------- Bureau at any time a written notice of
consolidation (a copy of which shall be attached
to the resulting Global Security described
below) specifying (i) the CUSIP numbers of two
or more Outstanding Global Securities that
represent (A) Fixed Rate Book-Entry Notes having
the same Terms and for which interest has been
paid to the same date or (B) Floating Rate Book-
Entry Notes having the same Terms and for which
interest has been paid to the same date, (ii) a
date, occurring at least thirty days after such
written notice is delivered and at least thirty
days before the next Interest Payment Date for
such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new
CUSIP number, obtained from the Company, to be
assigned to such replacement Global Security.
Upon receipt of such a notice, DTC will send to
its participants (including HTSB) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, HTSB will deliver to
Exhibit A, Page 4
<PAGE>
<PAGE>
the CUSIP Service Bureau a written notice
setting forth such exchange date and such new
CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be
valid. On the specified exchange date, the HTSB
will exchange such Global Securities for a
single Global Security bearing the new CUSIP
number and the CUSIP numbers of the exchanged
Global Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be
exchanged exceed $150,000,000 in aggregate
principal amount, one Global Security will be
authenticated and issued to represent each
$150,000,000 of principal amount of the
exchanged Global Securities and an additional
Global Security will be authenticated and issued
to represent any remaining principal amount of
such Global Securities (see "Denominations"
below).
Maturities: Each Book-Entry Note will mature on a date not
---------- less than nine months nor more than thirty years
after the settlement date for such Note.
Denominations: Book-Entry Notes will be issued in principal
------------- amounts of $1,000 or any amount in excess
thereof that is an integral multiple of $1,000.
Global Securities will be denominated in
principal amounts not in excess of $150,000,000.
If one or more Book-Entry Notes having an
aggregate principal amount in excess of
$150,000,000 would, but for the preceding
sentence, be represented by a single Global
Security, then one Global Security will be
authenticated and issued to represent each
$150,000,000 principal amount of such Book-Entry
Note or Notes and an additional Global Security
will be authenticated and issued to represent
any remaining principal amount of such Book-
Entry Note or Notes. In such a case, each of
the Global Securities representing such Book-
Entry Note or Notes shall be assigned the same
CUSIP number.
Interest: General. Interest, if any, on each Book-Entry
-------- -------
Note will accrue from the original issue date
for the first interest period or the last date
to which interest has been paid, if any, for
each subsequent interest period, on the Global
Exhibit A, Page 5
<PAGE>
<PAGE>
Security representing such Book-Entry Note, and
will be calculated and paid in the manner
described in such Book-Entry Note and in the
Prospectus (as defined in the Agency Agreement),
as supplemented by the applicable Pricing
Supplement. Unless otherwise specified therein,
each payment of interest on a Book-Entry Note
will include interest accrued to but excluding
the Interest Payment Date (provided that, in the
case of Floating Rate Book-Entry Notes which
reset daily or weekly, interest payments will
include accrued interest to but excluding the
Regular Record Date immediately preceding the
Interest Payment Date) or to but excluding
Maturity (other than a Maturity of a Fixed Rate
Book-Entry Note occurring on the 31st day of a
month, in which case such payment of interest
will include interest accrued to but excluding
the 30th day of such month). Interest payable
at the Maturity of a Book-Entry Note will be
payable to the Person to whom the principal of
such Note is payable. Standard & Poor's
Corporation will use the information received in
the pending deposit message described under
Settlement Procedure "C" below in order to
include the amount of any interest payable and
certain other information regarding the related
Global Security in the appropriate (daily or
weekly) bond report published by Standard &
Poor's Corporation.
Regular Record Dates. The Regular Record Date
--------------------
with respect to any Interest Payment Date shall
be the date fifteen calendar days immediately
preceding such Interest Payment Date (whether or
not a Business Day).
Interest Payment Dates on Fixed Rate Book-Entry
-----------------------------------------------
Notes. Unless otherwise specified pursuant to
-----
Settlement Procedure "A" below, interest
payments on Fixed Rate Book-Entry Notes will be
made semiannually on January 15 and July 15 of
each year and at Maturity; provided, however,
-----------------
that if an Interest Payment Date for a Fixed
Rate Book-Entry Note is not a Business Day, the
payment due on such day shall be made on the
next succeeding Business Day and no interest
shall accrue on such payment for the period from
and after such Interest Payment Date; provided
--------
further, that in the case of a Fixed Rate Book-
-------
Entry Note issued between a Regular Record Date
and an Interest Payment Date, the first interest
Exhibit A, Page 6
<PAGE>
<PAGE>
payment will be made on the Interest Payment
Date following the next succeeding Regular
Record Date.
Interest Payment Dates on Floating Rate Book-
---------------------------------------------
Entry Notes. Interest payments will be made on
-----------
Floating Rate Book-Entry Notes monthly,
quarterly, semi-annually or annually. Unless
otherwise agreed upon, interest will be payable,
in the case of Floating Rate Book-Entry Notes
with a monthly Interest Payment Period, on the
third Wednesday of each month; with a quarterly
Interest Payment Period, on the third Wednesday
of March, June, September and December of each
year; with a semi-annual Interest Payment Period
on the third Wednesday of the two months
specified pursuant to Settlement Procedure "A"
below; and with an annual Interest Payment
Period, on the third Wednesday of the month
specified pursuant to Settlement Procedure "A"
below; provided, however, that if an Interest
-----------------
Payment Date for a Floating Rate Book-Entry Note
would otherwise be a day that is not a Business
Day with respect to such Floating Rate Book-
Entry Note, such Interest Payment Date will be
the next succeeding Business Day with respect to
such Floating Rate Book-Entry Note, except in
the case of a Floating Rate Book-Entry Note for
which the Base Rate is LIBOR, if such Business
Day is in the next succeeding calendar month,
such Interest Payment Date will be the
immediately preceding Business Day; and provided
--------
further, that in the case of a Floating Rate
-------
Book-Entry Note issued between a Regular Record
Date and an Interest Payment Date, the first
interest payment will be made on the Interest
Payment Date following the next succeeding
Regular Record Date.
Notice of Interest Payment and Regular Record
---------------------------------------------
Dates. On the first Business Day of January,
-----
April, July and October of each year, HTSB will
deliver to the Company and DTC a written list of
Regular Record Dates and Interest Payment Dates
that will occur with respect to Book-Entry Notes
during the six-month period beginning on such
first Business Day. Promptly after each
Interest Determination Date for Floating Rate
Book-Entry Notes, HTSB, as Calculation Agent,
will notify Standard & Poor's Corporation of the
interest rates determined on such Interest
Determination Date.
Exhibit A, Page 7
<PAGE>
<PAGE>
Calculation of Fixed Rate Book-Entry Notes. Interest on Fixed
---------------------------------------------
Interest: Rate Book-Entry Notes (including interest for
---------
partial periods) will be calculated on the basis
of a 360-day year of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest rates
------------------------------
on Floating Rate Book-Entry Notes will be
determined as set forth in the form of Notes.
Interest on Floating Rate Book-Entry Notes,
except as otherwise set forth therein, will be
calculated on the basis of actual days elapsed
and a year of 360 days, except that in the case
of a Floating Rate Book-Entry Note for which the
Base Rate is Treasury Rate, interest will be
calculated on the basis of the actual number of
days in the year.
Payments of Payment of Interest Only. Promptly after each
-----------------------------------------
Principal and Regular Record Date, HTSB will deliver to the
-------------
Interest: Company and DTC a written notice setting forth,
--------
by CUSIP number, the amount of interest to be
paid on each Global Security on the following
Interest Payment Date (other than an Interest
Payment Date coinciding with Maturity) and the
total of such amounts. DTC will confirm the
amount payable on each Global Security on such
Interest Payment Date by reference to the
appropriate (daily or weekly) bond reports
published by Standard & Poor's Corporation. The
Company will pay to HTSB, as paying agent, the
total amount of interest due on such Interest
Payment Date (other than at Maturity), and HTSB
will pay such amount to DTC, at the times and in
the manner set forth below under "Manner of
Payment". If any Interest Payment Date for a
Book-Entry Note is not a Business Day, the
payment due on such day shall be made on the
next succeeding Business Day and no interest
shall accrue on such payment for the period from
and after such Interest Payment Date.
Payments at Maturity. On or about the first
--------------------
Business Day of each month, HTSB will deliver to
the Company, DTC and the Trustee a written list
of principal and interest to be paid on each
Global Security maturing (on a Maturity or
Redemption Date or otherwise) in the following
month. HTSB, the Company and DTC will confirm
the amounts of such principal and interest
payments with respect to each such Global
Security on or about the fifth Business Day
preceding the Maturity of such Global Security.
Exhibit A, Page 8
<PAGE>
<PAGE>
On or before Maturity, the Company will pay to
HTSB, as paying agent, the principal amount of
such Global Security, together with interest due
at such Maturity. HTSB will pay such amount to
DTC at the times and in the manner set forth
below under "Manner of Payment". If any
Maturity of a Global Security representing Book-
Entry Notes is not a Business Day, the payment
due on such day shall be made on the next
succeeding Business Day and no interest shall
accrue on such payment for the period from and
after such Maturity. Promptly after payment to
DTC of the principal and interest due at
Maturity of such Global Security, the Trustee
will cancel such Global Security in accordance
with the Indenture and so advise the Company.
On the first Business Day of each month, HTSB
will deliver to the Trustee a written statement
indicating the total principal amount of
Outstanding Global Securities as of the
immediately preceding Business Day. If the
Maturity of a Book-Entry Note is not a Business
Day, the payment due on such day shall be made
on the next succeeding Business Day and no
interest shall accrue on such payment for the
period from and after such Maturity.
Manner of Payment. The total amount of any
-----------------
principal and interest due on Global Securities
on any Interest Payment Date or at Maturity
shall be paid by the Company to HTSB in
immediately available funds no later than 10:30
A.M. (New York City time) (9:30 A.M. Chicago
time) on such date. The Company will make such
payment on such Global Securities by instructing
HTSB to withdraw funds from an account
maintained by the Company at HTSB or by wire
transfer to HTSB. The Company will confirm any
such instructions in writing to HTSB. Prior to
10 A.M. (New York City time) on the date of
Maturity or as soon as possible thereafter, HTSB
will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously specified by DTC) to an account at
the Federal Reserve Bank of New York previously
specified by DTC, in funds available for
immediate use by DTC, each payment of principal
(together with interest thereon) due on a Global
Security on such date. On each Interest Payment
Date (other than at Maturity), interest payments
shall be made to DTC, in funds available for
immediate use by DTC, in accordance with
Exhibit A, Page 9
<PAGE>
<PAGE>
existing arrangements between HTSB and DTC. On
each such date, DTC will pay, in accordance with
its SDFS operating procedures then in effect,
such amounts in funds available for immediate
use to the respective Participants in whose
names the Book-Entry Notes represented by such
Global Securities are recorded in the book-entry
system maintained by DTC. None of the Company
(as issuer or as paying agent), the Trustee or
HTSB shall have any direct responsibility or
liability for the payment by DTC to such
Participants of the principal of and interest on
the Book-Entry Notes.
Withholding Taxes. The amount of any taxes
-----------------
required under applicable law to be withheld
from any interest payment on a Book-Entry Note
will be determined and withheld by the
Participant, indirect participant in DTC or
other Person responsible for forwarding payments
and materials directly to the beneficial owner
of such Note.
Procedures upon Company Notice to Trustee Regarding
--------------------------------------------------------
Company's Exercise of Optional Redemption. At least
------------------------------------------------
Exercise of 45 days prior to the date on which it intends to
-----------
Optional redeem a Book-Entry Note, the Company will
--------
Redemption notify the Trustee that it is exercising such
----------
option with respect to such Book-Entry Note on
such date.
Trustee Notice to DTC Regarding Company's
-----------------------------------------
Exercise of Optional Redemption. After receipt
-------------------------------
of notice that the Company is exercising its
option to redeem a Book-Entry Note, the Trustee
will, at least 30 days before the redemption
date for such Book-Entry Note, hand deliver to
DTC a notice identifying such Book-Entry Note by
CUSIP number and informing DTC of the Company's
exercise of such option with respect to such
Book-Entry Note.
Deposit of Redemption Price. On or before any
---------------------------
redemption date, the Company shall deposit with
such Trustee an amount of money sufficient to
pay the redemption price, plus interest accrued
to such redemption date, for all the Book-Entry
Notes or portions thereof which are to be repaid
on such redemption date. Such Trustee will use
such money to repay such Book-Entry Notes
pursuant to the terms set forth in such Notes.
Exhibit A, Page 10
<PAGE>
<PAGE>
Payments of Trustee Notice to Company of Option to be
-----------
Principal and Repaid. Upon receipt of notice of
-------------
and Interest exercise of the option for repayment and
------------
Upon Exercise the Global Securities representing the
-------------
of Optional Book-Entry Notes so to be repaid as set
-----------
Repayment forth in such Notes, the Trustee shall
---------
(unless such notice was received pursuant
to the Company's exercise of an optional reset
or an optional extension of maturity, in each of
which cases the relevant procedures set forth
above are to be followed) give notice to the
Company not less than 20 days prior to each
Optional Repayment Date of such Optional
Repayment Date and of the principal amount of
Book-Entry Notes to be repaid on such Optional
Repayment Date.
Deposit of Repayment Price. On or prior to any
--------------------------
Optional Repayment Date, the Company shall
deposit with such Trustee an amount of money
sufficient to pay the optional repayment price,
and accrued interest thereon to such date, of
all the Book-Entry Notes or portions thereof
which are to be repaid on such date. Such
Trustee will use such money to repay such Book-
Entry Notes pursuant to the terms set forth in
such Notes.
Procedure for The Company and the Agents will discuss from
-------------
Rate Setting and time to time the aggregate principal amount of,
----------------
Posting: the issuance price of, and the interest rates to
-------
be borne by, Book-Entry Notes that may be sold
as a result of the solicitation of orders by the
Agents. If the Company decides to set prices
of, and rates borne by, any Book-Entry Notes in
respect of which the Agents are to solicit
orders (the setting of such prices and rates to
be referred to herein as "posting") or if the
Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the Company, each
--------------
Rejection of Agent will advise the Company promptly by
------------
Orders: telephone of all orders to purchase Book-Entry
------
Notes received by such Agent, other than those
rejected by it in whole or in part in the
<PAGE>
reasonable exercise of its discretion. Unless
otherwise agreed by the Company and the Agents,
the Company has the right to accept orders to
purchase Book-Entry Notes and may reject any
such orders in whole or in part.
Exhibit A, Page 11
<PAGE>
<PAGE>
Preparation of If any order to purchase a Book-Entry Note is
--------------
Pricing accepted by or on behalf of the Company, the
-------
Supplement: Company will prepare a pricing supplement (a
----------
"Pricing Supplement") reflecting the terms of
such Book-Entry Note and will arrange to have
ten copies thereof filed with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act and will supply at least
ten copies thereof (and additional copies if
requested) to the Agent which presented the
order (the "Presenting Agent"). The Presenting
Agent will cause a Prospectus and Pricing
Supplement to be delivered to the purchaser of
such Book-Entry Note.
One copy of such filed document will be sent by
telecopy or overnight express (for delivery not
later than 11:00 A.M. on the Business Day next
following the trade date) to Salomon Brothers
Inc, 8800 Hidden River Parkway, Tampa, Florida
33637 facsimile: (813) 558-4123, Attention:
Enrique Castro; or Merrill Lynch & Co. at the
following address: Tritech Services, #4
Corporate Place, Corporate Park 287, Piscataway,
New Jersey 08854, telecopy No. (201) 878-6530;
Attention: Nachman Kimerling, Final Prospectus
Unit, as appropriate.
For record keeping purposes, one copy of each
Pricing Supplement shall also be mailed or
telecopied to Merrill Lynch & Co. at the
following address: Product Management - MTNs,
Merrill Lynch & Co., Merrill Lynch World
Headquarters, World Financial Center, North
Tower, 23rd Floor, New York, New York 10281-
1323.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will affix the
Pricing Supplement to Prospectuses prior to
their use. Outdated Pricing Supplements (other
than those retained for files), will be
destroyed.
Suspension of Subject to the Company's representations,
-------------
Solicitation; warranties and covenants contained in the Agency
------------
Amendment or Agreement, the Company may instruct the Agents
------------
Supplement: to suspend at any time, for any period of time
---------- or permanently, the solicitation of orders to
Exhibit A, Page 12
<PAGE>
<PAGE>
purchase Book-Entry Notes. Upon receipt of such
instructions, the Agents will forthwith suspend
solicitation until such time as the Company has
advised them that such solicitation may be
resumed.
In the event that at the time the Company
suspends solicitation of purchases there shall
be any orders outstanding for settlement, the
Company will promptly advise the Agents, the
Trustee and HTSB whether such orders may be
settled and whether copies of the Prospectus as
in effect at the time of the suspension,
together with the appropriate Pricing
Supplement, may be delivered in connection with
the settlement of such orders. The Company will
have the sole responsibility for such decision
and for any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of such
Prospectus may not be so delivered.
If the Company decides to amend or supplement
the Registration Statement (as defined in the
Agency Agreement) or the Prospectus, it will
promptly advise the Agents and furnish the
Agents with the proposed amendment or supplement
and with such certificates and opinions as are
required, all to the extent required by and in
accordance with the terms of the Agency
Agreement. Subject to the provisions of the
Agency Agreement, the Company may file with the
Commission any such supplement to the Prospectus
relating to the Notes. The Company will provide
the Agents, the Trustee and HTSB with copies of
any such supplement, and confirm to the Agents
that such supplement has been filed with the
Commission pursuant to the applicable paragraph
of Rule 424(b).
Procedures For When the Company has determined to change the
--------------
Rate Changes: interest rates of Book-Entry Notes being
------------
offered, it will promptly advise the Agents and
the Agents will forthwith suspend solicitation
of orders. The Agents will telephone the
Company with recommendations as to the changed
interest rates. At such time as the Company has
advised the Agents of the new interest rates,
the Agents may resume solicitation of orders.
Until such time only "indications of interest"
may be recorded. Within two Business Days after
any sale of Book-Entry Notes, the Company will
Exhibit A, Page 13
<PAGE>
<PAGE>
file with the Securities and Exchange Commission
a Pricing Supplement to the Prospectus relating
to such Book-Entry Notes that reflects the
applicable interest rates and other terms and
will deliver copies of such Pricing Supplement
to the Agents.
Delivery of A copy of the Prospectus and a Pricing
-----------
Prospectus: Supplement relating to a Book-Entry Note must
----------
accompany or precede the earliest of any written
offer of such Book-Entry Note, confirmation of
the purchase of such Book-Entry Note and payment
for such Book-Entry Note by its purchaser. If
notice of a change in the terms of the Book-
Entry Notes is received by the Agents between
the time an order for a Book-Entry Note is
placed and the time written confirmation thereof
is sent by the Presenting Agent to a customer or
his agent, such confirmation shall be
accompanied by a Prospectus and Pricing
Supplement setting forth the terms in effect
when the order was placed. Subject to
"Suspension of Solicitation; Amendment or
Supplement" above, the Presenting Agent will
deliver a Prospectus and Pricing Supplement as
herein described with respect to each Book-Entry
Note sold by it. The Company will make such
delivery if such Book-Entry Note is sold
directly by the Company to a purchaser (other
than an Agent).
Confirmation: For each order to purchase a Book-Entry Note
-------------
solicited by any Agent and accepted by or on
behalf of the Company, the Presenting Agent will
issue a confirmation to the purchaser, with a
copy to the Company, setting forth the details
set forth above and delivery and payment
instructions.
Settlement: The receipt by the Company of immediately
----------
available funds in payment for a Book-Entry Note
and the authentication and issuance of the
Global Security representing such Book-Entry
Note shall constitute "settlement" with respect
to such Book-Entry Note. All orders accepted by
the Company will be settled on the fifth
Business Day following the date of sale of such
Book-Entry Note pursuant to the timetable for
settlement set forth below unless the Company
and the purchaser agree to settlement on another
day which shall be no earlier than the next
Business Day following the date of sale.
Exhibit A, Page 14
<PAGE>
<PAGE>
Settlement Settlement Procedures with regard to
----------
Procedures: each Book-Entry Note sold by the Company through
----------
any Agent, as agent, shall be as follows:
A. The Presenting Agent will advise the
Company by telephone of the following
settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-
Entry Note, the interest rate or, in
the case of a Floating Rate Book-
Entry Note, the Base Rate, initial
interest rate (if known at such
time), Index Maturity, Interest Reset
Period, Interest Reset Dates, Spread
or Spread Multiplier (if any),
minimum interest rate (if any) and
maximum interest rate (if any).
4. Interest Payment Dates and the
Interest Payment Period.
5. Redemption and repayment provisions,
if any.
6. Settlement date.
7. Price.
8. Presenting Agent's commission,
determined as provided in Section 2
of the Agency Agreement.
9. Whether such Book-Entry Note is
issued at an original issue discount
and, if so, the total amount of OID,
the yield to maturity and the initial
accrual period OID.
B. The Company will assign a CUSIP number to
the Global Security representing such
Book-Entry Note and then advise HTSB by
telephone (confirmed in writing at any
time on the same date) or electronic
transmission of the information set forth
in Settlement Procedure "A" above, such
CUSIP number and the name of the
Presenting Agent. The Company will also
Exhibit A, Page 15
<PAGE>
<PAGE>
notify the Presenting Agent by telephone
of such CUSIP number as soon as
practicable.
C. HTSB will enter a pending deposit message
through DTC's Participant Terminal System
providing the following settlement
information to DTC (which shall route such
information to Standard & Poor's
Corporation), the Presenting Agent and,
upon request, the Trustee:
1. The information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate Book-
Entry Note or a Floating Rate Book-
Entry Note.
3. Initial Interest Payment Date for
such Book-Entry Note, number of days
by which such date succeeds the
related Regular Record Date and
amount of interest payable on such
Interest Payment Date.
4. The Interest Payment Period.
5. CUSIP number of the Global Security
representing such Book-Entry Note.
6. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
D. To the extent the Company has not already
done so, the Company will deliver to the
Trustee a Global Security in a form that
has been approved by the Company, the
Agents and the Trustee.
E. The Trustee will complete such Book-Entry
Note, stamp the appropriate legend, as
instructed by DTC, if not already set
forth thereon, and authenticate the Global
Security representing such Book-Entry
Note.
F. DTC will credit such Book-Entry Note to
HTSB's participant account at DTC.
Exhibit A, Page 16
<PAGE>
<PAGE>
G. HTSB will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Book-
Entry Note to HTSB's participant account
and credit such Book-Entry Note to the
Presenting Agent's participant account and
(ii) debit the Presenting Agent's
settlement account and credit HTSB's
settlement account for an amount equal to
the price of such Book-Entry Note less the
Presenting Agent's commission. The entry
of such a deliver order shall constitute a
representation and warranty by HTSB to DTC
that (i) the Global Security representing
such Book-Entry Note has been issued and
authenticated and (ii) HTSB is holding
such Global Security pursuant to the
Medium-Term Note Certificate Agreement
between HTSB and DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Book-Entry Note to the
Presenting Agent's participant account and
credit such Book-Entry Note to the
participant accounts of the Participants
with respect to such Book-Entry Note and
(ii) to debit the settlement accounts of
such Participants and credit the
settlement account of the Presenting Agent
for an amount equal to the price of such
Book-Entry Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures
in effect on the settlement date.
J. HTSB will, upon receipt of funds from the
Presenting Agent in accordance with
Settlement Procedure "G", wire transfer to
account No. 23-2333-3, LaSalle National
Bank, Chicago, Illinois, funds available
for immediate use in the amount
transferred to HTSB in accordance with
Settlement Procedure "G".
K. The Presenting Agent will confirm the
purchase of such Book-Entry Note to the
purchaser either by transmitting to the
Exhibit A, Page 17
<PAGE>
<PAGE>
Participants with respect to such
Book-Entry Note a confirmation order or
orders through DTC's institutional
delivery system or by mailing a written
confirmation to such purchaser.
Settlement For orders of Book-Entry Notes solicited
----------
Procedures by any Agent and accepted by the Company
----------
Timetable: for settlement on the first Business Day after
---------
the sale date, Settlement Procedures "A" through
"K" set forth above shall be completed as soon
as possible but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
---------- -----
A 11:00 A.M. on the sale date
(10:00 A.M. Chicago time)
B 12:00 Noon on the sale date
(11:00 A.M. Chicago time)
C 2:00 P.M. on the sale date
(1:00 P.M. Chicago time)
D 3:00 P.M. on the day before
settlement (2:00 P.M. Chicago
time)
E 9:00 A.M. on settlement date
(8:00 A.M. Chicago time)
F 10:00 A.M. on settlement date
(9:00 A.M. Chicago time)
G-H 2:00 P.M. on settlement date
(1:00 P.M. Chicago time)
I 4:45 P.M. on settlement date
(3:45 P.M. Chicago time)
J-K 5:00 P.M. on settlement date
(4:00 P.M. Chicago time)
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable but no
later than 11:00 A.M. and 12:00 Noon on the
first Business Day after the sale date and
no later than 2:00 P.M. on the Business Day
Exhibit A, Page 18
<PAGE>
<PAGE>
before the settlement date, respectively.
If the initial interest rate for a Floating
Rate Book-Entry Note has not been determined
at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has
been determined but no later than 12:00 Noon
and 2:00 P.M. (New York City time) (11:00
A.M. and 1:00 P.M., respectively, Chicago
time), respectively, on the Business Day
before the settlement date. Settlement
Procedure "I" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, HTSB will deliver
to DTC, through DTC's Participant Terminal
System, a cancellation message to such
effect by no later than 2:00 P.M. (New York
City time) (1:00 P.M. Chicago time) on the
Business Day immediately preceding the
scheduled settlement date.
Failure to Settle: If HTSB fails to enter an SDFS deliver order
-----------------
with respect to a Book-Entry Note pursuant
to Settlement Procedure "G", HTSB may
deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable, a
withdrawal message instructing DTC to debit
such Book-Entry Note to HTSB's participant
account. DTC will process the withdrawal
message, provided that HTSB's participant
account contains a principal amount of the
Global Security representing such Book-Entry
Note that is at least equal to the principal
amount to be debited. If a withdrawal
message is processed with respect to all the
Book-Entry Notes represented by a Global
Exhibit A, Page 19
<PAGE>
<PAGE>
Security, the Trustee will cancel such
Global Security in accordance with the
Indenture and so advise the Company and
HTSB, and HTSB will make appropriate entries
in its records. The CUSIP number assigned
to such Global Security shall, in accordance
with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned. If
a withdrawal message is processed with
respect to one or more, but not all, of the
Book-Entry Notes represented by a Global
Security, HTSB will exchange such Book-Entry
Note for two Global Securities, one of which
shall represent such Book-Entry Notes and
shall be canceled immediately after issuance
and the other of which shall represent the
other Book-Entry Notes previously
represented by the surrendered Global
Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a Person, including an
indirect participant in DTC, acting on
behalf of such purchaser), such Participants
and, in turn, the Presenting Agent may enter
SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures "H" and "G", respectively.
Thereafter, HTSB will deliver the withdrawal
message and take the related actions
described in the preceding paragraph. If
such failure shall have occurred for any
reason other than a default by the
Presenting Agent in the performance of its
obligations hereunder and under the Agency
Agreement, then the Company will reimburse
the Presenting Agent or HTSB, as applicable,
on an equitable basis for the loss of the
use of the funds during the period when they
were credited to the account of the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect.
In the event of a failure to settle with
respect to one or more, but not all, of the
Book-Entry Notes to have been represented by
a Global Security, HTSB will provide, in
accordance with Settlement Procedure "E",
for the authentication and issuance of a
Global Security representing the other
Book-Entry Notes to have been represented by
such Global Security and will make
appropriate entries in its records.
Trustees and HTSB Nothing herein shall be deemed to require
-----------------
Exhibit A, Page 20
<PAGE>
<PAGE>
Not to Risk Funds: the Trustee or HTSB to risk or expend its
-----------------
own funds in connection with any payment to
the Company, DTC, the Agents or the
purchaser, it being understood by all
parties that payments made by the Trustee or
HTSB to the Company, DTC, the Agents or the
purchaser shall be made only to the extent
that funds are provided to the Trustee or
HTSB for such purpose.
Authenticity of The Company will cause the Trustee to
---------------
Signatures: furnish HTSB and the Agents from time to
----------
time with the specimen signatures of each of
the Trustee's officers, employees or agents
who has been authorized by the Trustee to
authenticate Book-Entry Notes, but neither
HTSB nor any Agent will have any obligation
or liability to the Company or the Trustee
in respect of the authenticity of the
signature of any officer, employee or agent
of the Company or the Trustee on any Book-
Entry Note.
Payment of Each Agent shall forward to the Company, on
----------
Expenses: a monthly basis, a statement of the
--------
out-of-pocket expenses (including without
limitation advertising expenses) incurred by
such Agent during that month that are
reimbursable to it pursuant to the terms of
the Agency Agreement, to the extent such
expenses have been authorized by the
Company. The Company will remit payment to
the Agents currently on a monthly basis.
Advertising The Company will determine with the Agents
-----------
Costs: the amount of advertising that may be
-----
appropriate in soliciting offers to purchase
the Book-Entry Notes. Advertising expenses
will be paid by the Company.
Periodic Statements Periodically, HTSB will send to the Company
-------------------
from HTSB: a statement setting forth the principal
---------
amount of Book-Entry Notes Outstanding as of
that date and setting forth a brief
description of any sales of Book-Entry Notes
which the Company has advised HTSB but which
have not yet been settled.
PART II
Administrative Procedures for Certificated Notes
------------------------------------------------
Exhibit A, Page 21
<PAGE>
<PAGE>
HTSB will serve as registrar and transfer agent in
connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated and
--------
issued as of the date of its authentication
by the Trustee. Each Certificated Note will
bear an Original Issue Date, which will be
(i) with respect to an original Certificated
Note (or any portion thereof), its original
issuance date (which will be the settlement
date) and (ii) with respect to any
Certificated Note (or portion thereof)
issued subsequently upon transfer or
exchange of a Certificated Note or in lieu
of a destroyed, lost or stolen Certificated
Note, the Original Issue Date of the
predecessor Certificated Note, regardless of
the date of authentication of such
subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in
------------
fully registered form without coupons.
Transfers and A Certificated Note may be presented for
-------------
for Exchanges: transfer or exchange at the principal
-------------
corporate trust office in the City of New
York of [HTSB]. Certificated Notes will be
exchangeable for other Certificated Notes
having identical terms but different
authorized denominations without service
charge. Certificated Notes will not be
exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date
----------
not less than nine months nor more than
thirty years after the settlement date for
such Note.
Denominations: The denomination of any Certificated Note
-------------
denominated in U.S. dollars will be a
minimum of $1,000 or any amount in excess
thereof that is an integral multiple of
$1,000. The authorized denominations of
Certificated Notes denominated in any other
currency will be specified pursuant to
"Settlement Procedures" below.
Interest: General. Interest, if any, on each
-------- -------
Certificated Note will accrue from the
original issue date for the first interest
period or the last date to which interest
has been paid, if any, for each subsequent
Exhibit A, Page 22
<PAGE>
<PAGE>
interest period, and will be calculated and
paid in the manner described in such Note
and in the Prospectus, as supplemented by
the applicable Pricing Supplement. Unless
otherwise specified therein, each payment of
interest on a Certificated Note will include
interest accrued to but excluding the
Interest Payment Date (provided that, in the
case of Certificated Notes which reset daily
or weekly, interest payments will include
accrued interest to and including the
Regular Record Date immediately preceding
the Interest Payment Date) or to but
excluding Maturity (other than a Maturity of
a Fixed Rate Certificated Note occurring on
the 31st day of a month, in which case such
payment of interest will include interest
accrued to but excluding the 30th day of
such month).
Regular Record Dates. The Regular Record
---------------------
Dates with respect to any Interest Payment
Date shall be the date fifteen calendar days
immediately preceding such Interest Payment
Date (whether or not a Business Day).
Fixed Rate Certificated Notes. Unless
------------------------------
otherwise specified pursuant to Settlement
Procedure "A" below, interest payments on
Fixed Rate Certificated Notes will be made
semiannually on January 15 and July 15 of
each year and at Maturity; provided,
--------
however, that if any Interest Payment Date
-------
for a Fixed Rate Certificated Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall accrue on
such payment for the period from and after
such Interest Payment Date; provided
--------
further, that in the case of a Fixed Rate
-------
Certificated Note issued between a Regular
Record Date and an Interest Payment Date,
the first interest payment will be made on
the Interest Payment Date following the next
succeeding Regular Record Date.
Floating Rate Certificated Notes. Interest
--------------------------------
payments will be made on Floating Rate
Certificated Notes monthly, quarterly, semi-
annually or annually. Interest will be
payable, in the case of Floating Rate
Certificated Notes with a monthly Interest
Exhibit A, Page 23
<PAGE>
<PAGE>
Payment Period, on the third Wednesday of
each month; with a quarterly Interest
Payment Period, on the third Wednesday of
March, June, September and December of each
year; with a semi-annual Interest Payment
Period, on the third Wednesday of the two
months specified pursuant to Settlement
Procedure "A" below; and with an annual
Interest Payment Period, on the third
Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided,
--------
however, that if an Interest Payment Date
-------
for a Floating Rate Certificated Note would
otherwise be a day that is not a Business
Day with respect to such Floating Rate
Certificated Note, such Interest Payment
Date will be the next succeeding Business
Day with respect to such Floating Rate
Certificated Note, except in the case of a
Floating Rate Certificated Note for which
the Base Rate is LIBOR, if such Business Day
is in the next succeeding calendar month,
such Interest Payment Date will be the
immediately preceding Business Day; and
provided further, that in the case of a
----------------
Floating Rate Certificated Note issued
between a Regular Record Date and an
interest Payment Date, the first interest
payment date will be made on the Interest
Payment Date following the next succeeding
Regular Record Date.
Calculation of Fixed Rate Certificated Note.
-------------- -----------------------------
Interest: Interest on Fixed Rate Certificated Notes
--------
(including interest for partial periods)
will be calculated on the basis of a 360-day
year of twelve 30-day months.
Floating Rate Certificated Notes. Interest
--------------------------------
rates on Floating Rate Certificated Notes
will be determined as set forth in the form
of Notes. Interest on Floating Rate
Certificated Notes, except as otherwise set
forth therein, will be calculated on the
basis of actual days elapsed and a year of
360 days, except that in the case of a
Floating Rate Certificated Note for which
the Base Rate is Treasury Rate, interest
will be calculated on the basis of the
actual number of days in the year.
Payments of HTSB will pay the principal amount of
-----------
Exhibit A, Page 24
<PAGE>
<PAGE>
Principal and each Certificated Note at Maturity upon
-------------
Interest: presentation of such Certificated Note to
--------
HTSB. Such payment, together with payment
of interest due at Maturity of such
Certificated Note, will be made in funds
available for immediate use by HTSB and in
turn by the Holder of such Certificated
Note. Certificated Notes presented to HTSB
at Maturity for payment will be canceled by
the Trustee in accordance with the
Indenture. All interest payments on a
Certificate Note (other than interest due at
Maturity) will be made by check drawn on
HTSB (or another Person appointed by HTSB)
and mailed by HTSB to the Person entitled
thereto as provided in such Note and the
Indenture; provided, however, that the
-----------------
holder of $10,000,000 (or the equivalent
thereof in other currencies) or more of
Certificated Notes with similar tenor and
terms will be entitled to receive payment by
wire transfer in U.S. dollars. Following
each Regular Record Date and Special Record
Date, HTSB will furnish the Company and the
Trustee with a list of interest payments to
be made on the following Interest Payment
Date for each Certificated Note and in total
for all Certificated Notes. Interest at
Maturity will be payable to the Person to
whom the payment of principal is payable.
HTSB will provide monthly to the Company
lists of principal and interest, to the
extent ascertainable, to be paid on
Certificated Notes maturing (on a Maturity
or Redemption Date or otherwise)in the next
month.
HTSB will be responsible for withholding
taxes on interest paid on Certificated Notes
as required by applicable law.
If any interest Payment Date for or the
Maturity of a Certificated Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall accrue on
such payment for the period from and after
such Interest Payment Date or Maturity, as
the cause may be.
Procedures upon Company Notice to Trustee Regarding
--------------------------------------------------------
Company's Exercise Exercise of Optional Redemption. At least
----------------------------------------------------
Exhibit A, Page 25
<PAGE>
<PAGE>
of Optional 45 days prior to the date on which it
-----------
Redemption intends to redeem a Certificated Note, the
----------
Company will notify the Trustee that it is
exercising such option with respect to such
Certificated Note on such date.
Trustee Notice to Holders Regarding
-----------------------------------
Company's Exercise of Optional Redemption.
-----------------------------------------
After receipt of notice that the Company is
exercising its option to redeem a
Certificated Note, the Trustee will, at
least 30 days before the redemption date for
such Certificated Note, mail a notice, first
class, postage prepaid, to the Holder of
such Certificated Note informing such Holder
of the Company's exercise of such option
with respect to such Certificated Note.
Deposit of Redemption Price. On or before
---------------------------
any redemption date, the Company shall
deposit with such Trustee an amount of money
sufficient to pay the redemption price, plus
interest accrued to such redemption date,
for all the Certificated Notes or portions
thereof and which are to be repaid on such
redemption date. Such Trustee will use such
money to repay such Certificated Notes
pursuant to the terms set forth in such
Notes.
Payments of Trustee Notice to Company of Option to be
--------------------------------------------------------------
Principal and Repaid. Upon receipt of notice of
---------------------------
Interest Upon exercise of the option for repayment and
-------------
Exercise of the Global Securities representing the
-----------
Optional Repayment Certificated Notes so to be repaid as set
------------------
forth in such Notes, the Trustee shall
(unless such notice was received pursuant to
the Company's exercise of an optional reset
or an optional extension of maturity, in
each of which cases the relevant procedures
set forth above are to be followed) give
notice to the Company not less than 20 days
prior to each Optional Repayment Date of
such Optional Repayment Date and of the
principal amount of Certificated Notes to be
repaid on such Optional Repayment Date.
Deposit of Repayment Price. On or prior to
--------------------------
any Optional Repayment Date, the Company
shall deposit with such Trustee an amount of
money sufficient to pay the optional
repayment price, and accrued interest
Exhibit A, Page 26
<PAGE>
<PAGE>
thereon to such date, of all the
Certificated Notes or portions thereof which
are to be repaid on such date. Such Trustee
will use such money to repay such
Certificated Notes pursuant to the terms set
forth in such Notes.
Procedure for Rate The Company and the Agents will discuss from
------------------
Setting and time to time the aggregate principal amount
-----------
Posting: of, the issuance price of, and the interest
-------
rates to be borne by, Notes that may be sold
as a result of the solicitation of orders by
the Agents. If the Company decides to set
prices of, and rates borne by, any Notes in
respect of which the Agents are to solicit
orders (the setting of such prices and rates
to be referred to herein as "posting") or if
the Company decides to change prices or
rates previously posted by it, it will
promptly advise the Agents of the prices and
rates to be posted.
Acceptance and Unless otherwise instructed by the
--------------
Rejection of Orders: Company, each Agent will advise the Company
--------------------
promptly by telephone of all orders to
purchase Certificated Notes received by such
Agent, other than those rejected by it in
whole or in part in the reasonable exercise
of its discretion. Unless otherwise agreed
by the Company and the Agents, the Company
has the sole right to accept orders to
purchase Certificated Notes and may reject
any such orders in whole or in part.
Preparation of If any order to purchase a Certificated
--------------
Pricing Note is accepted by or on behalf of the
-------
Supplement: Company, the Company will prepare a pricing
-----------
supplement (a "Pricing Supplement")
reflecting the terms of such Certified Note
and will arrange to have ten copies thereof
filed with the Commission in accordance with
the applicable paragraph of Rule 424(b)
under the Act and will supply at least ten
copies thereof (and additional copies if
requested) to the Agent which presented the
order (the "Presenting Agent"). The
Presenting Agent will cause a Prospectus and
Pricing Supplement to be delivered to the
purchaser of such Certificated Note.
One copy of such filed document will be sent
by telecopy or overnight express (for
Exhibit A, Page 27
<PAGE>
<PAGE>
delivery not later than 11:00 A.M. on the
Business Day next following the trade date)
to Salomon Brothers Inc, 8800 Hidden River
Parkway, Tampa, Florida 33637 facsimile:
(813) 558-4123, Attention: Enrique Castro;
or Merrill Lynch & Co. at the following
address: Tritech Services, #4 Corporate
Place, Corporate Park 287, Piscataway, New
Jersey 08854, telecopy No. (201) 878-6530;
Attention: Nachman Kimerling, Final
Prospectus Unit, as appropriate.
For record keeping purposes, one copy of
each Pricing Supplement shall also be mailed
or telecopied to Merrill Lynch & Co., at the
following address: Product Management -
MTNs, Merrill Lynch & Co., Merrill Lynch
World Headquarters, World Financial Center,
North Tower, 23rd Floor, New York, New York
10281-1323.
In each instance that a Pricing Supplement
is prepared, the Presenting Agent will affix
the Pricing Supplement to Prospectuses prior
to their use. Outdated Pricing Supplements
(other than those retained for files), will
be destroyed.
Suspension of Subject to the Company's representations,
-------------
Solicitation warranties and covenants contained in the
------------
Amendment or Agency Agreement, the Company may instruct
------------
Supplement: the Agents to suspend at any time for any
-----------
period of time or permanently, the
solicitation of orders to purchase
Certificated Notes. Upon receipt of such
instructions, the Agents will forthwith
suspend solicitation until such time as the
Company has advised them that such
solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly advise
the Agents, the Trustee and HTSB whether
such orders may be settled and whether
copies of the Prospectus as in effect at the
time of the suspension, together with the
appropriate Pricing Supplement, may be
delivered in connection with the settlement
of such orders. The Company will have the
sole responsibility for such decision and
Exhibit A, Page 28
<PAGE>
<PAGE>
for any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
If the Company decides to amend or
supplement the Registration Statement or the
Prospectus, it will promptly advise the
Agents and furnish the Agents with the
proposed amendment or supplement and with
such certificates and opinions as are
required, all to the extent required by and
in accordance with the terms of the Agency
Agreement. Subject to the provisions of the
Agency Agreement, the Company may file with
the Commission any supplement to the
Prospectus relating to the Notes. The
Company will provide the Agents, the Trustee
and HTSB with copies of any such supplement,
and confirm to the Agents that such
supplement has been filed with the
Commission pursuant to the applicable
paragraph of Rule 424(b).
Procedure for When the Company has determined to change
-------------
Rate Changes: the interest rates of Certificated Notes
-------------
being offered, it will promptly advise the
Agents and the Agents will forthwith suspend
solicitation of orders. The Agents will
telephone the Company with recommendations
as to the changed interest rates. At such
time as the Company has advised the Agents
of the new interest rates, the Agents may
resume solicitation of orders. Until such
time only "indications of interest" may be
recorded. Within two business days after
any sale of Notes, the Company will file
with the Securities and Exchange Commission
a Pricing Supplement to the Prospectus
relating to such Notes that reflects the
applicable interest rates and other terms
and will deliver copies of such Pricing
Supplement to the Agents.
Delivery of A copy of the Prospectus and a Pricing
-----------
Prospectus: Supplement relating to a Certificated Note
-----------
must accompany or precede the earliest of
any written offer of such Certificated Note,
confirmation of the purchase of such
Certificated Note and payment for such
Certificated Note by its purchaser. If
notice of a change in the terms of the
Exhibit A, Page 29
<PAGE>
<PAGE>
Certificated Notes is received by the Agents
between the time an order for a Certificated
Note is placed and the time written
confirmation thereof is sent by the
Presenting Agent to a customer or his agent,
such confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting
forth the terms in effect when the order was
placed. Subject to "Suspension of
Solicitation; Amendment or Supplement"
above, the Presenting Agent will deliver a
Prospectus and Pricing Supplement as herein
described with respect to each Certificated
Note sold by it. The Company will make such
delivery if such Certificated Note is sold
directly by the Company to a purchaser
(other than any Agent).
Confirmation: For each order to purchase a Certificated
-------------
Note solicited by any Agent and accepted by
or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company,
setting forth the details set forth above
and delivery and payment instructions.
Settlement: The receipt by the Company of immediately
----------
available funds in exchange for an
authenticated Certificated Note delivered to
the Presenting Agent and the Presenting
Agent's delivery of such Certificated Note
against receipt of immediately available
funds shall, with respect to such
Certificated Note, constitute "settlement".
All orders accepted by the Company will be
settled on the fifth Business Day following
the date of sale pursuant to the timetable
for settlement set forth below, unless the
Company and the purchaser agree to
settlement on another day which shall be no
earlier than the next Business Day following
the date of sale.
Settlement Settlement Procedures with regard to each
----------
Procedures: Certificated Note sold by the Company
-----------
through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the
Company by telephone of the following
settlement information:
Exhibit A, Page 30
<PAGE>
<PAGE>
1. Name in which such Certificated
Note is to be registered
("Registered Owner").
2. Address of the Registered Owner
and address for payment of
principal and interest.
3. Taxpayer identification number of
the Registered Owner (if
available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the interest
rate or, in the case of a
Floating Rate Certificated Note,
the initial interest rate (if
known at such time), Base Rate,
Index Maturity, Interest Reset
Period, Interest Reset Dates,
Spread or Spread Multiplier (if
any), minimum interest rate (if
any) and maximum interest rate
(if any).
7. Interest Payment Dates and the
Interest Payment Period.
8. Specified Currency and whether
the option to elect payment in a
Specified Currency applies and if
the Specified Currency is not
U.S. dollars, the authorized
denominations.
9. Redemption and repayment
provisions, if any.
10. Settlement date.
11. Price (including currency).
12. Presenting Agent's commission,
determined as provided in Section
2 of the Agency Agreement.
13. Whether such Certificated Note is
issued at an original issue
Exhibit A, Page 31
<PAGE>
<PAGE>
discount, and, if so, the total
amount of OID, the yield to
maturity and the initial accrual
period OID.
B. The Company will advise HTSB by
telephone (confirmed in writing at any
time on the sale date) or electronic
transmission of the information set
forth in Settlement Procedure "A"
above and the name of the Presenting
Agent.
C. The Company will deliver to HTSB a
pre-printed four-ply packet for such
Certificated Note, which packet will
contain the following documents in
forms that have been approved by
Company, the Agents and the Trustee:
1. Certificated Note with customer
confirmation.
2. Stub One - For Trustee.
3. Stub Two - For the Presenting
Agent.
4. Stub Three - For the Company.
D. The Trustee will complete such
Certificated Note and will
authenticate such Certificated Note
and deliver it (with the confirmation)
and Stubs One and Two to the
Presenting Agent, and the Presenting
Agent will acknowledge receipt of the
Note by stamping or otherwise marking
Stub One and returning it to the
Trustee. Such delivery will be made
only against such acknowledgment of
receipt and evidence that instructions
have been given by the Presenting
Agent for payment to account No. 23-
2333-3, LaSalle National Bank,
Chicago, Illinois, in funds available
for immediate use, of an amount equal
to the price of such Certificated Note
less the Presenting Agent's
Commission. In the event that the
instructions given by the Presenting
Agent for payment to the account of
Exhibit A, Page 32
<PAGE>
<PAGE>
the Company are revoked, the Company
will as promptly as possible wire
transfer to the account of the
Presenting Agent an amount of
immediately available funds equal to
the amount of such payment made.
E. The Presenting Agent will deliver such
Certificated Note (with the
confirmation) to the customer against
payment in immediately payable funds.
The Presenting Agent will obtain the
acknowledgement of receipt of such
Certificated Note by retaining Stub
Two.
F. HTSB will send Stub Three to the
Company by first-class mail.
Settlement For orders of Certificated Notes solicited
----------
Procedures by any Agent, as agent, and accepted by the
----------
Timetable: Company, Settlement Procedures "A" through
---------
"F" set forth above shall be completed on
or before the respective times (New York
City time) set forth below:
Settlement
Procedure Time
---------- ----
A 2:00 P.M. on the day
before settlement (1:00 P.M.
Chicago time)
B-C 3:00 P.M. on the day
before settlement (2:00 P.M.
Chicago Time)
D 2:15 P.M. on settlement date
(1:15 P.M. Chicago time)
E 3:00 P.M. on settlement date
(2:00 P.M. Chicago time)
F 5:00 P.M. on settlement date
(4:00 P.M. Chicago time)
Failure to If a purchaser fails to accept delivery of
----------
Settle: and make payment for any Certificated Note,
-------
the Presenting Agent will notify the
Company and HTSB by telephone and return
Exhibit A, Page 33
<PAGE>
<PAGE>
such Certificated Note to the Trustee.
Upon receipt of such notice, the Company
will immediately wire transfer to the
account of the Presenting Agent an amount
equal to the amount previously credited to
the account of Company in respect of such
Certificated Note. Such wire transfer will
be made on the settlement date, if
possible, and in any event not later than
the Business Day following the settlement
date. If the failure shall have occurred
for any reason other than a default by the
Presenting Agent in the performance of its
obligations hereunder and under the Agency
Agreement, then the Company will reimburse
the Presenting Agent or HTSB, as
appropriate, on an equitable basis for its
loss of the use of the funds during the
period when they were credited to the
account of the Company. Immediately upon
receipt of the Certificated Note in respect
of which such failure occurred, the Trustee
will cancel such Certificated Note in
accordance with the Indenture and so advise
the Company and HTSB, and HTSB will make
appropriate entries in its records.
Trustee and HTSB Nothing herein shall be deemed to require
----------------
Not to Risk Funds: the Trustee or HTSB to risk or expend its
-----------------
own funds in connection with any payment to
the Company, the Agents or the purchaser,
it being understood by all parties that
payments made by the Trustee or HTSB to the
Company, the Agents or the purchaser shall
be made only to the extent that funds are
provided to the Trustee or HTSB for such
purpose.
Authenticity of The Company will cause the Trustee to
---------------
Signatures: furnish HTSB and the Agents from time to
-----------
time with the specimen signatures of each
of the Trustee's officers, employees or
agents who has been authorized by the
Trustee to authenticate Certificated Notes,
but neither HTSB nor any Agent will have
any obligation or liability to the Company
or the Trustee in respect of the
authenticity of the signature of any
officer, employee or agent of the Company
or the Trustee on any Certificated Note.
Payment of Each Agent shall forward to the Company,
----------
Exhibit A, Page 34
<PAGE>
<PAGE>
Expenses: on a monthly basis, a statement of the out-
---------
of-pocket expenses (including without
limitation advertising expenses) incurred
by such Agent during that month that are
reimbursable to it pursuant to the terms of
the Agency Agreement, to the extent such
expenses have been authorized by the
Company. The Company will remit payment to
the Agents currently on a monthly basis.
Advertising Costs: The Company will determine with the Agents
------------------
the amount of advertising that may be
appropriate in soliciting orders to
purchase the Certificated Notes.
Advertising expenses will be paid by the
Company.
Periodic Statements Periodically, HTSB will send to the Company
-------------------
from HTSB: a statement setting forth the principal
---------
amount of Certificated Notes Outstanding as
of that date and setting forth a brief
description of any sales of Certificated
Notes which the Company has advised HTSB
but which have not yet been settled.
Exhibit A, Page 35
<PAGE>
<PAGE>
EXHIBIT B
Telephone and Data Systems, Inc.
Medium Term Notes
Due from 9 Months to 30 Years from Date of Issue
TERMS AGREEMENT
, 199
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: Treasurer
Subject in all respects to the terms and conditions of
the Selling Agency Agreement (the "Agreement") dated April 21,
1994, among Salomon Brothers Inc, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and you, the
undersigned agrees to purchase the following Notes of Telephone
and Data Systems, Inc.:
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Discount: % of Principal Amount
Purchase Price: % of Principal Amount [plus
accrued interest from
, 199 ]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
Exhibit B, Page 1
<PAGE>
<PAGE>
deliver the documents
specified in Section 6(b)
of the Agreement,
but in the event that no such
period is specified, then during
the period commencing with the
date hereof and continuing for
five business days thereafter:
[The Purchaser shall have received, appropriately
updated, [a certificate of the Company, dated as of the Closing
Date, to the effect set forth in Section 5(d) of the Agreement
(except that references to the Prospectus shall be to the
Prospectus as supplemented at the time of execution of the Terms
Agreement),] [the opinion of Sidley & Austin, counsel for the
Company, dated as of the Closing Date, to the effect set forth in
Section 5(b) of the Agreement,] [the opinion of Mayer, Brown &
Platt, counsel for the Purchaser, dated as of the Closing Date,
to the effect set forth in Section 5(c) of the Agreement,] [and a
letter of Arthur Andersen & Co., independent accountants for the
Company, dated as of the Closing Date, to the effect set forth in
Section 5(e) of the Agreement.]
[The parties hereto agree that the Company will [not]
bear the expense of the opinion of Mayer, Brown & Platt referred
to above.]]
[Purchaser]
By:
--------------------------------
Accepted:
TELEPHONE AND DATA SYSTEMS, INC.
By:
----------------------------
Title:
Exhibit B, Page 2
<PAGE>
