<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): November 18, 1997
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TDS CAPITAL I
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(Exact name of registrant as specified in its charter)
Delaware 1-13613 36-7208939
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
c/o Telephone and Data Systems, Inc.
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
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N/A
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(Former name or former address, if changed since last report.)
TELEPHONE AND DATA SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Iowa 1-8251 36-2669023
--------------- ----------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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
------------------
N/A
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
The Exhibit Index is located on Page 4 of 4 Total Pages.
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ITEM 5. OTHER EVENTS
On November 18, 1997, TDS Capital I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), completed the issuance
and sale of 6,000,000 8.50% Trust Originated Preferred Securities (liquidation
amount $25 per Preferred Securities) fully and unconditionally guaranteed by
Telephone and Data Systems, Inc., an Iowa corporation (the "Company"), to the
extent set forth in the Prospectus Supplement related to such issuance and
sale. This Current Report on Form 8-K is being filed for the purpose of filing
as exhibits certain documents relating to such sale.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS
The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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SIGNATURE
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 hereunto duly authorized.
TDS CAPITAL I
By: TELEPHONE AND DATA SYSTEMS, INC.,
as Sponsor
By: /s/ LeRoy T. Carlson, Jr.
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LeRoy T. Carlson, Jr.
President and Chief
Executive Officer
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
-----------------------------
LeRoy T. Carlson, Jr.
President and Chief
Executive Officer
Date: December 2, 1997
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
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1.1 Underwriting Agreement, dated November 13, 1997, by
and among the Company, the Trust, TDS Capital II,
TDS Capital III and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated
4.1 Amended and Restated Declaration of Trust, dated as
of November 18, 1997, by and among the Company, as
Sponsor, the Trust, The First National Bank of Chicago,
as Property Trustee, First Chicago Delaware Inc., as
Delaware Trustee and the Regular Trustees named therein
4.2 Preferred Securities Guarantee Agreement, dated as of
November 18, 1997, by and among the Company and The First
National Bank, as Guarantee Trustee for the benefit of the
holders of Trust Preferred Securities of the Trust
4.3 Subordinated Indenture, dated as of October 15, 1997, by
and between the Company and The First National Bank of
Chicago, as Trustee ("Debt Trustee")
4.4 Supplemental Indenture, dated as of November 18, 1997,
by and between the Company and the Debt Trustee
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TELEPHONE AND DATA SYSTEMS, INC.
(an Iowa corporation)
TDS CAPITAL I
TDS CAPITAL II
TDS CAPITAL III
(each, a Delaware business trust)
16,000,000 Trust Preferred Securities
Trust Originated Preferred Securities-SM-("TOPrS-SM-")
(Liquidation Preference $25 per Preferred Security)
UNDERWRITING AGREEMENT
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November 13, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
TDS Capital I, TDS Capital II and TDS Capital III (each a "Trust" and,
collectively, the "Trusts"), statutory business trusts organized under the
Business Trust Act (the "Delaware Trust Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Code, 12 Del. C. Sections 3801 ET SEQ.) and
Telephone and Data Systems, Inc., an Iowa corporation (the "Company" and,
together with the Trusts, the "Offerors"), propose to issue and sell up to
16,000,000 of the Trusts' preferred securities (liquidation preference of $25
per preferred security) representing preferred undivided beneficial interests
in the assets of each Trust ("TOPrS" or the "Trust Preferred Securities") from
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- -SM- "Trust Originated Preferred Securities" and TOPrS" are service of
Merrill Lynch & Co., Inc.
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time to time, in or pursuant to one or more offerings on terms to be
determined at the time of sale.
The payment of periodic cash distributions with respect to the Trust
Preferred Securities and payments on liquidation or redemption with respect
to such Trust Preferred Securities will be each guaranteed by the Company in
the case of each Trust (a "Preferred Securities Guarantee"), in each case
only out of funds held by such Trust, pursuant to the Preferred Securities
Guarantee Agreements (the "Preferred Securities Guarantee Agreements"), to be
entered into between the Company and a guarantee trustee (the "Guarantee
Trustee"), and entitled to the benefits of certain backup undertakings
described in the Prospectus (as defined below) with respect to the Company's
agreement pursuant to the Supplemental Indenture (as defined below) to pay
all expenses relating to administration of the Trusts (the "Undertakings").
The Trust Preferred Securities and the related Preferred Securities Guarantee
are referred to herein as the "Offered Securities."
The entire proceeds from the sale of the Offered Securities will be
combined with the entire proceeds from the sale by the applicable Trust to
the Company of its undivided common beneficial interests in such Trust's
assets represented by common securities (the "Common Securities") and will be
used by the Trust to purchase the unsecured junior subordinated deferrable
interest debentures (the "Subordinated Debentures") of the Company issued by
the Company to such Trust. The Trust Preferred Securities and the Common
Securities for each Trust will be issued pursuant to an Amended and Restated
Declaration of Trust of the applicable Trust (the "Declaration"), among the
Company, as Sponsor, LeRoy T. Carlson, Jr., Murray L. Swanson, and Gregory J.
Wilkinson (the "Regular Trustees"), The First National Bank of Chicago, a
national banking association, as property trustee (the "Property Trustee"),
and First Chicago Delaware Inc., a Delaware corporation (the "Delaware
Trustee" and, together with the Regular Trustees and the Property Trustee,
the "Trustees"), and the holders from time to time of undivided beneficial
interests in the assets of the Trust. The Subordinated Debentures will be
issued pursuant to an indenture (the "Base Indenture"), between the Company
and The First National Bank of Chicago, as trustee (the "Debt Trustee"), and
supplemental indentures to the Base Indenture (the "Supplemental Indentures,"
and together with the Base Indenture and any other amendments or supplements
thereto, the "Indenture"), between the Company and the Debt Trustee.
Whenever the Offerors determine to make an offering of Offered
Securities through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), or through an underwriting syndicate managed
by Merrill Lynch, the Offerors will enter into an agreement (each, a "Terms
Agreement") providing for the sale of such Offered Securities to, and the
purchase and offering thereof by, Merrill Lynch and such other underwriters,
if any, selected by Merrill Lynch (the "Underwriters", which term shall
include Merrill Lynch, whether acting as sole Underwriter or as a member of
an underwriting syndicate, as well as any Underwriter substituted pursuant to
Section 10 hereof). The Terms Agreement relating to the offering of Offered
Securities shall specify the aggregate number of Offered Securities to be
issued (the "Underwritten Securities"), the name of each Underwriter
participating in such offering (subject to substitution as provided in
Section 10 hereof) and the name of any Underwriter other than Merrill Lynch
acting as co-manager in connection with such offering, the aggregate number
of Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis
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and, if on a fixed price basis, the initial offering price, the price at
which the Underwritten Securities are to be purchased by the Underwriters,
the form, time, date and place of delivery and payment of the Underwritten
Securities and any other material variable terms of the Underwritten
Securities. The Terms Agreement, which shall be substantially in the form of
Exhibit A hereto, may take the form of an exchange of any standard form of
written telecommunication between the Offerors and Merrill Lynch, acting for
itself and, if applicable, as representative of any other Underwriters. Each
offering of Underwritten Securities through Merrill Lynch as sole Underwriter
or through an underwriting syndicate managed by Merrill Lynch will be
governed by this Underwriting Agreement, as supplemented by the applicable
Terms Agreement.
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-38355) for the
registration of up to a combination of $400,000,000 of (i) Trust Preferred
Securities, (ii) Preferred Securities Guarantees, and (iii) Subordinated
Debentures, under the Securities Act of 1933, as amended (the "1933 Act"),
and the offering thereof from time to time in accordance with Rule 415 of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). Such registration statement has been declared effective by
the Commission and the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and the Company has filed
such post-effective amendments thereto as may be required prior to the
execution of the applicable Terms Agreement and each such post-effective
amendment has been declared effective by the Commission. Such registration
statement (as so amended, if applicable), including the information, if any,
deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933 Act
Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement"; and the final prospectus and the final prospectus
supplement relating to the offering of the Underwritten Securities, in the
form first furnished to the Underwriters by the Company for use in connection
with the offering of the Underwritten Securities, are collectively referred
to herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
the applicable Terms Agreement; provided, further, that if the Offerors file
a registration statement with the Commission pursuant to Rule 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to "Registration Statement" shall also be deemed
to include the Rule 462(b) Registration Statement; and provided, further,
that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
then all references to "Prospectus" shall also be deemed to include the final
or preliminary prospectus and the applicable term sheet or abbreviated term
sheet (the "Term Sheet"), as the case may be, in the form first furnished to
the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references in this Underwriting Agreement to the date of
the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
Registration Statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was
used after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting
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Agreement, all references to the Registration Statement, Prospectus, Term
Sheet or preliminary prospectus or to any amendment or supplement to any of
the foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included" or
"stated" (or other references of like import) in the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be, prior to the execution of the
applicable Terms Agreement; and all references in this Underwriting Agreement
to amendments or supplements to the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be, after the execution of the applicable Terms Agreement.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) Each Offeror jointly and severally represents and warrants to
Merrill Lynch, as of the date hereof, and to each Underwriter named in the
applicable Terms Agreement, as of the date thereof, and as of the Closing
Time (as defined below) (in each case, a "Representation Date") as follows:
(i) Each of the Offerors meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement (including any Rule 462(b)
Registration Statement) has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement (or
such Rule 462(b) Registration Statement) has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement (including any
Rule 462(b) Registration Statement) and any post-effective amendments
thereto (including the filing of the Company's most recent Annual Report
on Form 10-K with the Commission (the "Annual Report on Form 10-K"))
became effective and at each Representation Date, the Registration
Statement (including any Rule 462(b) Registration Statement) and any
amendments thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus and at the Closing Time,
neither the Prospectus nor any amendments and supplements thereto included
or will include an untrue statement of a material fact or omitted or will
omit to state a material fact necessary in order to make the statements
therein, in the light of the
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circumstances under which they were made, not misleading. If the Offerors
elect to rely upon Rule 434 of the 1933 Act Regulations, the Offerors will
comply with the requirements of Rule 434.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with the offering of Underwritten Securities will,
at the time of such delivery, be identical to any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T. Notwithstanding the
foregoing, the representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or the Prospectus.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the date of the Prospectus and at the Closing Time did not
and will not include an 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.
(iii) The accountants who certified the consolidated financial
statements and supporting schedules included in or incorporated by
reference into the Registration Statement and the Prospectus are
independent public accountants with respect to the Company and its
consolidated subsidiaries as required by the 1933 Act and the 1933 Act
Regulations.
(iv) The consolidated financial statements of the Company included in
the Registration Statement and the Prospectus, together with the related
schedules and notes, as well as those financial statements, schedules and
notes of any other entity included therein, present fairly the financial
position and results of operations of the Company and its subsidiaries on
a consolidated basis, or such other entities, as the case may be, at the
respective dates or for the respective periods to which they apply, and
the statement of operations, stockholders' equity and cash flows of the
Company and its subsidiaries on a consolidated basis, or such other
entities, as the case may be, for the periods specified; such financial
statements have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the respective periods involved; and the supporting schedules included in
the Registration Statement and
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Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus. In addition, any pro forma
financial statements of the Company and its subsidiaries and the related
notes thereto included in the Registration Statement and the Prospectus
present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
to give effect to the transactions and circumstances referred to therein.
(v) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its consolidated subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business,
(B) there have been no transactions entered into by the Trust or the
Company or any of its consolidated subsidiaries other than those in the
ordinary course of business which are material to the Trust or the Company
and its consolidated subsidiaries considered as one enterprise, and
(C) other than regular quarterly dividends, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Iowa, and
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under, or as contemplated under, this
Underwriting Agreement, the applicable Terms Agreement, the Declaration,
the Indenture and the Preferred Securities Guarantee Agreements and to
purchase, own and hold the Common Securities issued by the applicable
Trust. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which it owns or
leases substantial properties or in which the conduct of its business
requires such qualification, except where the failure to be so qualified
or in good standing would not have a material adverse affect on the
Company and its consolidated subsidiaries considered as one enterprise.
(vii) Each of United States Cellular Corporation, United States
Cellular Operating Company, United States Cellular Investment Company, TDS
Telecommunications Corporation, Aerial Communications, Inc. and American
Paging, Inc. (each, a "Subsidiary" and, collectively, the
"Subsidiaries"), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which it owns or
leases
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substantial properties or in which the conduct of its business requires
such qualification, except where the failure to be so qualified or in
good standing would not have a material adverse affect on the Company
and its consolidated subsidiaries considered as one enterprise; except
as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly authorized
and validly issued and is fully paid and non-assessable and is owned
by the Company, directly or through one or more Subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except such security interest, mortgage, pledge, lien,
encumbrance, claim or equity the enforcement of which, individually or in
the aggregate, would not have a material adverse affect on the Company and
its consolidated subsidiaries considered as one enterprise. Other than
the Subsidiaries, there are no "significant subsidiaries" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X promulgated under
the 1933 Act).
(viii) The applicable Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act with
the power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter into
and perform its obligations under this Agreement, the Preferred
Securities, the Common Securities and the Declaration; such Trust is duly
qualified to transact business as a foreign company and is in good
standing in any other jurisdiction in which such qualification is
necessary, except to the extent that the failure to so qualify or be in
good standing would not have a material adverse effect on such Trust; such
Trust is not a party to or otherwise bound by any agreement other than
those described in the Prospectus; such Trust is and will be classified
for United States federal income tax purposes as a grantor trust and not
as an association taxable as a corporation; and such Trust is and will be
treated as a consolidated subsidiary of the Company pursuant to generally
accepted accounting principles.
(ix) The Common Securities have been, or will be at the applicable
Closing Time, duly authorized by a Declaration and, when issued and
delivered by the Trust to the Company against payment therefor as
described in the Registration Statement and Prospectus, will be validly
issued and (subject to the terms of the Declaration) fully paid and non-
assessable undivided beneficial interests in the assets of the Trust and
will conform to all statements relating thereto contained in the
Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Time all of the
issued and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
(x) This Underwriting Agreement has been, and the applicable Terms
Agreement as of the date thereof will have been, duly authorized, executed
and delivered by each of the Offerors.
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(xi) The applicable Declaration has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and
delivered by the Company and the Regular Trustees, and assuming due
authorization, execution and delivery of the Declaration by the Property
Trustee and the Delaware Trustee, the Declaration will, at the Closing
Time, be a valid and binding obligation of the Company and the Regular
Trustees, enforceable against the Company and the Regular Trustees in
accordance with its terms, except to the extent that enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors rights generally or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity) (the "Bankruptcy Exceptions") and will
conform in all material respects to all statements relating thereto in the
Prospectus.
(xii) The applicable Preferred Securities Guarantee Agreement has
been duly authorized by the Company and, at the Closing Time will have
been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery of the Preferred Securities
Guarantee Agreement by the Guarantee Trustee, will constitute a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement thereof
may be limited by the Bankruptcy Exceptions, and the Preferred Security
Guarantees and the Preferred Securities Guarantee Agreements will conform
in all material respects to all statements relating thereto contained in
the Prospectus.
(xiii) The Trust Preferred Securities have been duly authorized by
the applicable Declaration and, when issued and delivered pursuant to this
Underwriting Agreement against payment of the consideration set forth in
Section 2, will be validly issued and (subject to the terms of the
Declaration) fully paid and non-assessable undivided beneficial interests
in the applicable Trust, will be entitled to the benefits of the
Declaration and will conform in all material respects to all statements
relating thereto contained in the Prospectus and such description conforms
to the provisions of the Declaration; the issuance of the Trust Preferred
Securities is not subject to preemptive or other similar rights; and
(subject to the terms of the Declaration) holders of Trust Preferred
Securities will be entitled to the same limitation of personal liability
under Delaware law as extended to stockholders of private corporations for
profit.
(xiv) The Indenture has been duly authorized by the Company and, at
the Closing Time will have been duly executed and delivered by the
Company, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Indenture will conform in all material respects to all
statements relating thereto contained in the Prospectus.
(xv) The Subordinated Debentures have been duly authorized by the
Company and, at the Closing Time, will have been duly executed by the
Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment
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therefor as described in the Prospectus, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, will be in the form
contemplated by, and entitled to the benefits of, the Indenture and will
conform in all material respects to all statements relating thereto in
the Prospectus.
(xvi) The Company's obligations under the Preferred Securities
Guarantees are subordinate and junior in right of payment to all
liabilities of the Company and are PARI PASSU with the most senior
preferred stock issued by the Company.
(xvii) The Subordinated Debentures are subordinated and junior in
right of payment to all "senior indebtedness" (as defined in the applicable
Supplemental Indenture) of the Company.
(xviii) Each of the Regular Trustees is an employee of the Company
and has been duly authorized by the Company to execute and deliver the
Declaration; the Declaration has been, or at the applicable Closing Time
will be, duly executed and delivered by the Regular Trustees and is or
will be, as applicable, a valid and binding obligation of each Regular
Trustee, enforceable against such Regular Trustee in accordance with its
terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xix) The applicable Trust is not in violation of its Declaration
or its certificate of trust as filed with the State of Delaware (the
"Certificate of Trust"); the Trust is not in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Trust is a party or by which it may
be bound, or to which any of the property or assets of the Trust is
subject; and the execution, delivery and performance of this Underwriting
Agreement, the Declaration, the Preferred Securities, the Common
Securities, the Indenture, the Subordinated Debentures, the Preferred
Securities Guarantee Agreements and the Preferred Securities Guarantees
and the consummation of the transactions contemplated herein and therein
and compliance by the Offerors with their respective obligations hereunder
and thereunder have been duly authorized by all necessary action
(corporate or otherwise) on the part of the Trust and do not and will not
result in any violation of the Declaration or Certificate of Trust and do
not and will not conflict with, or result in a breach of any of the terms
or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Trust under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the Trust
is a party or by which it may be bound or to which any of its properties
or assets may be subject, or (B) any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over
the Trust or any of its respective properties or assets.
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(xx) There are no contracts or documents which are required to be
described in the Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits thereto which
have not been so described and filed as required.
(xxi) The Offerors have not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Securities.
(xxii) There are no contracts, agreements or understandings between
the Trust or the Company and any person granting such person the right to
require the Trust or the Company to file a registration statement under
the 1933 Act with respect to any Offered Securities or securities similar
to the Offered Securities of the Trust or the Company owned or to be owned
by such person or to require the Trust or the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Trust or the Company under the 1933
Act.
(xxiii) The authorized, issued and outstanding capital stock of the
Company is as set forth in or incorporated by reference into the
Registration Statement (except for subsequent issuances, if any, pursuant
to reservations or agreements referred to in the Prospectus); all of the
issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
the capital stock of the Company conforms to the description thereof
included in or incorporated by reference into the Registration Statement
and, except as set forth in the Prospectus, is not subject to preemptive
or other similar rights.
(xxiv) Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws or other documents of organization,
and none of the Company or any of its Subsidiaries is in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or
any of its Subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
of its Subsidiaries is subject; the execution, delivery and performance
of this Underwriting Agreement, the applicable Terms Agreement, the
Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debentures, the Preferred Securities
Guarantee Agreements and the Preferred Securities Guarantees and the
consummation of the transactions contemplated herein, therein and in the
Registration Statement and the Prospectus (including the issuance and
sale of the Underwritten Securities and the use of the proceeds from
the sale of the Underwritten Securities as described under the caption
"Use of Proceeds") have been duly authorized by all necessary corporate
action by the Company and will not conflict with or constitute a breach
of, or a default or Repayment Event (as defined below) under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its Subsidiaries
pursuant to the terms of, any contract, indenture,
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mortgage, loan agreement, note, lease or other agreement or instrument
to which the Company or any of its Subsidiaries is a party or by which
the Company or any of them may be bound, or to which any property or
assets of the Company or any of its Subsidiaries is subject; nor will
such action result in a violation of the provisions of the charter or
by-laws of the Company or any of its Subsidiaries or any applicable law,
rule, regulation, judgment, order or administrative or court decree; nor
will such action conflict with or have an adverse effect on any of the
certificates, authorities, licenses or permits of the Company or any of
its Subsidiaries that enable them to carry on the business and
operations now operated by them and which are material to the business
of the Company and its Subsidiaries considered as one enterprise. As
used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(xxv) No labor dispute with the employees of the Company or any of
its Subsidiaries exists or, to the knowledge of the Company, is imminent
which would materially adversely affect the business operations of the
Company and its Subsidiaries considered as one enterprise.
(xxvi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company or the Trust, threatened, against or affecting
the Trust or the Company or any of its consolidated subsidiaries which is
required to be disclosed in or incorporated by reference into the
Registration Statement or, except, in the case of (A) and (B) below, as
disclosed in the Prospectus, which might (A) result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Trust or the
Company and its consolidated subsidiaries considered as one enterprise,
(B) materially and adversely affect the properties or assets of the Trust
or the Company and its consolidated subsidiaries considered as one
enterprise, or (C) materially and adversely affect the consummation of the
transactions contemplated by this Underwriting Agreement, the applicable
Terms Agreement, the Declaration, the Preferred Securities, the Common
Securities, the Indenture, the Subordinated Debentures, the Preferred
Securities Guarantee Agreements or the Preferred Securities Guarantees;
all pending legal or governmental proceedings to which the Trust or the
Company or any of its consolidated subsidiaries is a party or of which any
of their respective properties or assets are the subject which are not
described in or incorporated by reference into the Registration Statement
and the Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material to the Trust
or the Company and its consolidated subsidiaries considered as one
enterprise; and there are no contracts or documents of the Trust or the
Company or any of its consolidated subsidiaries which are required to be
filed or incorporated by reference as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not
been so filed or incorporated by reference.
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(xxvii) The Company and its Subsidiaries own or possess, or can
acquire on reasonable terms, the patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information),
systems or procedures, trademarks, service marks and trade names currently
employed by them in connection with the business now operated by them and
neither the Company nor any of its Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise.
(xxviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
due authorization, execution and delivery by the Trusts or the Company of
this Underwriting Agreement or the applicable Terms Agreement or for the
performance by the Trust or the Company of the transactions contemplated
under the Prospectus, this Underwriting Agreement, such Terms Agreement,
the Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debentures, the Preferred Securities Guarantee
Agreements or the Preferred Securities Guarantees, except as may be
required under the 1933 Act or 1933 Act Regulations, the 1934 Act or 1934
Act Regulations, the 1939 Act, the 1939 Act Regulations or State
securities laws.
(xxix) All taxes and fees required to be paid with respect to the
execution of the Indenture, this Underwriting Agreement, the applicable
Terms Agreement, the Declaration, the Preferred Securities, the Common
Securities, the Indenture, the Subordinated Debentures, the Preferred
Securities Guarantee Agreements or the Preferred Securities Guarantees and
the issuance of the Offered Securities have been paid.
(xxx) The Company and its Subsidiaries possess such certificates,
authorities, licenses or permits issued by the appropriate local, state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, and, except as disclosed in the
Registration Statement or the documents incorporated by reference therein,
none of the Company or any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority, license or permit which, singly or in the
aggregate, if the subject of any unfavorable decision, ruling or finding,
would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its consolidated subsidiaries considered as one enterprise.
(xxxi) The Company and its Subsidiaries have good and marketable
title to all real property owned by the Company and its Subsidiaries
and good title to all other properties owned by them that are material
to the business of the Company and its consolidated
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subsidiaries considered as one enterprise, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind, except (A) as otherwise stated
in the Registration Statement and the Prospectus or (B) those which do
not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company or any of its Subsidiaries. All of the
leases and subleases material to the business of the Company and its
Subsidiaries considered as one enterprise, and under which the Company
or any of its Subsidiaries holds properties described in the Prospectus,
are in full force and effect, and neither the Company nor any of its
Subsidiaries has received any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any of its Subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
Subsidiary of the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxxii) The Indenture, the applicable Preferred Securities Guarantee
Agreement and the applicable Declaration have each been, or at the
applicable Closing Time will each be, duly qualified under the 1939 Act.
(xxxiii) None of the Offerors is, and upon the issuance and sale of
the Underwritten Securities and the issuance of the Subordinated Debentures
and the Common Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").
(xxxiv) To the best of the Company's knowledge and except as otherwise
stated in the Registration Statement and the Prospectus and except as
would not, singly or in the aggregate, materially adversely affect the
business operations of the Company and its consolidated subsidiaries
considered as one enterprise, (A) neither the Company nor any of its
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof including any
judicial or administrative order, consent, decree or judgment, relating to
pollution, the environment, wildlife or to the use, storage, disposal,
transport or handling of hazardous materials (collectively, "Environmental
Laws"), (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its Subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its Subsidiaries relating to any Environmental Laws.
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(b) Any certificate signed by any officer of the Company or any of it
subsidiaries and delivered to any Underwriter or to counsel for the
Underwriters in connection with the offering of the Underwritten Securities
shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate
and, unless subsequently amended or supplemented, at each Representation Date
subsequent thereto.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations, warranties and
agreements herein contained and shall be subject to the terms and conditions
herein set forth.
(b) Payment of the purchase price for the Underwritten Securities shall
be made at the office of Sidley & Austin, One First National Plaza, Suite
4400, Chicago, Illinois 60603, and delivery of the certificates for the
Underwritten Securities shall be made against payment therefor at the office
of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Merrill Lynch World
Headquarters, North Tower, World Financial Center, New York, New York
10281-1209, or (in either case) at such other place or places as shall be
agreed upon by Merrill Lynch and the Company, at 10:00 A.M. (Eastern time) on
the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on
any given day) business day after the date of the applicable Terms Agreement
(unless postponed in accordance with the provisions of Section 10 hereof), or
such other time not later than ten business days after such date as shall be
agreed upon by Merrill Lynch and the Company (such time and date of payment
and delivery being herein called "Closing Time"). Payment shall be made to
the Trust by wire transfer of immediately available funds to a bank account
designated by the Company, against delivery to Merrill Lynch for the
respective accounts of the Underwriters of the Underwritten Securities to be
purchased by them. It is understood that each Underwriter has authorized
Merrill Lynch, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Underwritten Securities which it has
severally agreed to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Underwritten Securities to be purchased
by any Underwriter whose funds have not been received by the Closing Time but
such payment shall not relieve such Underwriter from its obligations
hereunder.
As compensation to the Underwriters for their commitments hereunder
and in view of the fact that the proceeds of the sale of the Trust Preferred
Securities will ultimately be used to purchase the Subordinated Debentures of
the Company, the Company hereby agrees to pay at Closing Time to Merrill
Lynch, for the accounts of the several Underwriters, a commission per Trust
Preferred Security set forth on Schedule A to the applicable Terms Agreement.
At the Closing Time, the Company will pay, or cause to be paid, the
commission payable at such time to the Underwriters under Section 2 hereof by
wire transfer of immediately available funds to a bank account designated by
Merrill Lynch for the account of the Underwriters.
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(c) Certificates for the Underwritten Securities shall be in such
denominations and registered in such names as Merrill Lynch may request in
writing at least one full business day prior to the Closing Time. The
certificates for the Underwritten Securities will be made available for
examination and packaging by Merrill Lynch in The City of New York not later
than 10:00 A.M. (Eastern time) on the last business day prior to Closing Time.
SECTION 3. COVENANTS. Each of the Offerors jointly and severally
covenant with Merrill Lynch and with each Underwriter participating in the
offering of Underwritten Securities as follows:
(a) The Offerors, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the
1933 Act Regulations, if and as applicable, and will notify the
representative(s) of the Underwriters immediately, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information,
and (iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Offerors will promptly effect the filings necessary
pursuant to Rule 424 and will take such steps as it deems necessary to
ascertain promptly whether the Prospectus transmitted for filing under Rule
424 was received for filing by the Commission and, in the event that it was
not, it will promptly file the Prospectus. The Offerors will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Each Offeror will give Merrill Lynch notice of its intention to
file or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish
Merrill Lynch with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which Merrill Lynch or counsel for the
Underwriters shall reasonably object.
(c) The Company has furnished or will deliver to Merrill Lynch and
counsel for the Underwriters, without charge, as many signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) as
Merrill Lynch has requested or shall reasonably request, and as many signed
copies of all consents and certificates of experts as Merrill Lynch has
requested or shall reasonably request, and will also deliver to Merrill
Lynch, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The
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Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to any electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) The Company will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Offerors hereby consent to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Underwritten Securities as contemplated
in this Underwriting Agreement and the applicable Terms Agreement and in the
Registration Statement and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Underwritten Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion
of counsel for the Underwriters or for the Offerors, to amend the
Registration Statement in order that the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or to amend or supplement the Prospectus in order that
the Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements
of the 1933 Act or the 1933 Act Regulations, the Offerors will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment
or supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters, without
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) The Offerors will use their best efforts, in cooperation with the
Underwriters, to qualify the Underwritten Securities and the Subordinated
Debentures for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as Merrill Lynch may
designate and to maintain such qualifications in effect for a period of not
less than one year from the date of the applicable Terms Agreement; provided,
however, that the Company shall not be obligated to file any general consent
to service of process or to qualify as a foreign corporation or as a dealer
in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Underwritten Securities have been so qualified, the Offerors will file such
statements and reports as may be required by the laws of such jurisdiction to
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continue such qualification in effect for a period of not less than one year
from the date of such Terms Agreement.
(g) The Company will timely file such reports pursuant to the 1934 Act
as are necessary in order to make generally available to its security holders
as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of
the 1933 Act.
(h) Each Offeror will use or cause to be used the net proceeds
received by it from the sale of the Underwritten Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) The Company will use its best efforts to effect the listing of the
Underwritten Securities, prior to the Closing Time, on any national
securities exchange or quotation system if and as specified in the applicable
Terms Agreement.
(j) Between the date of the applicable Terms Agreement and the date
which is 30 days after the Closing Time or such other date specified in such
Terms Agreement, the Offerors and the Company's subsidiaries will not,
without the prior written consent of Merrill Lynch, directly or indirectly,
pledge, issue, sell, offer or contract to sell, grant or sell any option or
contract for the sale or purchase of, or otherwise transfer or dispose of,
any Offered Securities or any securities convertible into or exercisable or
exchangeable for Offered Securities or file any registration statement under
the 1933 Act with respect to any of the foregoing.
(k) The Offerors, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
(l) So long as any Underwritten Securities are outstanding, the Trust
will continue its existence in good standing as a business trust under the
Delaware Act with power and authority to own property and conduct its
business as described in the Prospectus and the Trust will remain duly
qualified to transact business as a foreign corporation in good standing in
each jurisdiction in which such qualification is necessary, except to the
extent that the failure to so qualify would not, singly or in the aggregate,
materially adversely affect the operations of the Trust.
(m) The Trust will make generally available to its security holders
and to Merrill Lynch as soon as practicable but not later than 90 days after
the close of the period covered thereby, an earnings statement of the Company
(in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve-month period beginning not later than the
first day of the Trust's fiscal quarter next following the "effective date"
(as defined in said Rule 158) of the Registration Statement.
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SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of the Offerors' obligations under this
Underwriting Agreement and the applicable Terms Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the printing of this Underwriting Agreement, any
Terms Agreement, any agreement among Underwriters, the Indenture, the
Declaration, the Preferred Securities, the Common Securities, the
Subordinated Debentures, the Preferred Securities Guarantee Agreements and
the Preferred Securities Guarantees and such other documents as may be
required in connection with the offering, purchase, sale, issuance or
delivery of the Underwritten Securities, (iii) the preparation, issuance and
delivery of the certificates for the Underwritten Securities to Merrill
Lynch, the Common Securities to the Company and the Subordinated Debentures
to the Trust, including any transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of such securities, (iv) the fees
and disbursements of the Company's counsel and accountants, (v) the
qualification of the Underwritten Securities and the Subordinated Debentures
under securities laws in accordance with the provisions of Section 3(f),
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation
of the Blue Sky surveys and any legal investment survey, (vi) the printing
and delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of the preliminary
prospectuses, of any Term Sheet and of the Prospectus and any amendments or
supplements thereto, (vii) the printing and delivery to the Underwriters of
copies of the Blue Sky surveys and any legal investment surveys, (viii) the
fees and expenses of the Property Trustee, the Delaware Trustee, the
Guarantee Trustee and the Debt Trustee, including the fees and disbursements
of their respective counsel, (ix) any fees payable in connection with the
rating of the Underwritten Securities, (x) the fees and expenses incurred
with respect to any listing of the Underwritten Securities, (xi) the filing
fees incident to the review, if any, by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Underwritten Securities and (xii) the cost of qualifying the Trust Preferred
Securities with The Depository Trust Company.
If the applicable Terms Agreement is terminated by Merrill Lynch in
accordance with the provisions of Section 5 (other than Section 5(i)) or
Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all
of their out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters to purchase and pay for the Underwritten Securities
pursuant to the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company and the Offerors contained in
Section 1 hereof or in certificates of any officer of the Company or any of
its subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Offerors of their covenants and other obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that purpose shall have been
instituted or be pending or threatened by the Commission, and any request
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on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel for the Underwriters.
A prospectus containing information relating to the description of the
Underwritten Securities and the Subordinated Debentures, the specific method
of distribution and similar matters shall have been filed with the Commission
in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or
any required post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A), or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) At Closing Time, Merrill Lynch shall have received:
(1) The opinion, dated as of Closing Time, of Sidley & Austin,
counsel for the Offerors, in form and substance reasonably satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Iowa.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under, or as contemplated under, this Underwriting
Agreement and the applicable Terms Agreement.
(iii) The Company is duly qualified to do business and is in
good standing as a foreign corporation and is in good standing under
the laws of each other state in which it owns or leases material
properties or conducts material business, except where the failure to
be so qualified or in good standing could not reasonably be expected
to have a material adverse effect on the Company and its consolidated
subsidiaries considered as one enterprise.
(iv) Each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of the state of its incorporation and, to the knowledge of
such counsel, is duly qualified to do business and is in good
standing as a foreign corporation and is in good standing under
the laws of each other state in which it owns or leases material
properties or conducts material business, except where the failure
to be so qualified or in good standing could not reasonably be
expected to have a material adverse effect on the Company and its
consolidated subsidiaries considered as one enterprise; nothing has
come to our attention which causes us to believe that the
outstanding shares of capital stock of each Subsidiary held of
record by the Company do not constitute approximately the
percentage of the total outstanding shares of capital stock of each
Subsidiary set forth in the Prospectus; all of such shares held of
record by the Company have been
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duly authorized and validly issued are fully paid and
non-assessable; and except as otherwise set forth in the
Prospectus, nothing has come to our attention which causes us to
believe that the Company is not the beneficial owner of all of such
shares held of record by the Company, free and clear of all liens,
encumbrances, equities or claims. However, we call your attention
to the fact that 750,000 shares of common stock, $1.00 par value,
of USCC are registered in the name of Cede & Co. and held by Harris
Trust and Savings Bank, as custodian, in connection with the sale
by USCC of $745,000,000 aggregate principal amount of its Liquid
Yield Option-TM- Notes due 2015 (Zero Coupon - Subordinated); for the
purposes of this paragraph iv, in conformity with the Prospectus,
such shares are deemed to be held of record by the Company.
(v) The Preferred Securities Guarantee Agreement has been duly
authorized, executed and delivered by the Company and, assuming it is
duly authorized, executed, and delivered by the Guarantee Trustee, is
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution,
and delivery thereof by the Debt Trustee, is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(vii) The Declaration has been duly authorized, executed and
delivered by the Company and duly executed and delivered by the
Regular Trustees.
(viii) The Subordinated Debentures are in the form established
pursuant to the Indenture, have been duly authorized, executed and
delivered by the Company and, when duly authenticated by the
Indenture Trustee in the manner provided for in the Indenture and
delivered against payment therefor as provided in the Declaration,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(ix) The Company has authorized capital stock as set forth in
or incorporated by reference into the Prospectus; nothing has come to
our attention that causes us to believe that all of the issued and
outstanding shares of capital stock of the Company have not been duly
and validly authorized and issued and are not fully paid and
non-assessable or, except as set forth in the Prospectus, are subject
to any preemptive or other similar rights.
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(x) This Underwriting Agreement and the applicable Terms
Agreement have each been duly authorized, executed and delivered by
the Company.
(xi) The Registration Statement (including any Rule 462(b)
Registration Statement) has been declared effective under the 1933
Act. Any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by
Rule 424(b). To the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement (or such
Rule 462(b) Registration Statement) has been issued under the 1933
Act and no proceedings for that purpose have been initiated or are
pending or threatened by the Commission.
(xii) The Registration Statement (including any Rule 462(b)
Registration Statement), as of its effective date, and the
Prospectus, as of the date hereof, excluding the documents
incorporated by reference therein, and each amendment or supplement
to the Registration Statement (including any Rule 462(b) Registration
Statement) and Prospectus, excluding the documents incorporated by
reference therein (other than the financial statements, including
notes thereto, financial data and supporting schedules included or
incorporated by reference therein and the Trustee's Statement of
Eligibility on Form T-1 (the "Form T-1"), as to which no opinion need
be rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(xiii) Each document incorporated by reference into the
Prospectus (other than the financial statements, including notes
thereto, financial data and supporting schedules included or
incorporated by reference therein, as to which no opinion need be
rendered), when they were filed with the Commission, complied as to
form in all material respects with the applicable requirements of the
1934 Act and the 1934 Act Regulations.
(xiv) The information in the Prospectus under "United States
Federal Income Taxation," "Risk Factors," "Description of the
Preferred Securities," "Description of the Preferred Securities
Guarantee," "The Trusts," "Description of the Subordinated
Debentures," "Effect of Obligations under the Subordinated Debentures
and the Preferred Securities Guarantees," if any, or any caption
purporting to describe any such Offered Securities or the
Subordinated Debentures and the information contained in the
Registration Statement pursuant to Item 15, to the extent that such
information constitutes summaries of statutes, documents or legal
proceedings, the Company's Articles of Incorporation or By-laws or
the Declaration, has been reviewed by such counsel and constitutes a
fair summary thereof in all material respects.
(xv) The Common Securities, the Trust Preferred Securities, the
Subordinated Debentures, the Preferred Securities Guarantee, the
Declaration, the Indenture and
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the Preferred Securities Guarantee Agreement conform in all material
respects to the descriptions thereof contained in the Prospectus.
(xvi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are required to
be disclosed in the Registration Statement or the Prospectus other
than those disclosed therein or incorporated by reference therein.
(xvii) To such counsel's knowledge, (1) there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described in the Prospectus or the
Registration Statement or to be filed as exhibits thereto which are
not described or filed as required and (2) such descriptions
constitute fair summaries in all material respects of the matters
required to be described.
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, is
necessary or required for the due authorization, execution or
delivery by the Company of the Underwriting Agreement or the
applicable Terms Agreement or for the performance by the Company of
the transactions contemplated under by Prospectus, the Underwriting
Agreement, such Terms Agreement, the Indenture, the Declaration, the
Preferred Securities, the Common Securities, the Subordinated
Debentures, the Preferred Securities Guarantee Agreement, and the
Preferred Securities Guarantee, other than under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations, the
1939 Act and the 1939 Act Regulations, which have already been made,
obtained or rendered, as applicable, or state securities laws.
(xix) The execution and delivery of this Underwriting Agreement,
the applicable Terms Agreement, the Declaration, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Debentures and the Preferred Securities Guarantee Agreement, the
issuance and sale of the Preferred Securities and the Subordinated
Debentures, the compliance by the Company with all of the provisions
of this Underwriting Agreement, the applicable Terms Agreement, the
Declaration, the Subordinated Debentures, the Indenture and the
Preferred Securities Guarantee Agreement and the consummation of the
transactions contemplated herein, therein and in the Prospectus do
not and will not constitute a breach of, or default or Repayment
Event under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or,
to such counsel's knowledge, of any of the Company's Subsidiaries
pursuant to the terms of, (1) the Article of Incorporation or By-laws
of the Company; (2) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument, of which
such counsel has knowledge, to which the Company or any of the
Company's Subsidiaries is a party by which the Company or any of the
Company's Subsidiaries
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may be bound or to which any property or assets of the Company or
any of the Company's Subsidiaries is subject; or (3) to such
counsel's knowledge, any currently applicable law, rule,
regulation, judgment, order or administrative or court decree.
(xx) The Indenture, the Preferred Securities Guarantee Agreement
and the Declaration have each been duly qualified under the 1939
Act.
(xxi) Neither the Company nor the Trust is, nor upon the
issuance and sale of the Preferred Securities and the issuance of the
Subordinated Debentures and the Common Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus will be, an "investment company" or a
company controlled by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) To such counsel's knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that
are not described as required.
(xxiii) Such counsel has no knowledge that the Company or any of
the Subsidiaries is in violation of its charter or by-laws and such
counsel has no knowledge that the Company or any of its Subsidiaries
is in default in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
(xxiv) Each of the Offerors meets the registrant requirements
for use of Form S-3 under the 1933 Act Regulations.
(xxv) To the best of such counsel's knowledge and information,
all of the issued and outstanding Common Securities are directly
owned by the Company free and clear of any lien, encumbrance, equity
or claim.
Such opinion of Sidley & Austin shall additionally state that nothing has
come to their attention that has caused them to believe that the Registration
Statement (including any Rule 426(b) Registration Statement) or any post-
effective amendment thereto (except for financial statements, including notes
thereto, and supporting schedules and other financial data included therein or
omitted therefrom and for the Form T-1, as to which no belief need be
expressed), at the time the Registration Statement (including any Rule 462(b)
Registration Statement) or any post-effective amendment thereto (including the
filing of the Company's Annual Report on Form 10-K with the Commission) became
effective or at the date of the applicable Terms Agreement, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto (except for
financial statements, including notes thereto, and supporting
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schedules and other financial data included therein or omitted therefrom, as
to which no belief need be expressed), at the time the Prospectus was issued,
at the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits 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. Such counsel may also state that they have relied, to
the extent they may properly do so in the discharge of their professional
responsibilities as experienced securities law practitioners, upon the
judgment of officers and representatives of the Company with respect to facts
necessary to the determination of materiality.
Such opinion shall be limited to the laws of the State of New York, the
State of Illinois, the General Corporation Law of the State of Delaware and
the federal law of the United States (other than the Communications Act of
1934, as amended (the "Communications Act"), and the rules and regulations
thereunder). In rendering such opinion, such counsel may rely, as to matters
governed by the laws of the State of Iowa, upon the opinion of Nyemaster,
Goode, Voigts, West, Hansell & O'Brien delivered to the Underwriters pursuant
to subsection (b)(3) of this Section, and as to matters governed by the
Communications Act and the rules and regulations thereunder, upon the opinion
of Koteen and Naftalin delivered to the Underwriters pursuant to subsection
(b)(4) of this Section. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
At the Closing Time, Merrill shall also have received the opinion, dated
as of the Closing Time, of Sidley & Austin, counsel for the Offerors, in form
and substance reasonably satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters, regarding such Federal tax and other related matters of
the type ordinarily included in similar transactions or reasonably requested
by counsel for the Underwriters.
(2) The opinion, dated as of the Closing Time, of Richards, Layton &
Finger, special Delaware counsel to the Offerors, in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act and all
filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Trust as a business trust
have been made. Under the Business Trust Act and the Declaration,
the Trust has the trust power and authority to own property and to
conduct its business, all as described in the Prospectus, to execute
and deliver and perform its obligations under this Agreement, the
Trust Preferred Securities and the Common Securities and to purchase
and hold the Subordinated Debentures.
(ii) The Common Securities have been duly authorized by the
Declaration and are duly and validly issued undivided beneficial
interests in the assets of the
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Trust and, under the Delaware Act and the Declaration, the issuance
of the Common Securities is not subject to preemptive or other
similar rights.
(iii) Under the Delaware Act, the certificate attached to the
Declaration as Exhibit A-1 is an appropriate form of certificate to
evidence ownership of the Trust Preferred Securities. The Trust
Preferred Securities have been duly authorized by the Declaration and
are duly and validly issued, and, subject to the qualifications set
forth herein, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust. The holders of the Trust
Preferred Securities will be entitled to the same limitation of
personal liability extended to stockholders of private corporations
for profit organized under the General Corporation Law of the State
of Delaware; and, under the Delaware Act and the Declaration, the
issuance of the Trust Preferred Securities is not subject to
preemptive or other similar rights. Such counsel may note that the
Trust Preferred Securities holders may be obligated, pursuant to the
Declaration, to (a) provide indemnity and/or security in connection
with and pay taxes or governmental charges arising from transfers of
Trust Preferred Securities and the issuance of replacement Trust
Preferred Securities, and (b) provide security and indemnity in
connection with requests of or directions to the Property Trustee to
exercise its rights and powers under the Declaration.
(iv) Under the Declaration and the Delaware Act, this Agreement
and the applicable Terms Agreement have each been duly authorized by
all necessary trust action on the part of the Trust.
(v) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
Delaware court or Delaware governmental authority or agency is
necessary or required solely for the due authorization, execution or
delivery by the Trust of the Underwriting Agreement or the applicable
Terms Agreement or for the performance by the Trust of the
transactions contemplated under the Prospectus, the Underwriting
Agreement, such Terms Agreement, the Declaration, the Preferred
Securities and the Common Securities.
(vi) The issuance and sale by the Trust of the Trust Preferred
Securities and the Common Securities, the purchase by the Trust of
the Subordinated Debentures, the execution, delivery and performance
by the Trust of this Agreement, the applicable Terms Agreement, the
consummation by the Trust of the transactions contemplated hereby and
thereby and compliance by the Trust with its obligations hereunder
and thereunder do not violate (A) any of the provisions of the
Certificate of Trust or the Declaration or (B) any applicable
Delaware law or administrative regulation.
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(vii) The Declaration constitutes a valid and binding obligation
of the Company and the Trustees, and is enforceable against the
Company and the Trustees, in accordance with its terms.
(3) The opinion, dated as of Closing Time, of Nyemaster, Goode,
Voigts, West, Hansell & O'Brien, special Iowa counsel to the Company, in
form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Iowa.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under, or as contemplated under, this Underwriting
Agreement and the applicable Terms Agreement.
(iii) The Preferred Securities Guarantee Agreement has been duly
authorized by the Company.
(iv) The Indenture has been duly authorized by the Company.
(v) The Declaration has been duly authorized by the Company.
(vi) The Subordinated Debentures have been duly authorized by
the Company.
(vii) The Company has authorized capital stock as set forth in
the Registration Statement.
(viii) This Underwriting Agreement and the applicable Terms
Agreement have each been duly authorized by the Company.
(4) The opinion, dated as of the Closing Time, of Koteen and
Naftalin, special counsel to the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, to the effect that:
(i) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, the Federal
Communications Commission (the "FCC"), is necessary or required for
the due authorization, execution or delivery by the Company of this
Underwriting Agreement or the applicable Terms Agreement or for the
performance by the Company of the transactions contemplated under the
Prospectus, this Underwriting Agreement, such Terms Agreement or the
Indenture.
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(ii) The execution and delivery of this Underwriting Agreement,
the applicable Terms Agreement, the Indenture, the Declaration, the
Trust Preferred Securities, the Common Securities, the Subordinated
Debentures, the Preferred Securities Guarantee Agreement, and the
Preferred Securities Guarantee, the issuance of the Underwritten
Securities and the Subordinated Debentures, the compliance by the
Company with all of the provisions of the Underwritten Securities,
the Indenture, this Underwriting Agreement, the applicable Terms
Agreement, the Declaration, the Trust Preferred Securities, the
Common Securities, the Subordinated Debentures, the Preferred
Securities Guarantee Agreement, and the Preferred Securities
Guarantee, and the consummation of the transactions contemplated
herein, therein and in the Registration Statement and the Prospectus
(including the issuance and sale of the Underwritten Securities and
the issuance of the Subordinated Debentures as described under the
caption "Use of Proceeds") do not and will not, to such counsel's
knowledge, conflict with or result in any violation of, or the
creation of any lien, charge or encumbrance upon, the property or
assets of the Company or, to such counsel's knowledge, its
Subsidiaries, under the Communications Act or any rule, regulation,
judgment, order or administrative or court decree issued, enacted or
promulgated thereunder; neither will any such action conflict with or
have a material adverse effect on any of the certificates,
authorities, licenses or permits, if any, issued or to be issued by
the FCC to the Company or, to such counsel's knowledge, any of the
Company's Subsidiaries that enable them to carry on the business and
operations now operated by them and which are material to the
business of the Company and its consolidated subsidiaries considered
as one enterprise.
(iii) The information in the Registration Statement (or any
post-effective amendment thereto) or the Prospectus purporting to
describe FCC regulatory matters or the Communications Act, to the
extent that it constitutes matters of law, summaries of legal matters
or legal conclusions, has been reviewed by such counsel and is
correct in all material respects.
Such opinion of Koteen and Naftalin shall additionally state that
nothing has come to their attention that has caused them to believe that the
descriptions of FCC regulatory matters and the Communications Act contained
in the Registration Statement (including any Rule 426(b) Registration
Statement) or any post-effective amendment thereto (except for financial
statements, including notes thereto, and supporting schedules included
therein or omitted therefrom, as to which no belief need be expressed), at
the time the Registration Statement (including any Rule 462(b) Registration
Statement) or any post-effective amendment thereto (including the filing of
the Company's Annual Report on Form 10-K with the Commission) became
effective or at the date of the applicable Terms Agreement, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the descriptions of FCC regulatory matters and the
Communications Act contained in the Prospectus or any amendment or supplement
thereto (except for financial statements including notes thereto, and
supporting schedules included therein or omitted therefrom, as to which
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no belief need be expressed), at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Closing
Time, included or includes an untrue statement of a material fact or omitted
or omits 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.
(5) The favorable opinion, dated as of Closing Time, of the Law
Department of The First National Bank of Chicago or of Pepper, Hamilton &
Scheetz, counsel for the Property Trustee, the Delaware Trustee, the Debt
Trustee and the Guarantee Trustee, in form and substance satisfactory to
counsel for the Underwriters to the effect that:
(i) The First National Bank of Chicago is a national banking
association with trust powers, duly organized, validly existing and
in good standing under the laws of the United States with all
necessary power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of the Declaration
and the Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the Property
Trustee of the Declaration and the execution, delivery and
performance by the Guarantee Trustee of the Preferred Securities
Guarantee Agreement have been duly authorized by all necessary
corporate action on the part of the Property Trustee and the
Guarantee Trustee, respectively. The Declaration and the Preferred
Securities Guarantee Agreement have been duly executed and delivered
by the Property Trustee and the Guarantee Trustee, respectively, and
constitute the legal, valid and binding obligations of the Property
Trustee and the Guarantee Trustee, respectively, enforceable against
the Property Trustee and the Guarantee Trustee, respectively, in
accordance with their terms, except as enforcement thereof may be
limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration and the Preferred Securities Guarantee Agreement by the
Property Trustee and the Guarantee Trustee, respectively, do not
conflict with or constitute a breach of the Articles of Organization
or Bylaws of the Property Trustee and the Guarantee Trustee,
respectively.
(iv) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the
execution, delivery or performance by the Property Trustee and the
Guarantee Trustee of the Declaration and the Preferred Securities
Guarantee Agreement.
(v) The Statements of Eligibility on Forms T-1 with respect to
each of the Property Trustee, the Debt Trustee, and the Guarantee
Trustee filed with the Commission as part of the Registration
Statement complied as to form in all material respects with the
requirements of the 1939 Act and the 1939 Act Regulations.
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(vi) The Declaration constitutes a valid and binding obligation
of the Property Trustee and the Delaware Trustee and is enforceable
against the Property Trustee and the Delaware Trustee in accordance
with its terms, except to the extent that the enforcement thereof
may be limited by the Bankruptcy Exceptions.
(6) The opinion, dated as of Closing Time, of Mayer, Brown & Platt,
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, with respect to the
matters set forth in (i) (insofar as it relates to the existence and good
standing of the Company), (ii), (v) to (viii) (it being understood that
any opinion required with respect to the Trust Preferred Securities or the
Common Securities, as the case may be, not being subject to preemptive or
other similar rights of the securityholders shall be limited to such
rights arising by operation of law or under the Declaration), (x), (xi),
(xii), (xiv) (solely as to the information in the Prospectus under
"Description of the Preferred Securities" or any caption purporting to
describe any Offered Securities or the Subordinated Debentures), (xv) and
the penultimate paragraph of subsection (b)(1) of this Section. In giving
such opinion, such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York, the
State of Illinois, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to Merrill Lynch. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(c) At Closing Time there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its consolidated subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and Merrill Lynch shall have received a certificate of the
Chairman, President or Vice President-Finance of the Company and of the
Controller or Treasurer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change with respect
to the Company and its consolidated subsidiaries considered as one
enterprise, (ii) the representations and warranties in Section 1(a) are true
and correct with the same force and effect as though expressly made at and as
of Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior
to Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been received by the Company or, to the Company's
knowledge, issued and, to the Company's knowledge, no proceedings for that
purpose have been initiated or threatened by the Commission.
(d) At the time of the execution of the applicable Terms Agreement,
Merrill Lynch shall have received from Arthur Andersen LLP a letter dated such
date, in form and substance satisfactory to Merrill Lynch, together with signed
or reproduced copies of such letter for each of the other Underwriters,
containing statements and information of the type ordinarily included in
accountants'
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"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement and
the Prospectus.
(e) At Closing Time, Merrill Lynch shall have received from Arthur
Andersen LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(f) At Closing Time counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities, as contemplated herein, and related proceedings, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Offerors in connection with the issuance and
sale of the Underwritten Securities and the issuance of the Subordinated
Debentures shall be reasonably satisfactory in form and substance to Merrill
Lynch and counsel for the Underwriters.
(g) At Closing Time, the Underwritten Securities shall have the ratings
accorded by any "nationally recognized statistical rating organization", as
defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act
Regulations (a "NRSRO"), if and as specified in the applicable Terms
Agreement.
(h) At Closing Time, the Underwritten Securities shall have been
approved for listing, subject only to official notice of issuance, if and as
specified in the applicable Terms Agreement.
(i) If the Registration Statement or an offering of Underwritten
Securities is required to be and has been filed with the NASD for review, the
NASD shall not have raised any objection that remains unresolved at Closing
Time with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Underwriting Agreement and the
applicable Terms Agreement may be terminated by Merrill Lynch by notice to
the Company at any time at or prior to Closing Time and such termination
shall be without liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) The Offerors agree jointly and severally to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
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(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information deemed to be part of the Registration
Statement, if applicable, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the fees and disbursements of counsel
chosen by Merrill Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement does not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) and (B) as to any preliminary prospectus, any
preliminary prospectus supplement, the Prospectus or any amendment or
supplement thereto, this indemnity agreement shall not inure to the benefit of
any Underwriter on account of any loss, liability, claim, damage or expense
arising from the fact that such Underwriter sold Underwritten Securities to a
person to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus (excluding documents
incorporated by reference) as then amended or supplemented in any case where
such delivery is required by the 1933 Act if the Company has previously
furnished copies thereof to such Underwriter in the quantities requested and
the loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in such preliminary
prospectus, preliminary prospectus supplement, Prospectus (excluding documents
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incorporated by reference) or amendment or supplement thereto, which the
Company has sustained the burden of proving was corrected in the Prospectus
(excluding documents incorporated by reference) or in the Prospectus
(excluding documents incorporated by reference) as then amended or
supplemented.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Offerors, each of the Company's directors, the Trustees, each of the
Offerors' officers who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. 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 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 (including any impleaded
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. 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 6 for
any legal fees or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not, in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
counsel (plus any local counsel) representing the indemnified parties under
Section 6(a) who are parties to such action); (ii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party
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<PAGE>
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). No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) If at any time an indemnified party shall have requested in writing
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into after the
later of (A) 45 days after such indemnified party has mailed (by registered
or certified mail, postage prepaid) the aforesaid request to each of the
Notice Recipients (as defined below) and (B) if the indemnifying party has
not given written notice to such indemnified party of the receipt by such
indemnifying party of the aforesaid request, 30 days after such indemnified
party has mailed (by registered or certified mail, postage prepaid) a second
such request to each of the Notice Recipients, provided that such second
request is not mailed prior to the 46th day after the request referred to in
subclause (i)(A) above is mailed, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such request
prior to the date of such settlement. Notwithstanding the immediately
preceding sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, an indemnifying party shall not be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without
its consent if such indemnifying party (i) reimburses such indemnified party
in accordance with such request to the extent it considers such request to be
reasonable and (ii) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement. The Notice Recipients are the Chief Financial
Officer and the Secretary of the Company. Requests mailed pursuant to this
Section 6(d) to (i) the Chief Financial Officer of the Company shall be
mailed to him at Telephone and Data Systems, Inc., 30 North LaSalle Street,
Suite 4000, Chicago, Illinois 60602 and (ii) the Secretary of the Company
shall be mailed to Michael G. Hron, Sidley & Austin, One First National
Plaza, Suite 4200, Chicago, Illinois 60603.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
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<PAGE>
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Offerors,
on the one hand, and the Underwriters, on the other hand, in connection with
the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Offerors, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds
from the offering of such Underwritten Securities (before deducting expenses)
received by the Offerors and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to
the aggregate initial public offering price of such Underwritten Securities
as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Offerors or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Underwritten Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
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<PAGE>
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Offerors who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Offerors. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the aggregate principal amount of Underwritten
Securities set forth opposite their respective names in the applicable Terms
Agreement, and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement, or contained in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto or thereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Offerors, and
shall survive delivery of and payment for the Underwritten Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) This Underwriting Agreement (excluding the applicable Terms
Agreement) may be terminated for any reason at any time by the Company or by
Merrill Lynch upon the giving of 30 days' prior written notice of such
termination to the other.
(b) Merrill Lynch may terminate the applicable Terms Agreement, by
notice to the Company, at any time at or prior to the Closing Time, if (i)
there has been, since the time of execution of such Terms Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Trust or the Company
and its consolidated subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) there has occurred
any material adverse change in the financial markets in the United States or,
if the Underwritten Securities include Trust Preferred Securities denominated
or payable in, or indexed to, one or more foreign or composite currencies, in
the international financial markets, or any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as
to make it, in the reasonable judgment of Merrill Lynch, impracticable to
market the Underwritten Securities or to enforce contracts for the sale of
the Underwritten Securities, or (iii) trading in any securities of any of the
Trusts or of the Company has been suspended or materially limited by the
Commission or the American Stock Exchange, or if trading generally on the New
York Stock Exchange or the American Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required,
by either of said exchanges or by such system or by order of the Commission,
the NASD or any other governmental authority, or (iv) a banking moratorium
has been declared by either Federal, Illinois or New York authorities or, if
the Underwritten Securities include Trust
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<PAGE>
Preferred Securities denominated or payable in, or indexed to, one or more
foreign or composite currencies, by the relevant authorities in the related
foreign country or countries, or (v) there has occurred, since the time of
execution of such Terms Agreement, a downgrading in, or withdrawal of, the
rating assigned to the Underwritten Securities or any of the Company's or any
of the Trusts' other securities by a NRSRO, or any such NRSRO shall have
publicly announced that it has under surveillance or review with possible
negative implications its rating of the Underwritten Securities or any of the
Company's or any of the Trusts' other securities.
(c) If this Underwriting Agreement or the applicable Terms Agreement is
terminated pursuant to this Section 9, such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at the Closing Time to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then Merrill Lynch
and the Company shall each have the right, within 24 hours thereafter, to
make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters reasonably acceptable to Merrill Lynch, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, Merrill Lynch
shall not have completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations under such Terms Agreement bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds
10% of the aggregate principal amount of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, such Terms Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of the applicable Terms Agreement, either Merrill Lynch or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. Except as otherwise provided in Section 6(d), all
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed
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<PAGE>
or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at Merrill Lynch & Co., 5500
Sears Tower, Chicago, Illinois 60606, Attention: Steve Moss; notices to the
Company or the Trust shall be directed to it at; Telephone and Data Systems,
Inc., 30 North LaSalle Street, Suite 4000, Chicago, Illinois 60602,
Attention: President and Chief Executive Officer.
SECTION 12. PARTIES. This Underwriting Agreement and the applicable
Terms Agreement shall each inure to the benefit of and be binding upon
Merrill Lynch, the Offerors, and, upon execution of such Terms Agreement, any
other Underwriters and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement or such Terms Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Underwriting Agreement or such
Terms Agreement or any provision herein or therein contained. This
Underwriting Agreement and such Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND
ANY APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this Underwriting Agreement, along with all counterparts, will
become a binding agreement between Merrill Lynch and the Offerors in
accordance with its terms.
Very truly yours,
TELEPHONE AND DATA SYSTEMS, INC.
By:___________________________________
Title: Authorized Officer
TDS CAPITAL I
TDS CAPITAL II
TDS CAPITAL III
By: Telephone and Data Systems, Inc.
as Sponsor
By:___________________________________
Title: Authorized Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:__________________________________
Title: Authorized Officer
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<PAGE>
Exhibit A
TELEPHONE AND DATA SYSTEMS, INC.
(an Iowa corporation)
TDS CAPITAL I
TDS CAPITAL II
TDS CAPITAL III
(each, a Delaware business trust)
TRUST PREFERRED SECURITIES
TERMS AGREEMENT
To: Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, IL 60602
Ladies and Gentlemen:
We understand that TDS Capital __, a Delaware business trust (the
"Trust"), and Telephone and Data Systems, Inc., an Iowa corporation (the
"Company" and, together with the Trust, the "Offerors"), propose to issue and
sell [ ] of Preferred Securities (the "Offered Securities"). Subject
to the terms and conditions set forth or incorporated by reference herein, we
[the underwriters named below (the "Underwriters")] offer to purchase [,
severally and not jointly,] the number of Offered Securities [opposite their
names set forth below] at the purchase price set forth below.
Number
Underwriter Of Offered Securities
----------- ---------------------
---------------------
Total $
---------------------
---------------------
The Offered Securities shall have the following terms:
Title:
Ratings:
Liquidation Preference:
<PAGE>
Distribution rate or formula:
Distribution payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
Purchase price per security: ___% of principal amount, plus accrued Dividends,
if any, from _________________.
Form:
Other terms and conditions: [Include terms of the Company's Subordinated
Debentures to be issued to the Trust in exchange for the proceeds received by
the Trust in the offering of the Offered Securities.]
QIU Issues: [State whether the fees and expenses of any Underwriter acting in
the capacity of a "qualified independent underwriter" (as defined in Section
2(1) of Schedule E of the bylaws of the NASD), if applicable, are to be paid by
the Company]
Closing date and location:
All of the provisions contained in the document attached as Annex I hereto
entitled "TELEPHONE AND DATA SYSTEMS, INC.--Trust Preferred Securities--
Underwriting Agreement" are hereby incorporated by reference in their entirety
herein and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined
in such document are used herein as therein defined.
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<PAGE>
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on ______________ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------
Authorized Signatory
[Acting on behalf of itself and the other named Underwriters.]
Accepted:
TELEPHONE AND DATA SYSTEMS, INC.
By:
-------------------------------
Name:
Title:
TDS CAPITAL
------
By: Telephone and Data Systems, Inc.
By:
--------------------------------
Name:
Title:
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<PAGE>
SCHEDULE A
to Terms Agreement
Preferred Securities Commission
-------------------- ----------
Merrill Lynch, Pierce
Fenner & Smith Incorporated
[others]
--------------------- -------------------
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<PAGE>
-----------------------------------
AMENDED AND RESTATED DECLARATION OF TRUST
TDS CAPITAL I
Dated as of November 18, 1997
-------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS . . . . . . . . . . . . . . . 1
SECTION 1.1. DEFINITIONS . . . . . . . . . . . . . . . . . 1
ARTICLE II
TRUST INDENTURE ACT. . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION. . . . . . . 11
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES. . . . . . . . 11
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE . . . . . . . 12
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE. . . . . 12
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. . . . . . . . . . . . . . . . . . 12
SECTION 2.6. EVENTS OF DEFAULT; WAIVER . . . . . . . . . . 12
SECTION 2.7. EVENTS OF DEFAULT; NOTICE . . . . . . . . . . 14
ARTICLE III
ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.1. NAME. . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.2. OFFICE. . . . . . . . . . . . . . . . . . . . 15
SECTION 3.3. PURPOSE . . . . . . . . . . . . . . . . . . . 15
SECTION 3.4. AUTHORITY . . . . . . . . . . . . . . . . . . 15
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST. . . . . . . . 15
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES . . 15
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST
AND THE TRUSTEES. . . . . . . . . . . . . . 19
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE . . 19
SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES
OF THE PROPERTY TRUSTEE . . . . . . . . . . 21
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE. . . . . . 23
SECTION 3.11. DELAWARE TRUSTEE. . . . . . . . . . . . . . . 26
SECTION 3.12. EXECUTION OF DOCUMENTS. . . . . . . . . . . . 26
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF SECURITIES . . . . . . . . . . . . . . . 26
SECTION 3.14. DURATION OF TRUST . . . . . . . . . . . . . . 26
SECTION 3.15. MERGERS . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
SPONSOR. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES . . . 28
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR . . . . . . . 28
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ARTICLE V
TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.1. NUMBER OF TRUSTEES. . . . . . . . . . . . . . 29
SECTION 5.2. DELAWARE TRUSTEE. . . . . . . . . . . . . . . 29
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY . . . . . . . . 30
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY. . . . . . . . . 30
SECTION 5.5. INITIAL TRUSTEES. . . . . . . . . . . . . . . 31
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF
TRUSTEES. . . . . . . . . . . . . . . . . . 31
SECTION 5.7. VACANCIES AMONG TRUSTEES. . . . . . . . . . . 33
SECTION 5.8. EFFECT OF VACANCIES . . . . . . . . . . . . . 33
SECTION 5.9. MEETINGS. . . . . . . . . . . . . . . . . . . 33
SECTION 5.10. DELEGATION OF POWER . . . . . . . . . . . . . 34
ARTICLE VI
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.1. DISTRIBUTIONS. . . . . . . . . . . . . . . . . 34
ARTICLE VII
ISSUANCE OF SECURITIES . . . . . . . . . . . . . . . . . . . 34
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES. . . . 34
ARTICLE VIII
TERMINATION OF TRUST . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.1. TERMINATION OF TRUST . . . . . . . . . . . . . 35
ARTICLE IX
TRANSFER OF INTERESTS. . . . . . . . . . . . . . . . . . . . 36
SECTION 9.1. TRANSFER OF SECURITIES . . . . . . . . . . . . 36
SECTION 9.2. TRANSFER OF CERTIFICATES . . . . . . . . . . . 37
SECTION 9.3. DEEMED SECURITY HOLDERS. . . . . . . . . . . . 37
SECTION 9.4. BOOK ENTRY INTERESTS . . . . . . . . . . . . . 38
SECTION 9.5. NOTICES TO CLEARING AGENCY . . . . . . . . . . 39
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY . . . 39
SECTION 9.7. DEFINITIVE PREFERRED SECURITY CERTIFICATES . . 39
SECTION 9.8. MUTILATED, DESTROYED, LOST OR
STOLEN CERTIFICATES . . . . . . . . . . . . 40
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS . . . . . . . . . . . . . . . 41
SECTION 10.1. LIABILITY . . . . . . . . . . . . . . . . . . 41
SECTION 10.2. EXCULPATION . . . . . . . . . . . . . . . . . 41
SECTION 10.3. FIDUCIARY DUTY. . . . . . . . . . . . . . . . 42
-ii-
<PAGE>
SECTION 10.4. INDEMNIFICATION . . . . . . . . . . . . . . . 43
SECTION 10.5. OUTSIDE BUSINESSES. . . . . . . . . . . . . . 43
ARTICLE XI
ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.1. FISCAL YEAR . . . . . . . . . . . . . . . . . 44
SECTION 11.2. CERTAIN ACCOUNTING MATTERS. . . . . . . . . . 44
SECTION 11.3. BANKING . . . . . . . . . . . . . . . . . . . 45
SECTION 11.4. WITHHOLDING . . . . . . . . . . . . . . . . . 45
ARTICLE XII
AMENDMENTS AND MEETINGS. . . . . . . . . . . . . . . . . . . 45
SECTION 12.1. AMENDMENTS. . . . . . . . . . . . . . . . . . 45
SECTION 12.2. MEETINGS OF THE HOLDERS OF SECURITIES;
ACTION BY WRITTEN CONSENT . . . . . . . . . 47
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE . . 49
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF
PROPERTY TRUSTEE. . . . . . . . . . . . . . 49
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF
DELAWARE TRUSTEE. . . . . . . . . . . . . . 50
ARTICLE XIV
SUCCESSOR CORPORATION. . . . . . . . . . . . . . . . . . . . 50
SECTION 14.1. SPONSOR MAY CONSOLIDATE, ETC. . . . . . . . . 50
SECTION 14.2. SUCCESSOR PERSON SUBSTITUTED. . . . . . . . . 52
SECTION 14.3. EVIDENCE OF CONSOLIDATION, ETC. TO
PROPERTY TRUSTEE. . . . . . . . . . . . . . 52
ARTICLE XV
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 15.1. NOTICES . . . . . . . . . . . . . . . . . . . 53
SECTION 15.2. GOVERNING LAW . . . . . . . . . . . . . . . . 54
SECTION 15.3. INTENTION OF THE PARTIES. . . . . . . . . . . 54
SECTION 15.4. HEADINGS. . . . . . . . . . . . . . . . . . . 54
SECTION 15.5. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . 54
SECTION 15.6. PARTIAL ENFORCEABILITY. . . . . . . . . . . . 55
SECTION 15.7. COUNTERPARTS. . . . . . . . . . . . . . . . . 55
-iii-
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
-------------------- -----------
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(f) Inapplicable
315(a) 3.9(b)
315(b) 2.8
315(c) 3.9(a)
315(d) 3.9(a)
316(a) Exhibit A, 2.6
316(c) 3.6(e)
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any of
its terms or provisions.
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<PAGE>
EXHIBIT A
TERMS OF SECURITIES
EXHIBIT B
PREFERRED SECURITIES GUARANTEE
EXHIBIT C
UNDERWRITING AGREEMENT
-v-
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
TDS CAPITAL I
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of November 18, 1997, by the Trustees (as defined
herein), the Sponsor (as defined herein), and by the holders, from time to
time, of undivided beneficial interests in the Trust to be issued pursuant to
this Declaration;
W I T N E S S E T H:
WHEREAS, certain of the Trustees and the Sponsor have heretofore
established a trust (the "Trust") under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated October 15, 1997 (the
"Original Declaration") for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain Subordinated Debentures
of the Subordinated Debenture Issuer;
WHEREAS, the parties hereto, by this Declaration, amend and restate
each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS. Capitalized terms used in this
Declaration but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1. A term defined anywhere in
this Declaration has the same meaning throughout. A term defined in the
Trust Indenture Act has the same meaning when used in this Declaration unless
otherwise defined in this Declaration or unless the context otherwise
requires.
<PAGE>
AFFILIATE:
The term "Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.
AUTHORIZED OFFICER:
The term "Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
BOOK ENTRY INTEREST:
The term "Book Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as described in Section 9.4.
BUSINESS DAY:
The term "Business Day" means any day other than a day on which
banking institutions in Chicago, Illinois or New York, New York are
authorized or required by law to close.
BUSINESS TRUST ACT:
The term "Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801 ET SEQ., as it may be amended from time
to time.
CERTIFICATE:
The term "Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
CLEARING AGENCY:
The term "Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting
as depository for the Preferred Securities and in whose name, or in the name
of a nominee of that organization, shall be registered a Global Certificate
and which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
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<PAGE>
CLEARING AGENCY PARTICIPANT:
The term "Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom, from time to
time, the Clearing Agency effects book entry transfers and pledges of
securities deposited with the Clearing Agency.
CLOSING DATE:
The term "Closing Date" means November 18, 1997.
CODE:
The term "Code" means the Internal Revenue Code of 1986.
COMMON SECURITY:
The term "Common Security" has the meaning specified in Section 7.1.
COMMON SECURITY CERTIFICATE:
The term "Common Security Certificate" means a definitive
certificate in fully registered form representing a Common Security
substantially in the form of Annex II to Exhibit A.
COVERED PERSON:
The term "Covered Person" means:
(a) any officer, director, shareholder, partner, member,
representative, employee or agent of:
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
DEBENTURE ISSUER:
The term "Debenture Issuer" means TDS, in its capacity as the issuer
of the Subordinated Debentures.
DEBENTURE TRUSTEE:
The term "Debenture Trustee" means The First National Bank of
Chicago, as trustee under the Indenture, until a successor
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<PAGE>
is appointed thereunder and thereafter means such successor trustee.
DELAWARE TRUSTEE:
The term "Delaware Trustee" has the meaning set forth in Section 5.2.
DEFINITIVE PREFERRED SECURITY CERTIFICATES:
The term "Definitive Preferred Security Certificates" has the meaning
set forth in Section 9.4.
DIRECTION:
The term "Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one
or more Authorized Officers of that Person.
DISTRIBUTION:
The term "Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
DTC:
The term "DTC" means The Depository Trust Company, the initial
Clearing Agency.
EVENT OF DEFAULT:
The term "Event of Default" in respect of the Securities means an
Indenture Default has occurred and is continuing in respect of the Subordinated
Debentures.
EXCHANGE ACT:
The term "Exchange Act" means the Securities Exchange Act of 1934.
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<PAGE>
GLOBAL CERTIFICATE:
The term "Global Certificate" has the meaning set forth in Section
9.4.
HOLDER:
The term "Holder" means the Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act; provided, however, that in
determining whether Holders of the requisite liquidation amount of Preferred
Securities have voted on any matter provided for in this Declaration, then
for the purpose of such determination only (and not for any other purpose
hereunder), if the Preferred Securities remain in the form of one or more
Global Certificates, the term "Holder" shall mean the holder of the Global
Certificate acting at the direction of the Preferred Security Beneficial
Owners.
INDEMNIFIED PERSON:
The term "Indemnified Person" means any Trustee, any Affiliate of
any Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee, or any employee or agent
of the Trust or its Affiliates.
INDENTURE:
The term "Indenture" means the Indenture dated as of October 15,
1997 between the Debenture Issuer and the Debenture Trustee, and any
amendment thereto and any indenture supplemental thereto pursuant to which
the Subordinated Debentures are to be issued.
INDENTURE DEFAULT:
The term "Indenture Default" means an "Event of Default" as such
term is defined in the Indenture.
INVESTMENT COMPANY:
The term "Investment Company" means an investment company as
defined in the Investment Company Act.
INVESTMENT COMPANY ACT:
The term "Investment Company Act" means the Investment Company Act of
1940.
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<PAGE>
LEGAL ACTION:
The term "Legal Action" has the meaning set forth in Section 3.6(g).
MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holder(s) of outstanding
Preferred Securities or outstanding Common Securities voting separately as a
class, representing more than 50% of the aggregate stated liquidation amount
(in cluding the stated amount that would be paid on redemption, liquidation
or maturity, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of such
class.
OFFICER'S CERTIFICATE:
The term "Officer's Certificate" means, with respect to any Person,
a certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each such officer signing the
Certificate has read the covenant or condition and the definition(s)
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each such officer in
rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
6
<PAGE>
PAYING AGENT:
The term "Paying Agent" has the meaning specified in Section 3.8(h).
PERSON:
The term "Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint stock company, unincorporated
association or government or any agency or political subdivision thereof, or
any other entity of whatever nature.
PREFERRED SECURITIES GUARANTEE:
The term "Preferred Securities Guarantee" means the Preferred
Securities Guarantee Agreement to be dated as of November 18, 1997 of the
Sponsor in respect of the Preferred Securities in the form of Exhibit B.
PREFERRED SECURITY:
The term "Preferred Security" has the meaning specified in Section
7.1.
PREFERRED SECURITY BENEFICIAL OWNER:
The term "Preferred Security Beneficial Owner" means, with respect
to a Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly
as a Clearing Agency Participant or as an indirect participant, in each case
in accordance with the rules of such Clearing Agency).
PREFERRED SECURITY CERTIFICATE:
The term "Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Annex I to
Exhibit A.
PROPERTY TRUSTEE:
The term "Property Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
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<PAGE>
PROPERTY TRUSTEE ACCOUNT:
The term "Property Trustee Account" has the meaning set forth in
Section 3.8(c)(i).
QUORUM:
The term "Quorum" means a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
REGULAR TRUSTEE:
The term "Regular Trustee" means any Trustee other than the
Property Trustee and the Delaware Trustee.
RELATED PARTY:
The term "Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any other Person
which owns, directly or indirectly, 100% of the outstanding voting securities
of the Sponsor.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the
Property Trustee, means the chairman of the board of directors, the
President, any Vice President, the Secretary, the Treasurer, any trust
officer or any corporate trust officer or any other officer or assistant
officer of the Property Trustee customarily performing functions similar to
those performed by any of the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
RULE 3A-5:
The term "Rule 3a-5" means Rule 3a-5 under the Investment Company
Act.
SECURITIES:
The term "Securities" mean the Common Securities and the Preferred
Securities.
SECURITIES ACT:
The term "Securities Act" means the Securities Act of 1933, as
amended.
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<PAGE>
66-2/3% IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "66-2/3% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holder(s) of outstanding
Preferred Securities or outstanding Common Securities, voting separately as a
class, representing 66-2/3% of the aggregate stated liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
maturity, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of such
class.
SPONSOR:
The term "Sponsor" means TDS, in its capacity as sponsor of the
Trust, and its successor or successors by merger, consolidation or purchase
of all or substantially all of its assets.
SUBORDINATED DEBENTURES:
The term "Subordinated Debentures" means the series of Subordinated
Debentures to be issued by the Debenture Issuer under the Indenture to the
Property Trustee for the benefit of the Trust and the Holders.
SUCCESSOR PROPERTY TRUSTEE:
The term "Successor Property Trustee" means a successor Trustee
possessing the qualifications to act as Property Trustee under Section 5.3(a).
10% IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "10% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holder(s) of outstanding
Preferred Securities or outstanding Common Securities, voting separately as a
class, representing 10% of the aggregate stated liquidation amount (including
the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of such class.
9
<PAGE>
TDS:
The term "TDS" means Telephone and Data Systems, Inc., an Iowa
corporation, or any successor entity in a merger or consolidation.
TAX EVENT:
The term "Tax Event" means a "Tax Event" as defined in the Indenture.
TREASURY REGULATIONS:
The term "Treasury Regulations" means the income tax regulations
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury Department, as amended.
TRUSTEE OR TRUSTEES:
The terms "Trustee" or "Trustees" means each Person who has signed
this Declaration as a trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may
from time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee or
the Trustees shall refer to such Person or Persons solely in their capacity
as trustees hereunder.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of 1939.
UNDERWRITING AGREEMENT:
The term "Underwriting Agreement" means the Underwriting Agreement
for the offering and sale of Preferred Securities in the form of Exhibit C.
SECTION 1.2. INTERPRETATION. Each definition in this Declaration
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor
legislation. The word "or" is not exclusive, and the words
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<PAGE>
"herein," "hereof" and "hereunder" refer to this Declaration as a whole. The
headings to the Articles and Sections are for convenience of reference and
shall not affect the meaning or interpretation of this Declaration.
References to Articles, Sections, Annexes and Schedules mean the Articles,
Sections, Annexes and Schedules of this Declaration. The Annexes, if any,
and Schedules are hereby incorporated by reference into and shall be deemed a
part of this Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration and shall, to the extent applicable,
be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act. If and to the extent
that any provision of this Declaration limits, qualifies or conflicts with
the duties imposed by sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
(c) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES. (a) Each of the
Sponsor and the Regular Trustee(s) on behalf of the Trust shall provide the
Property Trustee (i) within fourteen (14) days after each record date for
payment of Distributions a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, PROVIDED that none of
the Sponsor or the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any
other time, within thirty (30) days of receipt by the Trust of a written
request for a List of Holders as of a date no more than fourteen (14) days
before such List of Holders is given to the Property Trustee. The Property
Trustee shall preserve, in as current a form as is reasonably practicable,
all information contained in Lists of Holders given to it or which it
receives in its capacity as Paying Agent (if acting in such
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<PAGE>
capacity) PROVIDED that the Property Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PROPERTY TRUSTEE. Within 60 days
after May 15 of each year, the Property Trustee shall provide to the Holders
of the Preferred Securities such reports, if any, as are required by Section
313 of the Trust Indenture Act, in the form and in the manner and to the
Person or Persons provided by section 313 of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PROPERTY TRUSTEE. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such documents, reports and information as required by
section 314 (if any) and the compliance certificate as required by section
314 of the Trust Indenture Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with the
conditions precedent, if any, provided for in this Declaration which relate
to any of the matters set forth in section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
section 314(c)(1) may be given in the form of an Officer's Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER. (a) The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past
Event of Default in respect of the Preferred Securities and its consequences,
PROVIDED that if the Event of Default:
(i) is not waivable under the Indenture, the Event of Default under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Subordinated Debentures (a "Super-
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Preferred Securities that the
relevant Super Majority represents to the
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aggregate principal amount of the Subordinated Debentures outstanding.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured, for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon. Any waiver by the Holders of the
Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default in respect of the Common
Securities and its consequences, PROVIDED that if the Event of Default:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under this Declaration as provided below, the Event of Default under this
Declaration is not waivable; or
(ii) requires the consent or vote of all of the holders of the
Subordinated Debentures to be waived, the Event of Default under this
Declaration may only be waived by the vote of all of the Holders of the
Preferred Securities, PROVIDED that each Holder of Common Securities will
be deemed to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its consequences until
all Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated and until such Events of Default
have been so cured, waived or otherwise eliminated, the Property Trustee
will be deemed to be acting solely on behalf of the Holders of the
Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms
of the Securities. Subject to the foregoing proviso, upon such waiver,
any such default shall cease to exist, and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have
been cured, for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or
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Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE. (a) The Property Trustee
shall, within 90 days after the occurrence of an Event of Default known to
the Property Trustee, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities known to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults", for the purposes
of this Section 2.7(a), is hereby defined as an Event of Default as defined
in the Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); PROVIDED that,
except for a default in the payment of the principal of (or the premium, if
any) or the interest on any of the Subordinated Debentures or in the payment
of any sinking fund in stallment established for the Subordinated Debentures,
the Property Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers, of the Property Trustee in good
faith determine that the withholding of such notice is in the interests of
the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
(i) a default arising under Sections 6.01(a)(1) and 6.01(a)(2) of
the Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of this Declaration shall have
obtained written notice.
ARTICLE III
ORGANIZATION
SECTION 3.1. NAME. The Trust is named "TDS Capital I", as such
name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities.
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The Trust's activities may be conducted under the name of the Trust or any
other name deemed advisable by the Regular Trustees.
SECTION 3.2. OFFICE. The address of the principal office of the
Trust is 30 North LaSalle Street, Chicago Illinois 60602. On ten Business
Days written notice to the Holders of Securities, the Regular Trustees may
designate another principal office.
SECTION 3.3. PURPOSE. The exclusive purposes and functions of the
Trust are (a) to issue and sell Securities and use the proceeds from such
sale to acquire the Subordinated Debentures and (b) except as otherwise
limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the
Trust not to be classified for United States federal income tax purposes as a
grantor trust.
SECTION 3.4. AUTHORITY. Subject to the limitations provided in
this Declaration and to the specific duties of the Property Trustee, the
Regular Trustees shall have exclusive and complete authority to carry out the
purposes of the Trust. An action taken by the Regular Trustees in accordance
with their powers shall constitute the act of and serve to bind the Trust,
and an action taken by the Property Trustee in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with a
Trustee or the Trustees acting on behalf of the Trust, no Person shall be
required to inquire into the authority of such Trustee or Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively
on the power and authority of a Trustee or the Trustees as set forth in this
Declaration.
SECTION 3.5. TITLE TO PROPERTY OF THE TRUST. Except as provided
in Section 3.8 with respect to the Subordinated Debentures and the Property
Trustee Account or as otherwise provided in this Declaration, legal title to
all assets of the Trust shall be vested in the Trust. The Holders shall not
have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
SECTION 3.6. POWERS AND DUTIES OF THE REGULAR TRUSTEES. The
Regular Trustees shall have the exclusive power and authority and duty to
cause the Trust to engage in the following activities:
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(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that
the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, and, PROVIDED FURTHER, there
shall be no interests in the Trust other than the Securities and the
issuance of Securities shall be limited to a one-time, simultaneous
issuance of both Preferred Securities and Common Securities on the Closing
Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Securities and Exchange
Commission (the "Commission") the registration statement on Form S-3
prepared by the Sponsor in relation to the Preferred Securities,
including any amendments thereto prepared by the Sponsor;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor as necessary
in order to qualify or register all or part of the Preferred
Securities in any state in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application prepared by the
Sponsor to the American Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities; and
(iv) execute and file with the Commission a registration
statement on Form 8-A prepared by the Sponsor relating to the
registration of the class of Preferred Securities under Section 12(b)
of the Exchange Act, including any amendments thereto prepared by the
Sponsor;
(c) to acquire the Subordinated Debentures with the proceeds of
the sale of the Preferred Securities and the Common Securities;
PROVIDED, HOWEVER, that the Regular Trustees shall cause legal title to
the Subordinated Debentures to be held of record in the name of the
Property Trustee for the benefit of the Trust and the Holders of the
Preferred Securities and the Holders of the Common Securities;
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(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event, PROVIDED that the Regular
Trustees shall consult with the Sponsor and the Property Trustee before
taking any Ministerial Action in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including
for the purposes of section 316(c) of the Trust Indenture Act and with
respect to Distributions, voting rights, redemptions and exchanges, and to
issue relevant notices to the Holders of Preferred Securities and the
Holders of Common Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless, pursuant to Section 3.8(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by
section 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, transfer agent
for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election (i) to
defer payments of interest on the Subordinated Debentures by extending the
interest payment
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period under the Indenture or (ii) to shorten the scheduled maturity date
on the Subordinated Debentures;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be characterized for United
States federal income tax purposes as a grantor trust and causing
each Holder of Securities to be treated as owning an undivided
beneficial interest in the Subordinated Debentures; and
(iii) co-operating with the Debenture Issuer to ensure that
the Subordinated Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax purposes,
PROVIDED that such action does not materially and adversely affect the
interests of the Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section 3.6 in
a manner which is consistent with the purposes and functions of the Trust set
out in Section 3.3 and the Regular
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Trustees shall not take any action which is inconsistent with the purposes
and functions of the Trust set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
SECTION 3.7. PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
The Trust shall not, and the Trustees (including the Property Trustee) shall
cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not, and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Subordinated Debentures but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Subordinated Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) consent to the modification of the Subordinated Debentures or
any other asset of the Trust, unless the Trust shall have received an
opinion of counsel to the effect that such modification will not cause
more than an insubstantial risk that for United States federal income tax
purposes the Trust will not be characterized as a grantor trust.
SECTION 3.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE. (a) The
legal title to the Subordinated Debentures shall be owned by and held of record
in the name of the Property Trustee in trust for the benefit of the Trust and
the Holders of the Securities. The right, title and interest of the Property
Trustee to the
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Subordinated Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee as set forth in Section 5.6. Such
vesting and cessation of title shall be effective whether or not
conveyancing documents with respect to the Subordinated Debentures have been
executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Debentures to the Regular Trustees or to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in
respect of the Subordinated Debentures held by the Property Trustee,
deposit such funds into the Property Trustee Account and make payments
to the Holders of the Preferred Securities and the Holders of the Common
Securities from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration. The Property
Trustee Account shall be an account which is maintained with a banking
institution the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Preferred Securities and the
Common Securities to the extent the Subordinated Debentures are redeemed
or mature; and
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Subordinated Debentures to
Holders of Securities upon the liquidation and dissolution of the Trust.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
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(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration (including the Preferred
Securities Guarantee) or the Trust Indenture Act.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Subordinated Debentures
under the Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of the Holders of the Securities,
enforce its rights under the Indenture with respect to the Subordinated
Debentures and its rights under the Preferred Securities Guarantee in
accordance with the terms of the Preferred Securities Guarantee, subject to the
rights of the Holders pursuant to the terms of such Securities and the
Preferred Securities Guarantee.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and
the Common Securities and any such Paying Agent shall comply with section
317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee at any time and a successor Paying Agent or additional Paying
Agents may be appointed at any time by the Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the powers or the authority of the Regular Trustees set forth in
Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes and functions of
the Trust set forth in Section 3.3 and the Property Trustee shall not take any
action which is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
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SECTION 3.9. CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE. (a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and in the terms of the Securities, and no implied covenants
shall be read into this Declaration against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and in the terms of the Securities, and the Property
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the
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Property Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or adequate indemnity
against such risk is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Subordinated Debentures and
the Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its
own account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Subordinated Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration,
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nor shall the Property Trustee be liable for the default or misconduct of
the Regular Trustees or the Sponsor.
SECTION 3.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE. (a) Subject to
the provisions of Section 3.9:
(i) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, approval, bond, security or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties.
(ii) Any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officer's Certificate.
(iii) Whenever in the administration of this Declaration the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part and, if the Trust is excluded from
the definition of an Investment Company solely by means of Rule 3a-5,
subject to the requirements of Rule 3a-5, request and rely upon an
Officer's Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees.
(iv) The Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (or any rerecording, refiling or
reregistration thereof).
(v) The Property Trustee may consult with counsel and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to
the Sponsor or any of its Affiliates and may include any of its employees.
The Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction.
(vi) The Property Trustee shall be under no obligation to exercise
any rights or powers vested in it under this
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Declaration at the request or direction of any Holder, unless such Holder
shall have provided to the Property Trustee reasonable security or
indemnity against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee, PROVIDED that nothing contained in this
Section 3.10(a)(vi) shall, however, relieve the Property Trustee, upon the
occurrence of an Event of Default, from exercising the rights and powers
vested in it by this Declaration.
(vii) The Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, security or other papers or
documents, but the Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit.
(viii) The Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys, and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both
of which shall be conclusively evidenced by the Property Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities representing the aggregate liquidation amount of all
outstanding Securities of such class required under the terms of the
Securities to direct the Property Trustee to enforce such remedy or right
or take such action, (ii) may refrain from enforcing such remedy or right
or taking such other
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action until such instructions are received and (iii) shall be protected in
acting in accordance with such instructions.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11. DELAWARE TRUSTEE. Notwithstanding any other provision
of this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Trustees described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
SECTION 3.12. EXECUTION OF DOCUMENTS. A majority of, or if there
are only two, both of the Regular Trustees are authorized to execute on behalf
of the Trust any documents which the Regular Trustees have the power and
authority to execute pursuant to Section 3.6, PROVIDED that any listing
application prepared by the Sponsor referred to in Section 3.6(b)(iii) may be
executed by any Regular Trustee.
SECTION 3.13. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. DURATION OF TRUST. The Trust, unless dissolved
pursuant to the provisions of Article VIII hereof, shall have existence for
fifty (50) years from the Closing Date.
SECTION 3.15. MERGERS. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any Person, except as
described in
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Section 3.15(b) and (c) of this Declaration or Section 3 of Annex I hereto.
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Property Trustee, the Delaware Trustee or the Holders of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by a
trust organized as such under the laws of any State; PROVIDED that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
with respect to the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities and Common
Securities, respectively (the "Successor Securities"), so long as the
Successor Securities rank the same as the Preferred Securities and
Common Securities rank with respect to Distributions and payments
upon liquidation, redemption, maturity and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity which possesses the same powers and duties as the
Property Trustee as the Holder of the Subordinated Debentures;
(iii) the Preferred Securities or any Successor Securities thereof are
listed, or any such Successor Securities will be listed upon notification
of issuance, on (A) any national securities exchange or (B) on such other
organization on which the Preferred Securities are then listed;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities
thereof) to be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders' interest
in the new entity);
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(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion from independent counsel
to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replace-
ment does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities of the Preferred Securities at least
to the extent provided by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity for United States federal income tax
purposes to be classified as other than a grantor trust and each Holder of the
Securities not to be treated as owning an undivided beneficial interest in the
Subordinated Debentures, except with the consent of Holders of 100% in
liquidation amount of the Securities.
ARTICLE IV
SPONSOR
SECTION 4.1. SPONSOR'S PURCHASE OF COMMON SECURITIES. On the
Closing Date, the Sponsor will purchase all of the Common Securities issued by
the Trust, in an amount equal to approximately 3% of the capital of the Trust
at the same time as the Preferred Securities are sold.
SECTION 4.2. RESPONSIBILITIES OF THE SPONSOR. In connection with
the issue and sale of the Preferred Securities, the
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Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to take any and all such acts, other than actions which must be taken by
the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such states;
(c) to prepare for filing by the Trust an application to the
American Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of, and execute and deliver, the
Underwriting Agreement providing for the sale of the Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1. NUMBER OF TRUSTEES. The number of Trustees shall
initially be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities;
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PROVIDED that in any case, the number of Trustees shall be at least four (4)
unless the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee pursuant to Section 5.2, in which case the number of Trustees shall be
at least three (3).
SECTION 5.2. DELAWARE TRUSTEE. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware and otherwise meets the requirements
of applicable law,
PROVIDED that if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3. PROPERTY TRUSTEE; ELIGIBILITY. (a) There shall at all
times be one Trustee which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any state or territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000), and subject to supervision or examination by federal,
state, territorial or District of Columbia authority (if such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published).
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.3(a), the Property Trustee shall immediately resign
in the manner and with the effect set out in Section 5.6(c).
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(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if they were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 5.4. QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY. Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least twenty-one (21) years of age or a legal entity which shall act through
one or more Authorized Officers.
SECTION 5.5. INITIAL TRUSTEES. The three initial Regular Trustees
shall be:
LeRoy T. Carlson, Jr.
Murray L. Swanson
Greg Wilkinson
c/o Telephone and Data Systems, Inc.
30 S. LaSalle St.
Chicago, Illinois 60602
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60603
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
SECTION 5.6. APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES. (a)
Subject to Section 5.6(b), Trustees may be appointed or removed without cause
at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common
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Securities, voting as a class at a meeting of the Holders of the Common
Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until the
successor of such Trustee shall have been appointed or until the death, removal
or resignation of such Trustee. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
PROVIDED, HOWEVER, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust and the
Sponsor; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust and the
Sponsor.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee as the case may be if the Property
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Trustee or the Delaware Trustee delivers an instrument of resignation in
accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
SECTION 5.7. VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy
by a majority of the Regular Trustees shall be conclusive evidence of the
existence of such vacancy. The vacancy shall be filled with a Trustee
appointed in accordance with Section 5.6.
SECTION 5.8. EFFECT OF VACANCIES. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the
number of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
SECTION 5.9. MEETINGS. Meetings of the Regular Trustees shall be
held from time to time upon the call of any Regular Trustee. Regular meetings
of the Regular Trustees may be held at a time and place fixed by resolution of
the Regular Trustees. Notice of any in-person meetings of the Regular Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence
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(whether in person or by telephone) of a Regular Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Regular Trustee
attends a meeting for the express purpose of objecting to the transaction of
any activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, PROVIDED that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
In the event there is only one Regular Trustee, any action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.10. DELEGATION OF POWER. (a) Any Regular Trustee may, by
power of attorney consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission or making any other governmental
filing.
(b) The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and principal on
the Subordinated Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
Distribution of the Payment Amount to the Holders.
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ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. GENERAL PROVISIONS REGARDING SECURITIES. (a) The
Regular Trustees shall, on behalf of the Trust, issue one class of preferred
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit A and incorporated herein
by reference (the "Preferred Securities"), and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Exhibit A and incorporated herein by reference
(the "Common Securities"). The Trust shall have no securities or other
interests in the assets of the Trust other than the Preferred Securities and
the Common Securities.
(b) The Securities shall be signed on behalf of the Trust by the
Regular Trustees (or, if there are more than two Regular Trustees, by any two
of the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Security. In case any Regular Trustee of
the Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Security so signed shall be delivered by the Trust,
such Security nevertheless may be delivered as though the person who signed
such Security had not ceased to be such Regular Trustee; and any Security may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Security, are the Regular Trustees of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, subject to Section 10.1(b) with respect to the Common
Securities.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
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ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. TERMINATION OF TRUST. (a) The Trust shall dissolve
upon the earliest to occur of the following events:
(i) November 18, 2047;
(ii) upon the bankruptcy of the Holder of the Common Securities or
the Sponsor;
(iii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Holder of the Common Securities or the
Sponsor, the filing of a certificate of cancellation with respect to the
Trust or the revocation of the charter of the Holder of the Common
Securities or of the Sponsor and the expiration of ninety (90) days after
the date of revocation without a reinstatement thereof;
(iv) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(v) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(vi) upon the dissolution of the Trust in accordance with the terms
of the Securities and pursuant to which all of the Subordinated Debentures
shall have been distributed to the Holders of Securities in exchange for
all of the Securities; or
(vii) upon delivery of written direction to the Property Trustee by
the Sponsor at any time (which direction is wholly optional and within the
discretion of the Sponsor) to dissolve the Trust and distribute the
Subordinated Debentures to the Holders of the Securities in accordance
with Section 3 of EXHIBIT A hereto.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), after the completion of the winding up of the
affairs of the Trust, the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
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(c) The provisions of Article X shall survive the termination of the
Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. TRANSFER OF SECURITIES. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the Securities. Any
transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor, PROVIDED that any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust and each Holder of Securities would
not be treated as owning an undivided beneficial interest in the
Subordinated Debentures; and
(ii) the Trust would be an Investment Company or the transferee would
be an Investment Company if the transferee was not an Investment Company
before the transfer.
SECTION 9.2. TRANSFER OF CERTIFICATES. The Regular Trustees shall
provide for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon payment
(with such indemnity as the Regular Trustees may require) in respect of any
tax or other government charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer shall be canceled by the
Regular Trustees.
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A transferee of a Certificate shall be entitled to the rights and subject to
the obligations of a Holder hereunder upon the receipt by such transferee of
a Certificate. By acceptance of a Certificate, each transferee shall be
deemed to have agreed to be bound by this Declaration and the documents
incorporated by reference herein.
SECTION 9.3. DEEMED SECURITY HOLDERS. The Trustees may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part
of any Person, whether or not the Trustees shall have actual or other notice
thereof.
SECTION 9.4. BOOK ENTRY INTERESTS. Unless otherwise specified in
the terms of the Preferred Securities, the Preferred Securities Certificates,
on original issuance, will be issued in the form of one or more, fully
registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered
on the books and records of the Trust in the name of Cede & Co., the nominee
of DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided
in Section 9.7. Unless and until definitive, fully registered Preferred
Security Certificates (the "Definitive Preferred Security Certificates") have
been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving approv-
als, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
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(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions on
the Global Certificates to such Clearing Agency Participants, PROVIDED,
that solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided
for in this Declaration, so long as Definitive Preferred Securities
Certificates have not been issued, the Trustees may conclusively rely on,
and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Preferred Securities Beneficial Owners' votes or assigning the right to
vote on any matter to any other Persons either in whole or in part.
SECTION 9.5. NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Preferred Security Holders is required under this
Decla ration, unless and until Definitive Preferred Security Certificates
shall have been issued to the Preferred Security Beneficial Owners pursuant
to Section 9.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Preferred Security Holders
to the Clearing Agency, and shall have no notice obligations to the Preferred
Security Benefi cial Owners.
SECTION 9.6. APPOINTMENT OF SUCCESSOR CLEARING AGENCY. If any
Clearing Agency elects to discontinue its services as securities depositary
with respect to the Preferred Securities, the Regular Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such
Preferred Securities.
SECTION 9.7. DEFINITIVE PREFERRED SECURITY CERTIFICATES. If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within ninety (90) days after
such discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect, after consultation with the Sponsor,
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities,
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then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be
liable for any delay in delivery of such instructions and each of them may
conclusively rely on, and shall be protected in relying on, such
instructions. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Preferred Securities
may be listed, or to conform to usage.
SECTION 9.8. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any two Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated, de-
stroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the Regular Trustees may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership
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interest in the relevant Securities, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. LIABILITY. (a) Except as expressly set forth in this
Declaration, the Subordinated Debentures, the Preferred Securities Guarantee
and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust's assets.
SECTION 10.2. EXCULPATION. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or
any Covered Person for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
on behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason
of such Indemnified Person's gross negligence (or, in the case of the
Property Trustee, subject to Section 3.9) or willful misconduct with respect
to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Trust, including information, opinions, reports
or statements as to the value and amount of the assets, liabilities,
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profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.
SECTION 10.3. FIDUCIARY DUTY. (a) To the extent that, at law or
in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest
of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or terms so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to
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give any consideration to any interest of, or factors affecting, the
Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. INDEMNIFICATION. (a) To the fullest extent
permitted by applicable law, the Sponsor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage, liability, tax,
penalty, expense or claim incurred by such Indemnified Person by reason of
the creation, operation or termination of the Trust or any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, subject to Section 3.9) or willful misconduct with respect
to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by
or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a). The rights to indemnification set forth
herein shall survive the termination of this Declaration.
SECTION 10.5. OUTSIDE BUSINESSES. Any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee (subject to Section
5.3(c)) may engage in or possess an interest in other business ventures of
any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if
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presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction
with the Sponsor or any Affiliate of the Sponsor, or may act as depository
for, trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. FISCAL YEAR. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the
Code.
SECTION 11.2. CERTAIN ACCOUNTING MATTERS. (a) At all times
during the existence of the Trust, the Regular Trustees shall keep, or cause
to be kept, full books of account, records and supporting documents, which
shall reflect in reasonable detail, each transaction of the Trust. The books
of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles consistently
applied. The Trust shall use the accrual method of accounting for United
States federal income tax purposes. The books of account and the records of
the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants
selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered
to each of the Holders of Securities, within 90 days after the end of each
Fiscal Year of the Trust, annual financial statements of the Trust, including
a balance sheet of the Trust as of the end of such Fiscal Year, and the
related statements of income or loss.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, an annual United States
federal income tax information statement, if one is required by the Code,
containing such information with regard to the Securities held by each Holder
as is re quired by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later date, the
Regular Trustees
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shall endeavor to deliver all such statements within thirty (30) days after
the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to
be filed by the Regular Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.3. BANKING. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; PROVIDED,
HOWEVER, that all payments of funds in respect of the Subordinated Debentures
held by the Property Trustee shall be made directly to the Property Trustee
Account and no other funds of the Trust shall be deposited in the Property
Trustee Account. The sole signatories for such accounts shall be designated
by the Regular Trustees; PROVIDED, HOWEVER, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
SECTION 11.4. WITHHOLDING. The Trust and the Trustees shall
comply with all withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and
forms as shall reasonably be requested by the Trust to assist it in
determining the extent of, and in fulfilling, its withholding obligations.
The Regular Trustee(s) shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the
Holder to applicable jurisdictions. To the extent that the Trust is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be
deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over-withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount withheld was not
withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. AMENDMENTS. (a) Except as otherwise provided in
this Declaration or by any applicable terms of the
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Securities, this Declaration may be amended by, and only by, a written
instrument approved and executed by the Regular Trustees (or, if there are
more than two Regular Trustees, a majority of the Regular Trustees);
PROVIDED, HOWEVER, that:
(i) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(1) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officer's
Certificate from each of the Trust and the Sponsor that
such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the
Securities);
(2) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or
immunities of the Property Trustee, the Property Trustee
shall have first received:
(A) an Officer's Certificate from each of the Trust and
the Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of
the Securities); and
(ii) no amendment shall be made, and any such purported amendment
shall be void and ineffective, to the extent the result thereof would be
to
(A) cause the Trust not to be characterized for purposes
of United States federal income taxation as a grantor trust and each
Holder of Securities not to be treated as owning an undivided
beneficial interest in the Subordinated Debentures, as evidenced by
an Opinion of Counsel to the effect that such amendment shall not
result in the foregoing;
(B) affect adversely the rights, powers, duties,
obligations or immunities of the Property Trustee or the Delaware
Trustee; or
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(C) cause the Trust to be deemed to be an Investment
Company which is required to be registered under the Investment
Company Act;
(iii) at such time after the Trust has issued any Securities which
remain outstanding, any amendment which would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only
with such additional requirements as may be set forth in the terms of such
Securities;
(iv) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(v) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities; and
(vi) the rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities.
(b) Notwithstanding Section 12.1(a)(iii), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this Declara-
tion;
(iii) to add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
SECTION 12.2. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT. (a) Meetings of the Holders of any class of Securities may
be called at any time by the Regular
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Trustees (or as provided in the terms of the Securities) to consider and act
on any matter on which Holders of such class of Securities are entitled to
act under the terms of this Declaration, the terms of the Securities or the
rules of any stock exchange on which the Pre ferred Securities are listed or
admitted for trading. The Regular Trustees shall call a meeting of such
class of Holders, if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more calls in a writing stating
that the signing Holders of Securities wish to call a meeting and indicating
the general or specific purpose for which the meeting is to be called. Any
Holders of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least seven (7) days and not
more than sixty (60) days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning
not less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at which
all Holders of Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be
given to the Holders of Securities entitled to vote who have not consented
in writing. The Regular Trustees may specify that any written ballots
submitted to the Holders of Securities for the purpose of taking any
action without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which such Holder of Securities is entitled to
participate, including waiving no-
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tice of any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder of Securities executing it.
Except as otherwise provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate.
(iv) Unless the Business Trust Act, this Declaration, the Trust
Indenture Act, the terms of the Securities or the listing rules of any
stock exchange on which the Preferred Securities are then listed or
trading otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1. REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Succes
sor Property Trustee represents and warrants to the Trust and the Sponsor at
the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a national banking association duly
organized under the laws of the United States of America, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
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(b) The execution, delivery and performance by the Property Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been
duly executed and delivered by the Property Trustee, and it constitutes a
legal, valid and binding obligation of the Property Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-Laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2. REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Delaware Trustee represents and warrants to the Trust and the Sponsor at
the date of this Declaration, that the Delaware Trustee has been authorized to
perform its obligations under the Certificate of Trust and this Declaration.
This Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in
equity or at law). The Delaware Trustee satisfies for the Trust Section 3807
of the Business Trust Act.
ARTICLE XIV
SUCCESSOR CORPORATION
SECTION 14.1. SPONSOR MAY CONSOLIDATE, ETC. Nothing contained in
this Declaration or in any of the Securities shall prevent any consolidation or
merger of the Sponsor with or into any other Person or Persons (whether or not
affiliated with the Sponsor), or successive consolidations or mergers in which
the
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Sponsor or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance, transfer or other disposition of the property
of the Sponsor or its successor or successors as an entirety, or
substantially as an entirety, to any other Person (whether or not affiliated
with the Sponsor or its successor or successors) authorized to acquire and
operate the same provided that (a) any Person formed in such consolidation or
into which the Sponsor is merged or to which the Sponsor has sold, conveyed,
transferred or otherwise disposed of its properties as an entirety or
substantially as an entirety is an entity validly existing under the laws of
the jurisdiction of its organization and such Person assumes the Sponsor's
obligations under this Declaration and (b) immediately after giving effect to
the transaction no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred
and be continuing; PROVIDED, FURTHER, the Sponsor hereby covenants and agrees
that, upon any such consolidation, merger, sale, conveyance, transfer or
other disposition, the due and punctual payment, performance and observance
of all the covenants and conditions of this Declaration to be paid, performed
or observed by the Sponsor, shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act,
as then in effect) satisfactory in form to the Property Trustee executed and
delivered to the Property Trustee by the entity formed by such consolidation,
or into which the Sponsor shall have been merged, or by the entity which
shall have acquired such property; and PROVIDED FURTHER that, if the Person
formed in such consolidation or into which the Sponsor is merged or to which
the Sponsor has sold, conveyed, transferred or otherwise disposed of its
properties as an entirety or substantially as an entirety is not organized
and validly existing under the laws of the United States, any state thereof
or the District of Columbia, the supplemental indenture described in this
Section 14.1 shall also contain the following provisions:
"(a) [Such Person] hereby agrees to pay to the Holders of Trust
Securities any additional amounts as may be necessary in order that every net
payment or other amount due on the Trust Securities, after withholding for or
on account of any present or future tax, assessment or governmental charge
imposed upon such Holder of Trust Securities (except for a tax, assessment or
charge imposed solely as a result of a connection between the recipient and
the jurisdiction imposing such tax, assessment or charge) by reason of or as
a result of such payment or other amount being paid by an entity which is not
an entity existing under the laws of the United States or any state thereof
or the District of Columbia, will not be less than the amount provided for in
the Indenture, this Indenture Supplement, the Trust Securities or the
Preferred
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Securities Guarantee related to the Preferred Securities, as the case may be,
to be then due and payable.
(b) Any litigation based hereon, or arising out of, under, or in
connection with, the Indenture and/or this Supplemental Indenture or any
other document relating hereto or thereto, or any course of conduct, course
of dealing, statements (whether verbal or written) or actions of the Trustee
or [such Person] shall be brought and maintained exclusively in the courts of
the State of Illinois or in the United States District court for the Northern
District of Illinois; PROVIDED, HOWEVER, that any suit seeking enforcement
against any property may be brought at Trustee's or [such Person's] option, in
the courts of any jurisdiction where such property may be found. [Such Person]
hereby expressly and irrevocably submits to the jurisdiction of the courts of
the State of Illinois and of the United States District Court for the Northern
District of Illinois for the purpose of any such litigation as set forth above
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with such litigation. [Such Person] further irrevocably consents to
the service of process by registered mail, postage prepaid, or by personal
service within or without the State of Illinois. [Such Person] hereby
expressly and irrevocably waives, to the fullest extent permitted by law, any
objection which it may have or hereafter may have to the laying of venue of
any such litigation brought in any such court referred to above and any claim
that any such litigation has been brought in an inconvenient forum. To the
extent that [such Person] has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service
or notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, [such Person] hereby
irrevocably waives such immunity in respect of its obligations under the
Indenture and this Supplemental Indenture."
SECTION 14.2. SUCCESSOR PERSON SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to the Property
Trustee and satisfactory in form to the Property Trustee, of the due and
punctual payment, performance and observance of all of the covenants and
conditions of this Declaration to be paid, performed or observed by the
Sponsor, such successor Person shall succeed to and be substituted for the
Sponsor with the same effect as if it had been named as the Sponsor herein.
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(b) Nothing contained in this Declaration or in any of the
Securities shall prevent the Sponsor from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other Person
(whether or not affiliated with the Sponsor).
SECTION 14.3. EVIDENCE OF CONSOLIDATION, ETC. TO PROPERTY TRUSTEE.
The Property Trustee, subject to the provisions of Section 3.9, may receive
an opinion of counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or other disposition, and any such
assumption, comply with the provisions of this Article.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. NOTICES. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
TDS CAPITAL I
c/o Telephone and Data Systems, Inc.
30 North LaSalle Street
Chicago, Illinois 60602
Attention: President and
Chief Executive Officer
Facsimile: 312-630-9299
(b) if given to the Property Trustee, at the mailing address set
forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0216
Chicago, Illinois 60670-0216
Attention: Corporate Trust Administration
Facsimile: 312-407-4656
(c) if given to the Delaware Trustee, at the mailing address of the
Property Trustee with a copy to the address set
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forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, Delaware 19801
Facsimile: 815-356-0391
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Telephone and Data Systems, Inc.
30 North LaSalle Street
Chicago, Illinois 60602
Attention: President and
Chief Executive Officer
Facsimile: 312-630-9299
(d) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 15.2. GOVERNING LAW. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
SECTION 15.3. INTENTION OF THE PARTIES. It is the intention of the
parties hereto that the Trust not be characterized for United States federal
income tax purposes as an association taxable as a corporation or a partnership
but rather, that the Trust be characterized as a grantor trust or otherwise in
a manner such that each Holder of Securities be treated as owning an undivided
beneficial interest in the Subordinated Debentures. The provisions of this
Declaration shall be interpreted to further this intention of the parties.
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SECTION 15.4. HEADINGS. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 15.5. SUCCESSORS AND ASSIGNS. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns
of such party shall be deemed to be included, and all covenants and agreements
in this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 15.6. PARTIAL ENFORCEABILITY. If any provision of this
Declaration, or the application of such provision to any Person or circum-
stance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 15.7. COUNTERPARTS. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
--------------------------
as Trustee
--------------------------
as Trustee
--------------------------
as Trustee
THE FIRST NATIONAL BANK OF CHICAGO
Not in its individual capacity but
solely as Property Trustee
By:
------------------------------
Title:
FIRST CHICAGO DELAWARE INC.
Not in its individual capacity
but solely as Delaware Trustee
By:
------------------------------
Title:
TELEPHONE AND DATA SYSTEMS, INC.
as Sponsor
By:
------------------------------
Title:
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EXHIBIT A
TERMS OF
8.50% TRUST ORIGINATED PREFERRED SECURITIES
8.50% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust
of TDS Capital I dated as of November 18, 1997 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and
the Common Securities are set out below (each capitalized term used but not
defined herein has the meaning set forth in the Declaration or, if not
defined in such Declaration, as defined in the Prospectus referred to below):
1. DESIGNATION AND NUMBER.
(a) PREFERRED SECURITIES. Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of One
hundred fifty million dollars ($150,000,000) and a liquidation amount with
respect to the assets of the Trust of $25 per Preferred Security, are hereby
designated for the purposes of identification only as "8.50% Trust Originated
Preferred Securities" (the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in
the form attached hereto as Annex I, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or
practice.
(b) COMMON SECURITIES. Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of Four million
six hundred forty thousand dollars ($4,640,000) and a liquidation amount with
respect to the assets of the Trust of $25 per Common Security, are hereby
designated for the purposes of identification only as "8.50% Trust Originated
Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form attached hereto as Annex II, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
2. DISTRIBUTIONS. (a) Distributions payable on each Security will be
fixed at a rate per annum of 8.50% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such
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rate being the rate of interest payable on the Subordinated Debentures to be
held by the Property Trustee. Distributions in arrears will bear interest
compounded quarterly at the Coupon Rate to the extent permitted by applicable
law. The term "Distributions," as used herein, includes any such interest
payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Subordinated Debentures held
by the Property Trustee. Distributions on Preferred Securities shall be paid
to the extent that the Trust has funds available for the payment of
distributions in the Property Trustee Account. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period, on the basis of the
actual number of days elapsed in such a 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of initial issuance of such Securities and will be payable quarterly
in arrears, on March 31, June 30, September 30, and December 31 of each year,
commencing on December 31, 1997, except as otherwise described below. The
Debenture Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the
Subordinated Debentures for a period not exceeding twenty consecutive
quarters (each such period, an "Extension Period") and, as a consequence of
such extension, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate, compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; PROVIDED that such Extension Period, together with all such previous
and further extensions thereof, may not exceed twenty consecutive quarters or
extend beyond the maturity of the Subordinated Debentures. Payments of
accrued Distributions will be payable to Holders as they appear on the books
and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book-entry only form,
the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payment dates on
the Subordinated
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Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred
Securities will be made as described under the heading "Description of the
Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" in the Prospectus dated October 30, 1997, as supplemented by the
Prospectus Supplement dated November 13, 1997 (the "Prospectus") of the Trust
included in the Registration Statement on Form S-3 of the Sponsor and the
Trust. The relevant record dates for the Common Securities, and if the
Preferred Securities shall not continue to remain in book-entry-only form,
the relevant record dates for the Preferred Securities, shall conform to the
rules of any securities exchange on which the securities are listed and, if
none, shall be selected by the Regular Trustees, which dates shall be at
least one Business Day but less than 60 Business Days before the relevant
payment dates which payment dates correspond to the interest payment dates on
the Subordinated Debentures. Distributions payable on any Securities that
are not punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Subordinated
Debentures, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Securities will be entitled to receive out of the assets
of the Trust available for distribution to Holders of Securities, after
paying or making reasonable provision to pay all claims and obligations of
the Trust in accordance with Section 3808(e) of the Business Trust Act, an
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to
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the date of payment (such amount being the "Liquidation Distribution"),
unless, in connection with such dissolution, winding-up or termination,
Subordinated Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities,
shall be distributed on a Pro Rata basis to the Holders of the Securities in
exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION. (a) Upon the repayment of the Subordinated Debentures
in whole or in part, whether at maturity or upon acceleration, redemption or
otherwise, the proceeds from such repayment or payment shall be
simultaneously applied to redeem Securities having an aggregate stated
liquidation amount equal to the aggregate principal amount of the
Subordinated Debentures so repaid or redeemed at a redemption price of $25
per Security plus an amount equal to accrued and unpaid Distributions thereon
at the date of the redemption, payable in cash (the "Redemption Price").
Holders will be given not less than 30 nor more than 60 days notice of such
redemption except in the case of payments upon maturity.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata
and the Preferred Securities to be redeemed will be as described in Section
4(f)(ii) below.
(c) If, at any time, a Tax Event (as defined below) shall occur and be
continuing, the Regular Trustees, upon not less than 30 nor more than 60 days
notice, may redeem the Securities in whole or in part for cash within 90 days
following the occurrence of such Tax Event (the "90 Day Period") at the
Redemption Price on a Pro Rata basis PROVIDED, that, if at the time there is
available to the Sponsor or Trust the opportunity to eliminate, within the 90
Day Period, the Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure that has no adverse effect on the Sponsor, the
Trust, the Debenture Issuer or the Holders of the Securities, the Trust will
pursue such Ministerial Action in lieu of redemption.
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"TAX EVENT" means that the Regular Trustees shall have received an
opinion from independent tax counsel experienced in such matters (a
"Redemption Tax Opinion") to the effect that, on or after the latest date of
the Prospectus, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or (b) any amendment to, or change in, an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced or which action is taken, in each case
on or after the latest date of the Prospectus, there is more than an
insubstantial risk that interest payable by the Debenture Issuer to the Trust
on the Subordinated Debentures is not, or within 90 days of the date thereof
will not be, deductible, in whole or in part, by the Debenture Issuer for
United States federal income tax purposes.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities
for all quarterly Distribution periods terminating on or before the date of
redemption.
5. DISTRIBUTION OF SUBORDINATED DEBENTURES IN EXCHANGE FOR SECURITIES.
(a) On and from the date fixed by the Trustees for any distribution of
Subordinated Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depositary") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Subordinated
Debentures to be delivered upon such distribution, and (iii) any certificates
representing Securities, except for certificates representing Preferred
Securities held by the Depository or its nominee (or any successor Clearing
Agency or its nominee), will be deemed to represent beneficial interests in
the Subordinated Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to
the Coupon Rate of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on, such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissue.
(b) If the Subordinated Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Subordinated Debentures listed on the
American Stock Exchange or on
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<PAGE>
such other exchange as the Preferred Securities were listed immediately prior
to the distribution of the Subordinated Debentures.
6. REDEMPTION OR DISTRIBUTION PROCEDURES. (a) Notice of any redemption
of, or notice of distribution of Subordinated Debentures in exchange for, the
Securities (a "Redemption/Distribution Notice") will be given by the Trust by
mail to each Holder of Securities to be redeemed or exchanged not fewer than
30 nor more than 60 days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date fixed for
redemption of the Subordinated Debentures. For purposes of the calculation
of the date of redemption or exchange and the dates on which notices are
given pursuant to this Section 6(a), a Redemption/Distribution Notice shall
be deemed to be given on the day such notice is first mailed by first-class
mail, postage prepaid, to Holders of Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(b) In the event that fewer than all the outstanding Securities are to
be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from
each Holder of Preferred Securities; PROVIDED that if, as a result of such
Pro Rata redemption, Clearing Agency Participants would hold fractional
interests in the Preferred Securities, the Depositary will adjust the amount
of the interest of each Clearing Agency Participant to be redeemed to avoid
such fractional interests.
(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Subordinated Debentures are redeemed as set out in this Section 4 (which
notice will be irrevocable), then (i) while the Preferred Securities are in
book entry only form, with respect to the Preferred Securities, by 12:00
noon, New York City time, on the redemption date, PROVIDED that the Debenture
Issuer has paid the Property Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Subordinated
Debentures, the Property Trustee will deposit irrevocably with the Depositary
or its nominee (or successor Clearing Agency or its nominee) funds sufficient
to pay the applicable Redemption Price with respect to the Preferred
Securities and will give the Depositary irrevocable instructions and
authority to pay the Redemption Price to the Holders of the Preferred
Securities, and (ii) if the Preferred Securities are issued in definitive
form, with respect to the
A-6
<PAGE>
Preferred Securities, and with respect to the Common Securities, PROVIDED
that the Debenture Issuer has paid the Property Trustee a sufficient amount
of cash in connection with the related redemption or maturity of the
Subordinated Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given and funds have been deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or on
the redemption date, as applicable, all rights of Holders of such Securities
so called for redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust shall be
required to register or cause to be registered the transfer of any Securities
which have been so called for redemption. If any date fixed for redemption
of Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of Securities is
improperly withheld or refused and not paid either by the Property Trustee or
by the Sponsor as Guarantor pursuant to the Preferred Securities Guarantee,
Distributions on such Securities will continue to accrue, from the original
redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(d) Redemption/Distribution Notices shall be sent to (i) in respect of
the Preferred Securities, the Depositary or its nominee (or any successor
Clearing Agency or its nominee) if Global Certificates have been issued or if
Definitive Preferred Security Certificates have been issued, to the Holders
thereof, and (ii) in respect of the Common Securities, to the Holders thereof.
(e) Subject to applicable law (including, without limitation, United
States federal securities laws), the Sponsor or any of its Affiliates may at
any time and from time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
7. VOTING RIGHTS - PREFERRED SECURITIES. (a) Except as provided under
Sections 7(b) and 9 and as otherwise required by law
A-7
<PAGE>
and the Declaration, the Holders of the Preferred Securities will have no
voting rights.
(b) The Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class, may direct the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee, or direct the of exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including (i) directing the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to the Subordinated Debentures, (ii) waive any past
default and its consequences that are waivable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of
all the Subordinated Debentures shall be due and payable, or (iv) consent to
any amendment, modification or termination of the Indenture or the
Subordinated Debentures, where such consent shall be required, PROVIDED,
HOWEVER, that where a consent under the Indenture would require the consent
of greater than a majority of the Holders in principal amount of Subordinated
Debentures affected thereby (a "Super Majority"), the Property Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Subordinated Debentures. The Property Trustee shall not take any action in
accordance with the directions of the Holders of the Preferred Securities
under this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that, for the purposes of United States
federal income tax, the Trust will not be classified as other than a grantor
trust on account of such action and that each Holder of Securities will
continue to be treated as owning an undivided beneficial interest in the
Subordinated Debentures on account of such action. If the Property Trustee
fails to enforce its rights under the Declaration, any Holder of Preferred
Securities may, to the fullest extent permitted by law, institute a legal
proceeding directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities may be given
at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders
A-8
<PAGE>
is to be taken, to be mailed to each Holder of record of Preferred
Securities. Each such notice will include a statement setting forth (i) the
date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Subordinated Debentures in accordance with the Declaration and
the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor, or by any entity directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
8. VOTING RIGHTS - COMMON SECURITIES. (a) Except as provided under
Section 8(b) and (c) and as otherwise required by law and the Declaration,
the Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Only after the Event of Default with respect to the Preferred
Securities has been cured, waived or otherwise eliminated, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as
a class, may direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the Declaration, including
(i) directing the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust or power
conferred on the Debenture Trustee with respect to the Subordinated
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 6.06 of the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Subordinated Debentures
shall be due and payable, or (iv) consent to any amendment, modification or
termination of the Indenture or the Subordinated
A-9
<PAGE>
Debentures, where such consent shall be required, PROVIDED, HOWEVER,
that where a consent under the Indenture would require the consent of
a Super Majority, the Property Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of
the Common Securities which the relevant Super Majority represents of the
aggregate principal amount of the Subordinated Debentures. The Property
Trustee shall not take any action in accordance with the direc tions of the
Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of independent tax counsel to the effect
that, for the purposes of United States federal income tax, the Trust will
not be classified as other than a grantor trust on account of such action and
that each Holder of Securities will continue to be treated as owning an
undivided beneficial interest in the Subordinated Debentures on account of
such action. If the Property Trustee fails to enforce its rights under the
Declaration, any Holder of Common Securities may, to the fullest extent
permitted by law, institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given at
a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Subordinated Debentures in accordance with the Declaration and
the terms of the Securities.
9. AMENDMENTS. If any proposed amendment to the Declaration provides
for, or the Regular Trustees otherwise propose to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the
Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the dissolution, winding-up or termination of the Trust, other than as
described in
A-10
<PAGE>
Section 8.1 of the Declaration, then the Holders of outstanding Securities,
as a single class, will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such amendment or proposal
shall not be effective except with the approval of the Holders of at least
66-2/3 in liquidation amount of the Securities affected thereby, provided
that a reduction of the aggregate liquidation amount or the distribution
rate, or a change in the payment dates or maturities of the Preferred
Securities shall not be permitted without the consent of each holder of the
Preferred Securities. In the event any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of 66-2/3 in liquidation amount of such
class of Securities.
10. PRO RATA. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default under the Indenture has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Preferred Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities
held by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
11. RANKING. The Preferred Securities rank PARI PASSU and payment
thereon shall be made Pro Rata with the Common Securities except that when an
Event of Default occurs and is continuing, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities.
12. LISTING. The Regular Trustees shall use their best efforts to
cause the Preferred Securities to be listed for quotation on the American
Stock Exchange, Inc.
A-11
<PAGE>
13. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE. Each Holder of
Preferred Securities and Common Securities, by the acceptance thereof, agrees
to the provisions of the Preferred Securities Guarantee, including the
subordination provisions therein and to the provisions therein and to the
provisions of the Indenture.
14. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have no
preemptive rights to subscribe for any additional Securities.
15. MISCELLANEOUS. These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration and the Preferred
Securities Guarantee to a Holder without charge on written request to the
Sponsor at its principal place of business.
A-12
<PAGE>
ANNEX I
FORM OF PREFERRED SECURITY CERTIFICATE
(IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT-
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security as a whole (except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede
& Co. or such other name as is requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. ___________
Certificate Evidencing Preferred Securities
of
TDS Capital I
Preferred Securities
(Liquidation Amount $25 per Preferred Security)
TDS CAPITAL I, a business trust formed under the laws of the State of
Delaware (the "TRUST"), hereby certifies that ________ (the "Holder") is the
registered owner of preferred securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ___% Trust
Originated Preferred Securities (liquidation amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable
I-1
<PAGE>
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper
form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of _______, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Exhibit A to the Declaration. Capitalized terms
used herein but not defined herein shall have the respective meanings given
them in the Declaration. The Holder is entitled to the benefits of the
Preferred Securities Guarantee to the extent provided therein and, by
acceptance hereof, agrees to the subordination provisions and other terms of
the Preferred Securities Guarantee. The Trust will provide a copy of the
Declaration and the Preferred Securities Guarantee to the Holder without
charge upon written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Subordinated
Debentures as indebtedness and the Preferred Securities as evidence of
indirect beneficial ownership in the Subordinated Debentures.
I-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this
________ day of ________, 1997.
TDS CAPITAL I
By:
-------------------------
as Regular Trustee
By:
-------------------------
as Regular Trustee
By:
-------------------------
as Regular Trustee
--------------------------
I-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -----------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -----------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
agent to
- -----------------------------------------------------------------
transfer this Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date: -------------------------
Signature:
---------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate.)
<PAGE>
ANNEX II
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TDS CAPITAL I
Common Securities
(Liquidation Amount $25 per Common Security)
TDS CAPITAL I, a business trust formed under the laws of the State
of Delaware (the "Trust"), hereby certifies that _____ (the "Holder") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ___% Trust
Originated Common Securities (liquidation amount $25 per Common Security)
(the "Common Securities"). Except as set forth in the Declaration (as
defined below), the Common Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of ________, 1997, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Exhibit A
to the Declaration. Capitalized terms used herein but not defined herein
shall have the respective meanings given them in the Declaration. The Trust
will provide a copy of the Declaration to the Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat the Subordinated Debentures
as indebtedness and the Common Securities as evidence of indirect beneficial
ownership in the Subordinated Debentures.
II-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of ________, 1997.
TDS CAPITAL I
By:
-------------------------
as Regular Trustee
By:
-------------------------
as Regular Trustee
By:
-------------------------
as Regular Trustee
------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- -------------------------------------------------------------------------------
- ---------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- ---------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
agent to
- ---------------------------------------------------------------
transfer this Common Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.
Date:
-------------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate.)
II-2
<PAGE>
____________________________________
PREFERRED SECURITIES GUARANTEE AGREEMENT
TDS Capital I
Dated as of November 18, 1997
____________________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . 1
Section 1.2. Interpretation . . . . . . . . . . . . . . . . 5
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application . . . . . . . 5
Section 2.2. Lists of Holders of Preferred Securities . . . 6
Section 2.3. Reports by the Guarantee Trustee . . . . . . . 6
Section 2.4. Periodic Reports to Guarantee Trustee. . . . . 6
Section 2.5. Evidence of Compliance with Conditions
Precedent . . . . . . . . . . . . . . . . . 6
Section 2.6. Events of Default; Waiver. . . . . . . . . . . 7
Section 2.7. Events of Default; Notice. . . . . . . . . . . 7
Section 2.8. Conflicting Interests. . . . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee . . 7
Section 3.2. Certain Rights of Guarantee Trustee. . . . . . 9
Section 3.3. Not Responsible for Recitals or Issuance
of Guarantee. . . . . . . . . . . . . . . . 12
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility . . . . . . . . 12
Section 4.2. Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . . 13
ARTICLE V
GUARANTEE
Section 5.1. Guarantee. . . . . . . . . . . . . . . . . . . 13
Section 5.2. Waiver of Notice and Demand. . . . . . . . . . 14
Section 5.3. Obligations Not Affected . . . . . . . . . . . 14
Section 5.4. Rights of Holders. . . . . . . . . . . . . . . 15
Section 5.5. Guarantee of Payment . . . . . . . . . . . . . 15
Section 5.6. Subrogation. . . . . . . . . . . . . . . . . . 15
Section 5.7. Independent Obligations. . . . . . . . . . . . 16
i
<PAGE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transaction. . . . . . . . . . 16
Section 6.2. Ranking. . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
Section 7.1. Termination. . . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Exculpation. . . . . . . . . . . . . . . . . 17
Section 8.2. Indemnification. . . . . . . . . . . . . . . 18
ARTICLE IX
SUCCESSOR CORPORATION
Section 9.1. Guarantor May Consolidate, Etc . . . . . . . 18
Section 9.2. Successor Corporation Substituted. . . . . . 20
Section 9.3. Evidence of Consolidation, Etc. to
Trustee . . . . . . . . . . . . . . . . . 20
ARTICLE IX
MISCELLANEOUS
Section 10.1. Successors and Assigns. . . . . . . . . . . 21
Section 10.2. Amendments. . . . . . . . . . . . . . . . . 21
Section 10.3. Notices . . . . . . . . . . . . . . . . . . 21
Section 10.4. Benefit . . . . . . . . . . . . . . . . . . 22
Section 10.5. Governing Law . . . . . . . . . . . . . . . 22
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Guarantee
Agree ment"), dated as of November 18, 1997, is executed and delivered by
TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation (the "Guarantor"), and
The First National Bank of Chicago, a national banking association duly
organized and existing under the laws of the United States, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of TDS Capital
I, a Delaware statutory business trust (the "ISSUER").
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "DECLARATION"), dated as of November 18, 1997, among the trustees of the
Issuer, the Guarantor as Sponsor and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof $150,000,000 aggregate stated liquidation amount
of its 8.50% Trust Originated Preferred Securities (the "Preferred
Securities"); and
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Guarantee Agreement, to pay to the Holders of
the Preferred Securities the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS. In this Guarantee Agreement, unless the
context otherwise requires: (a) capitalized terms used in this Guarantee
Agreement but not defined in the preamble above have the respective meanings
as signed to them in this Section 1.1; (b) a term defined anywhere in this
Guarantee Agreement has the same meaning throughout; and (c) a term defined
in the Trust Indenture Act has the same meaning when used in this Guarantee
Agreement unless otherwise defined in this Guarantee Agreement or unless the
context otherwise requires.
1
<PAGE>
AFFILIATE:
The term "Affiliate" has the same meaning as given to that term in
Rule 405 of the Securities Act of 1933 or any successor rule thereunder.
BUSINESS DAY:
The term "Business Day" means any day other than a day on which
banking institutions in Chicago, Illinois or New York, New York are
authorized or required by any applicable law to close.
COMMON SECURITIES:
The term "Common Securities" means the securities representing
common undivided beneficial interests in the assets of the Issuer.
COVERED PERSON:
The term "Covered Person" means any Holder or beneficial owner of
Preferred Securities.
EVENT OF DEFAULT:
The term "Event of Default" means a default by the Guarantor on any
of its payment or other obligations under this Guarantee Agreement.
GUARANTEE PAYMENTS:
The term "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
the Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid Dis
tributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than
in connection with the distribution of Subordinated Debentures to the Holders
in exchange for Preferred Securities as provided in the Declaration), the
lesser of (a) the aggregate of the liquidation amount and all accrued and
unpaid Distributions on the Preferred Securities to the date of payment to
the extent the Issuer has funds available therefor, and (b) the amount of
assets of the Issuer remaining
2
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available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
GUARANTEE TRUSTEE:
The term "Guarantee Trustee" means The First National Bank of
Chicago, as trustee under this Guarantee Agreement, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means such
Successor Guarantee Trustee.
GUARANTOR:
The term "Guarantor" means Telephone and Data Systems, Inc., and
its successor or successors by merger, consolidation or purchase of all or
substantially all of its assets.
HOLDER:
The term "Holder" shall mean any holder, as registered on the books
and records of the Issuer, of any Preferred Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Pre-
ferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
INDEMNIFIED PERSON:
The term "Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Guarantee
Trustee.
INDENTURE:
The term "Indenture" means the Indenture dated as of October 15,
1997, between the Guarantor (the "Debenture Issuer") and The First National
Bank of Chicago, as trustee, and any amendment thereto and any indenture
supplemental thereto pursuant to which certain unsecured subordinated debt
securities of the Debenture Issuer are to be issued to the Property Trustee
of the Issuer.
MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES:
The term "Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of
Preferred Securities, voting separately as a class, of more than 50% of the
liquidation amount (including
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the stated amount that would be paid on redemption, liquidation or maturity,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all Preferred Securities.
OFFICER'S CERTIFICATE:
The term "Officer's Certificate" means, with respect to any Person,
a certificate signed by an authorized officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each such officer signing the
Officer's Certificate has read the covenant or condition and the
definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each such officer in
rendering the Officer's Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
PERSON:
The term "Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint stock company, unincorporated
association or government or any agency or political subdivision thereof, or
any other entity of whatever nature.
RESPONSIBLE OFFICER:
The term "Responsible Officer", when used with respect to the
Guarantee Trustee, means the Chairman of the board of directors, the
President, any Vice President, the Secretary, the Treasurer, any trust
officer, any corporate trust officer or any other officer or assistant
officer of the Guarantee Trustee customarily performing functions similar to
those performed by any of the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred
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because of that officer's knowledge of and familiarity with the particular
subject.
SUBORDINATED DEBENTURES:
The term "Subordinated Debentures" means the series of unsecured
subordinated debt securities of the Guarantor designated the 8.50% Junior
Subordinated Deferable Interest Debentures due December 31, 2037 held by the
Property Trustee of the Issuer.
SUCCESSOR GUARANTEE TRUSTEE:
The term "Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under
Section 4.1.
TRUST INDENTURE ACT:
The term "Trust Indenture Act" means the Trust Indenture Act of
1939.
SECTION 1.2. INTERPRETATION. Each definition in this Guarantee
Agreement includes the singular and the plural, and references to the neuter
gender include the masculine and feminine where appropriate. Terms which
relate to accounting matters shall be interpreted in accordance with
generally accepted accounting principles in effect from time to time.
References to any statute mean such statute as amended at the time and
include any successor legislation. The word "or" is not exclusive, and the
words "herein," "hereof" and "hereunder" refer to this Guarantee Agreement as
a whole. The headings to the Articles and Sections are for convenience of
reference and shall not affect the meaning or interpretation of this
Guarantee Agreement. References to Articles and Sections mean the Articles
and Sections of this Guarantee Agreement unless otherwise specified.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions.
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(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. LISTS OF HOLDERS OF PREFERRED SECURITIES.
(a) The Guarantor shall provide the Guarantee Trustee with a list,
in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders of the Preferred Securities ("List of Holders")
as of such date, (i) within ten Business Days after January 1 and June 30 of
each year, and (ii) at any other time, within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Guarantee Trustee,
PROVIDED that the Guarantor shall not be obligated to provide such List of
Holders at any time when the List of Holders does not differ from the most
recent List of Holders given to the Guarantee Trustee by the Guarantor. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days
after May 15 of each year, the Guarantee Trustee shall provide to the Holders
of the Preferred Securities such reports as are required by Section 313 of
the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of
an Officer's Certificate.
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SECTION 2.6. EVENTS OF DEFAULT; WAIVER. The Holders of a Majority
in liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default
and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.7. EVENTS OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after a
Responsible Officer has knowledge of the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders of the
Preferred Securities, notices of all Events of Default known to the Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice, provided, that the Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee, or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the
Preferred Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the
Declaration shall have obtained written notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS. The Declaration shall be
deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders of the Preferred Securities, and the
Guarantee Trustee shall not transfer this Guarantee Agreement to any Person
except to a Holder of Preferred Securities exercising the rights of such
Holder pursuant to
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Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, and such vesting of
title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders of the Preferred Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.6), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions of
this Guarantee Agreement, and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations
as are specifically set forth in this Guarantee Agreement, and
no implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions
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expressed therein, upon any certificates or opinions furnished to the
Guarantee Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished to
the Guarantee Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Preferred Securities at
the time outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers,
if there is reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it under the
terms of this Guarantee Agreement or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully pro-
tected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, security or other paper or
document believed by it to be genuine and to
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have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by a di-
rection or an Officer's Certificate.
(iii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officer's Certificate which, upon
receipt of such request, shall be promptly delivered by the Guar-
antor.
(iv) The Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
(v) The Guarantee Trustee may consult with counsel and the
written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such coun-
sel may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration
of this Guarantee Agreement from any court of competent jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee reasonable
security or indemnity against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred
by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; pro-
vided that, nothing contained in this Section 3.2(a)(vi) shall,
however, relieve the Guarantee Trustee, upon the occurrence of an
Event of
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Default, of its obligation to exercise the rights and powers vested in it
by this Guarantee Agreement.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, security or other papers
or documents, but the Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as
it may see fit.
(viii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities,
and the signature of the Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third
party shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (i) may request in
structions from the Holders of a Majority in liquidation amount of
the Preferred Securities, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are re-
ceived, and (iii) shall be protected in acting in accordance with
such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the
Guarantee Trustee
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shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible so to act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
4.2(c).
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(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Guarantee Trustee and Guarantor shall in all respects comply with the
provi sions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 4.2(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has
been appointed and has accepted such appointment by instrument in writing
executed by such Successor Guarantee Trustee and delivered to the Guarantor
and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the
Issuer may have or assert. The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
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Guarantor to the Holders or by causing the Issuer to pay such amounts to the
Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability
to which it applies or may apply, presentment, demand for payment, any right
to require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agree-
ment, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribu-
tion or any other sums payable under the terms of the Preferred Securities
or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities
(other than an extension of time for payment of Distributions that results
from the extension of any interest payment period on the Subordinated
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjust-
ment of debt of, or other similar proceedings affecting, the Issuer or any
of the assets of the Issuer;
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(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circum
stances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of this Guarantee Agreement or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement.
(b) If the Guarantee Trustee fails to enforce this Guarantee
Agreement, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection.
SECTION 5.6. SUBROGATION. The Guarantor shall be subrogated to
all (if any) rights of the Holders of Preferred Securities against the Issuer
in respect of any amounts paid to such Holders by the Guarantor under this
Guarantee Agreement; provided, however, that the Guarantor shall not (except
to the extent required by mandatory provisions of law) be entitled to enforce
or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such payment,
any amounts are due and unpaid under this Guarantee Agreement. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
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SECTION 5.7. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the
Issuer with respect to the Preferred Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTION. So long as any Preferred
Securities remain outstanding, if there shall have occurred and be continuing
an Event of Default or an event of default under the Declaration, then (a)
the Guarantor shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Guarantor common stock in connection
with the satisfaction by the Guarantor of its obligations under any employee
benefit plans or any other contractual obligations of the Guarantor (other
than a contractual obligation ranking PARI PASSU, with or junior to the
Subordinated Debentures), (ii) as a result of a reclassification of Company
capital stock or the exchange or conversion of one class or series of Company
capital stock for another class or series of Company capital stock or (iii)
the purchase of fractional interests in shares of Company capital stock
pursuant to the conversion or exchange provisions of such Company capital
stock or the security being converted or exchanged), (b) the Guarantor shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Guarantor which rank PARI PASSU with or junior to the Subordinated Debentures
and (c) the Guarantor shall not make any guarantee payments with respect to
the foregoing (other than pursuant to this Guarantee Agreement and other
guarantee agreements entered into by the Guarantor with respect to preferred
securities of any Affiliate of the Guarantor).
SECTION 6.2. RANKING. This Guarantee Agreement will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and
junior in right of payment to all other liabilities of the Guarantor,
including the Subordinated Debentures, except those liabilities of the
Guarantor made PARI PASSU or subordinate by their terms, (ii) PARI PASSU with
the most senior preferred stock now or hereafter issued by the Guarantor and
with any guarantee now or hereafter entered into by
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the Guarantor in respect of any preferred securities of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION. This Guarantee Agreement shall
terminate upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) upon the distribution of the Subordinated Debentures to the
Holders of all of the Preferred Securities or (iii) upon full payment of the
amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwith standing the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Guarantee Agreement and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee Agreement or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Preferred
Securities might properly be paid.
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SECTION 8.2. INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith in accordance with this Guarantee Agreement and in a manner
such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Guarantee Agreement,
except that no Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence or willful misconduct with respect to such acts or
omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).
ARTICLE IX
SUCCESSOR CORPORATION
SECTION 9.1. GUARANTOR MAY CONSOLIDATE, ETC. Nothing contained in
this Guarantee Agreement shall prevent any consolidation or merger of the
Guarantor with or into any other Person or Persons (whether or not affiliated
with the Guarantor), or successive consolidations or mergers in which the
Guarantor or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the
property of the Guarantor or its successor or successors as an entirety, or
substantially as an entirety, to any other Person (whether or not affiliated
with the Guarantor or its successor or successors) authorized to acquire and
operate the same provided that (a) any Person formed in such consolidation or
into which the Company is merged or to which the Company has sold, conveyed,
transferred or otherwise disposed of its properties as an entirety or
substantially as an entirety is an entity validly existing under the laws of
the jurisdiction of its organization and such Person assumes the Company's
obligations under this Guarantee Agreement and (b) immediately after giving
effect to the transaction no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
occurred and be continuing; PROVIDED,
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FURTHER, the Guarantor hereby covenants and agrees that, upon any such
consolidation, merger, sale, conveyance, transfer or other disposition, the
due and punctual payment, performance and observance of all the covenants and
conditions of this Guarantee Agreement to be paid, performed or observed by
the Guarantor shall be expressly assumed, by supplemental indenture (which
shall conform to the provisions of the Trust Indenture Act, as then in
effect) satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which the
Guarantor shall have been merged, or by the entity which shall have acquired
such property; and provided further that, if the Person formed in such
consolidation or into which the Company is merged or to which the Company has
sold, conveyed, transferred or otherwise disposed of its properties as an
entirety or substantially as an entirety is not organized and validly
existing under the laws of the United States, any state thereof or the
District of Columbia, the supplemental indenture described in this Section
9.1 shall also contain the following provisions:
"(a) [Such Person] hereby agrees to pay to the holders of Trust
Securities any additional amounts as may be necessary in order that every
net payment or other amount due on the Trust Securities, after withholding
for or on account of any present or future tax, assessment or governmental
charge imposed upon such holder of Trust Securities (except for a tax,
assessment or charge imposed solely as a result of a connection between
the recipient and the jurisdiction imposing such tax, assessment or
charge) by reason of or as a result of such payment or other amount being
paid by an entity which is not an entity existing under the laws of the
United States or any state thereof or the District of Columbia, will not
be less than the amount provided for in the Indenture, the Trust
Securities, the Guarantee Agreement or this Supplemental Indenture, as the
case may be, to be then due and payable.
(b) Any litigation based hereon, or arising out of, under, or in
connection with, the Guarantee Agreement and/or this Supplemental
Indenture or any other document relating hereto or thereto, or any course
of conduct, course of dealing, statements (whether verbal or written) or
actions of the Trustee or [such Person] shall be brought and maintained
exclusively in the courts of the State of Illinois or in the United States
District Court for the Northern District of Illinois; PROVIDED, HOWEVER,
that any suit seeking enforcement against any property may be brought at
Trustee's or [such Person's] option, in the courts of any jurisdiction
where such property may be found. [Such Person] hereby expressly and
irrevocably submits to the
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jurisdiction of the courts of the State of Illinois and of the United
States District Court for the Northern District of Illinois for the
purpose of any such litigation as set forth above and irrevocably agrees
to be bound by any judgment rendered thereby in connection with such
litigation. [Such Person] further irrevocably consents to the service of
process by registered mail, postage prepaid, or by personal service within
or without the State of Illinois. [Such Person] hereby expressly and
irrevocably waives, to the fullest extent permitted by law, any objection
which it may have or hereafter may have to the laying of venue of any such
litigation brought in any such court referred to above and any claim that
any such litigation has been brought in an inconvenient forum. To the
extent that [such Person] has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution or otherwise) with respect to itself or its property, [such
Person] hereby irrevocably waives such immunity in respect of its
obligations under the Guarantee Agreement and this Supplemental Indenture."
SECTION 9.2. SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment,
performance and observance of all of the covenants and conditions of this
Guarantee Agreement to be paid, performed or observed by the Guarantor, such
successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named as the Guarantor herein.
(b) Nothing contained in this Guarantee Agreement shall prevent
the Guarantor from merging into itself or acquiring by purchase or otherwise
all or any part of the property of any other Person (whether or not
affiliated with the Guarantor).
SECTION 9.3. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE. The
Trustee, subject to the provisions of Section 3.01, may receive an opinion of
counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
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ARTICLE IX
MISCELLANEOUS
SECTION 10.1. SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.
SECTION 10.2. AMENDMENTS. Except with respect to any changes that
do not materially adversely affect the rights of Holders (in which case, no
consent of Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of at least 66-2/3% in
liquidation amount of all the outstanding Preferred Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Preferred Securities apply to the giving of such approval.
SECTION 10.3. NOTICES. All notices provided for in this Guarantee
Agreement shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(a) If given to the Guarantee Trustee, at the Guarantee Trustee's
mailing address set forth below (or such other address as the Guarantee
Trustee may give notice of to the Holders of the Preferred Securities):
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of
to the Holders of the Preferred Securities):
Telephone and Data Systems, Inc.
30 N. LaSalle Street
Chicago, Illinois 60602
Attention: President and Chief Executive Officer
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
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All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 10.4. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
SECTION 10.5. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
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THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
TELEPHONE AND DATA SYSTEMS, INC.
By: _______________________
Title:
THE FIRST NATIONAL BANK OF CHICAGO, Not in its
individual capacity but solely as Guarantee
Trustee
By: _______________________
Title:
<PAGE>
THIS INDENTURE, dated as of October 15, 1997, between TELEPHONE AND
DATA SYSTEMS, INC., an Iowa corporation (the "Company") and THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association, duly organized and existing
under the laws of the United States as trustee (the "Trustee"):
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured subordinated debt securities (hereinafter referred to
as the "Debt Securities"), in an unlimited aggregate principal amount to be
issued from time to time in one or more series as in this Indenture provided,
as registered Debt Securities without coupons, to be authenticated by the
certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the Debt
Securities are to be authenticated, issued and delivered, the Company has
duly authorized the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done;
NOW, THEREFORE, in consideration of the premises and the purchase
of the Debt Securities by the holders thereof, it is mutually covenanted and
agreed as follows for the equal and ratable benefit of the holders of Debt
Securities:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS OF TERMS. The terms defined in this
Section (except as in this Indenture otherwise expressly provided or unless
the context otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings specified in
this Section and shall include the plural as well as the singular. All other
terms used in this Indenture that are defined in the Trust Indenture Act of
1939, as amended, or that are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of the execution of this instrument.
<PAGE>
AFFILIATE:
The term "Affiliate" shall mean, with respect to a specified
Person, (a) any Person directly or indirectly owning, controlling or holding
with power to vote 10% or more of the outstanding voting securities or other
ownership interests of the specified Person, (b) any Person 10% or more of
whose outstanding voting securities or other ownership interests are directly
or indirectly owned, controlled or held with power to vote by the specified
Person, (c) any Person directly or indirectly controlling, controlled by or
under common control with the specified Person, (d) a partnership in which
the specified Person is a general partner, (e) any officer or director of the
specified Person and (f) if the specified Person is an individual, any entity
of which the specified Person is an officer, director or general partner.
AUTHENTICATING AGENT:
The term "Authenticating Agent" shall mean an authenticating agent
with respect to all or any of the series of Debt Securities appointed with
respect to all of such series of the Debt Securities by the Trustee pursuant
to Section 2.10.
BANKRUPTCY LAW:
The term "Bankruptcy Law" shall mean Title 11, United States Code,
or any similar federal or state law for the relief of debtors.
BOARD OF DIRECTORS:
The term "Board of Directors" shall mean the board of directors of
the Company, or any duly authorized committee of such board or any officer of
the Company duly authorized by the board of directors of the Company or a
duly authorized committee of that board.
BOARD RESOLUTION:
The term "Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification; provided that any Board Resolution
that is adopted by an officer of the Company shall be accompanied by a copy
of a resolution of either the board of directors of the Company or a duly
authorized committee of that board, certified as aforesaid, authorizing such
officer to take such action.
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BUSINESS DAY:
The term "Business Day" shall mean, with respect to any series of
Debt Securities, any day other than a day on which federal or state banking
institutions in Chicago, Illinois or the Borough of Manhattan, The City of
New York, are authorized or obligated by law, executive order or regulation
to close.
CERTIFICATE:
The term "Certificate" shall mean a certificate signed by the
princi pal executive officer, the principal financial officer, the treasurer
or the principal accounting officer of the Company. The Certificate need not
comply with the provisions of Section 13.07.
COMMON SECURITIES:
The term "Common Securities" shall mean undivided beneficial
interests in the assets of a Trust which rank pari passu with Preferred
Securities issued by such Trust; PROVIDED, HOWEVER, that upon the occurrence
of an Event of Default, the rights of holders of Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
maturity are subordinated to the rights of holders of Preferred Securities.
COMPANY:
The term "Company" shall mean Telephone and Data Systems, Inc., a
corporation duly organized and existing under the laws of the State of Iowa,
and, subject to the provisions of Article X, shall also include its
successors and assigns.
CORPORATE TRUST OFFICE:
The term "Corporate Trust Office" shall mean the office of the
Trustee at which, at any particular time, its corporate trust business shall
be principally administered, which office at the date hereof is located at
One First National Plaza, Suite 0126, Chicago, Illinois 60670, Attention:
Corporate Trust Office.
CUSTODIAN:
The term "Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
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DECLARATION:
The term "Declaration" shall mean, in respect of a Trust, the
amended and restated declaration of trust of such Trust or any other
governing instrument of such Trust.
DEBT SECURITIES:
The term "Debt Securities" shall mean the Debt Securities
authenticated and delivered under this Indenture.
DEFAULT:
The term "Default" shall mean any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.
DEFAULTED INTEREST:
The term "Defaulted Interest" has the meaning specified in Section
2.03.
DEPOSITARY:
The term "Depositary" shall mean, with respect to Debt Securities
of any series for which the Company shall determine that such Debt Securities
will be issued as a Global Security, The Depository Trust Company, New York,
New York, another clearing agency, or any successor registered as a clearing
agency under the Exchange Act or other applicable statute or regulation,
which, in each case, shall be designated by the Company pursuant to either
Section 2.01 or 2.11.
EVENT OF DEFAULT:
The term "Event of Default" shall mean, with respect to Debt
Securities of a particular series, any event specified in Section 6.01,
continued for the period of time, if any, therein designated.
EXCHANGE ACT:
The term "Exchange Act" shall mean the Securities Exchange Act of
1934.
GLOBAL SECURITY:
The term "Global Security" shall mean, with respect to any series
of Debt Securities, a Debt Security executed by the
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Company and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture, which shall
be registered in the name of the Depositary or its nominee.
GOVERNMENTAL OBLIGATIONS:
The term "Governmental Obligations" shall mean securities that are
(i) direct obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America that,
in either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such Governmental Obligation or a specific
payment of principal of or interest on any such Governmental Obligation held
by such custodian for the account of the holder of such depositary receipt;
PROVIDED, HOWEVER, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect
of the Governmental Obligation or the specific payment of principal of or
interest on the Governmental Obligation evidenced by such depositary receipt.
HEREIN, HEREOF AND HEREUNDER:
The terms "herein", "hereof", and "hereunder" and other words of
similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
INDENTURE:
The term "Indenture" shall mean this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into in accordance with the terms
hereof.
INTEREST PAYMENT DATE:
The term "Interest Payment Date", when used with respect to any
installment of interest on a Debt Security of a particular series, means the
date specified in such Debt Security or in a Board Resolution or in an
indenture supplemental hereto with respect to such series as the fixed date
on which an
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installment of interest with respect to Debt Securities of that series is due
and payable.
OFFICERS' CERTIFICATE:
The term "Officers' Certificate" shall mean a certificate signed by
the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Controller or an Assistant Controller or the Secretary or an
Assistant Secretary of the Company that is delivered to the Trustee in
accordance with the terms hereof. Each such certificate shall include the
statements provided for in Section 13.07, if and to the extent required by
the provisions thereof.
OPINION OF COUNSEL:
The term "Opinion of Counsel" shall mean an opinion in writing of
legal counsel, who may be an employee of or counsel for the Company, that is
delivered to the Trustee in accordance with the terms hereof. Each such
opinion shall include the statements provided for in Section 13.07, if and to
the extent required by the provisions thereof.
OUTSTANDING:
The term "Outstanding", when used with reference to Debt Securities
of any series, means, subject to the provisions of Section 8.04, as of any
particular time, all Debt Securities of that series theretofore authenticated
and delivered by the Trustee under this Indenture, except (a) Debt Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previously been
canceled; (b) Debt Securities or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the necessary
amount shall have been deposited in trust with the Trustee or with any paying
agent (other than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own paying agent);
PROVIDED, HOWEVER, that if such Debt Securities or portions of such Debt
Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article III provided, or provision
satisfactory to the Trustee shall have been made for giving such notice, (c)
Debt Securities in lieu of or in substitution for which other Debt Securities
shall have been authenticated and delivered pursuant to the terms of Section
2.07; and (d) Debt Securities with respect to which the Company has effected
defeasance and/or covenant defeasance as provided in Article XI.
PERSON:
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The term "Person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, joint-stock company,
unincorporated organization or government or any agency or political
subdivision thereof, or any other entity of whatever nature.
PREDECESSOR SECURITY:
The term "Predecessor Security" of any particular Debt Security
means every previous Debt Security evidencing all or a portion of the same
debt and guarantee as that evidenced by such particular Debt Security; and,
for the purposes of this definition, any Debt Security authenticated and
delivered under Section 2.07 in lieu of a lost, destroyed or stolen Debt
Security shall be deemed to evidence the same debt as the lost, destroyed or
stolen Debt Security.
PREFERRED SECURITIES:
The term "Preferred Securities" shall mean undivided beneficial
interests in the assets of a Trust which rank pari passu with Common Securities
issued by such trust; PROVIDED, HOWEVER, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
PREFERRED SECURITIES GUARANTEE:
The term "Preferred Securities Guarantee" shall mean any guarantee
that the Company may enter into with a Trust or other Persons that operate
directly or indirectly for the benefit of holders of Preferred Securities of
such Trust.
PROPERTY TRUSTEE:
The term "Property Trustee" shall mean the entity performing the
functions of the Property Trustee of a Trust under the applicable Declaration
of such Trust.
RESPONSIBLE OFFICER:
The term "Responsible Officer," when used with respect to the
Trustee, means the Chairman of the board of directors, the President, any
Vice President, the Secretary, the Treasurer, any trust officer, any
corporate trust officer or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate
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trust matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
SECURITYHOLDER, HOLDER, HOLDER OF DEBT SECURITIES, REGISTERED HOLDER:
The terms "Securityholder", "Holder", "Holder of Debt Securities",
"registered holder", or other similar term, means the Person or Persons in
whose name or names a particular Debt Security shall be registered on the books
of the Company kept for that purpose in accordance with the terms of this
Indenture.
SECURITY REGISTER AND SECURITY REGISTRAR:
The terms "Security Register" and "Security Registrar" have the
respective meanings set forth in Section 2.05.
SUBSIDIARY:
The term "Subsidiary" shall mean, with respect to any Person, (i)
any corporation at least a majority of whose outstanding Voting Stock shall
at the time be owned, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, (ii) any general partnership, joint venture or similar entity,
at least a majority of whose outstanding partnership or similar interests
shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner.
TRUST:
The term "Trust" shall mean any Delaware business trust formed by the
Company for the purpose of purchasing Debt Securities of the Company.
TRUSTEE:
The term "Trustee" shall mean First National Bank of Chicago, not
in its individual capacity, and, subject to the provisions of Article VII,
shall also include its successors and assigns, and, if at any time there is
more than one Person acting in such capacity hereunder, "Trustee" shall mean
each such Person. The term "Trustee," as used with respect to a particular
series of Debt Securities, shall mean the trustee with respect to that series.
TRUST INDENTURE ACT:
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The term "Trust Indenture Act" shall mean the Trust Indenture Act of
1939.
TRUST SECURITIES:
The term "Trust Securities" shall mean Common Securities and
Preferred Securities.
VOTING STOCK:
The term "Voting Stock", as applied to stock of any Person, means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
SECTION 1.02. INTERPRETATION. Each definition in this Indenture
includes the singular and the plural, and references to the neuter gender
include the masculine and feminine where appropriate. Terms which relate to
accounting matters shall be interpreted in accordance with generally accepted
accounting principles in effect from time to time. References to any statute
mean such statute as amended at the time and include any successor
legislation. The word "or" is not exclusive, and the words "herein," "hereof"
and "hereunder" refer to this Indenture as a whole. The headings to the
Articles and Sections are for convenience of reference and shall not affect
the meaning or interpretation of this Indenture. References to Articles and
Sections mean the Articles and Sections of this Indenture.
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION,
REGISTRATION AND EXCHANGE OF DEBT SECURITIES
SECTION 2.01. DESIGNATION AND TERMS OF DEBT SECURITIES. The
aggregate principal amount of Debt Securities that may be authenticated and
delivered under this Indenture is unlimited. The Debt Securities may be
issued in one or more series up to the aggregate principal amount of Debt
Securities of that series from time to time authorized by or pursuant to a
Board Resolution of the Company or pursuant to one or more indentures
supplemental hereto. Prior to the initial issuance of Debt Securities of any
series, there shall be established in or pursuant to a Board Resolution of
the Company, and set forth in
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an Officers' Certificate of the Company, or established in one or more
indentures supplemental hereto:
(1) the title of the series of Debt Security (which shall
distinguish the Debt Securities of that series from all other series of
Debt Securities);
(2) any limit upon the aggregate principal amount of the Debt
Securities of that series that may be authenticated and delivered under
this Indenture (except for Debt Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other
Debt Securities of that series);
(3) the date or dates on which the principal of the Debt Securities
of that series is payable;
(4) the rate or rates at which the Debt Securities of that series
shall bear interest or the manner of calculation of such rate or rates, if
any;
(5) the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the
manner of determination of such Interest Payment Dates and the record date
for the determination of holders to whom interest is payable on any such
Interest Payment Dates;
(6) the right, if any, to extend the interest payment periods and
the duration of such extension;
(7) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debt Securities of that
series may be redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase
Debt Securities of that series pursuant to any sinking fund or analogous
provisions (including payments made in cash in anticipation of future
sinking fund obligations) or at the option of a Holder thereof and the
period or periods within which, the price or prices at which, and the
terms and conditions upon which, Debt Securities of that series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) the subordination terms of the Debt Securities of that series;
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(10) the form of the Debt Securities of that series, including the
form of the Certificate of Authentication for such series;
(11) if other than denominations of twenty-five U.S. dollars ($25)
or any integral multiple thereof, the denominations in which the Debt
Securities of that series shall be issuable;
(12) whether and under what circumstances the Company will pay
additional amounts on the Debt Securities of the series to any Holder who
is not a United States Person (including any modification to the
definition of such term) in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have the option to redeem such
Debt Securities rather than pay such additional amounts (and the terms of
any such option);
(13) any and all other terms with respect to such series (which
terms shall not be inconsistent with the terms of this Indenture),
including any terms which may be required by or advisable under United
States laws or regulations or advisable in connection with the marketing
of Debt Securities of that series; and
(14) whether the Debt Securities are issuable as a Global Security
and, in such case, the identity of the Depositary for such series.
All Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
in or pursuant to any such Board Resolution or in any indentures supplemental
hereto.
If any of the terms of a series are established by action taken
pursuant to a Board Resolution of the Company, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate of the Company setting forth the terms
of such series.
SECTION 2.02. FORM OF DEBT SECURITIES AND TRUSTEE'S CERTIFICATE.
The Debt Securities of any series and the Trustee's certificate of
authentication to be borne by such Debt Securities shall be substantially of
the tenor and purport as set forth in one or more indentures supplemental
hereto or as provided in a Board Resolution of the Company and as set forth
in an Officers' Certificate of the Company, and may have such letters,
numbers or other marks of identification or designation and such legends or
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endorsements printed, lithographed or engraved thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Debt Securities of that series may be listed, or to conform
to usage.
SECTION 2.03. DENOMINATIONS; PROVISIONS FOR PAYMENT. The Debt
Securities shall be issuable as registered Debt Securities and in the
denominations of twenty-five U.S. dollars ($25) or any integral multiple
thereof, subject to Section 2.01(11). The Debt Securities of a particular
series shall bear interest payable on the dates and at the rate specified
with respect to that series. The principal of and the interest on the Debt
Securities of any series, as well as any premium thereon in case of
redemption thereof prior to maturity, shall be payable in the coin or
currency of the United States of America that at the time is legal tender for
public and private debt, at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, the City and State of New York.
Each Debt Security shall be dated the date of its authentication. Interest
on the Debt Securities shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The interest installment on any Debt Security that is payable, and
is punctually paid or duly provided for, on any Interest Payment Date for
Debt Securities of that series shall be paid to the Person in whose name said
Debt Security (or one or more Predecessor Debt Securities) is registered at
the close of business on the regular record date for such interest
installment. In the event that any Debt Security of a particular series or
portion thereof is called for redemption and the redemption date is
subsequent to a regular record date with respect to any Interest Payment Date
and prior to such Interest Payment Date, interest on such Debt Security will
be paid upon presentation and surrender of such Debt Security as provided in
Section 3.03.
Any interest on any Debt Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for Debt
Securities of that series (herein called "Defaulted Interest") shall
forthwith cease to be payable to the registered holder on the relevant
regular record date by virtue of having been such holder; and such Defaulted
Interest shall be paid by the Company, at its election, as provided in clause
(1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on Debt
Securities to the Persons in whose names
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such Debt Securities (or their respective Predecessor Debt Securities)
are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner: the Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each such Debt
Security and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall not be more than 15 nor less than 10
days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such special record date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the special record
date therefor to be mailed, first class postage prepaid, to each
Securityholder at the address of such Securityholder as it appears in the
Security Register (as hereinafter defined), not less than 10 days prior to
such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names such Debt Securities (or their respective Predecessor Debt
Securities) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on any
Debt Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debt Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustees of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practic
able by the Trustee.
Unless otherwise set forth in a Board Resolution of the Company or
one or more indentures supplemental hereto establishing the terms of any
series of Debt Securities pursuant to Section 2.01 hereof, the term "REGULAR
RECORD DATE" as used in this Section with respect to a series of Debt
Securities with respect to any Interest Payment Date for such series shall
mean
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either (a) the fifteenth day of the month immediately preceding the month in
which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the first
day of a month, (b) the fifteenth day of the month in which an Interest
Payment Date established for such series pursuant to Section 2.01 hereof
shall occur, if such Interest Payment Date is the last day of such month, or
(c) the last day of the month immediately preceding the month in which an
Interest Payment Date established for such series pursuant to Section 2.01
hereof shall occur, if such Interest Payment Date is the fifteenth day of a
month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Debt
Security of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Debt Security of such series shall carry
the rights to interest accrued and unpaid, and to accrue, that were carried
by such other Debt Security.
SECTION 2.04. EXECUTION AND AUTHENTICATION. The Debt Securities
shall be signed on behalf of the Company by its President or one of its Vice
Presidents, and attested by its Secretary or one of its Assistant
Secretaries. Signatures may be in the form of a manual or facsimile
signature. The Company may use the facsimile signature of any Person who
shall have been a President or Vice President thereof, or of any Person who
shall have been a Secretary or Assistant Secretary thereof, notwithstanding
the fact that at the time the Debt Securities shall be authenticated and
delivered or disposed of such Person shall have ceased to be the President or
a Vice President, or the Secretary or an Assistant Secretary, of the Company.
The seal, if any, of the Company may be in the form of a facsimile of such
seal and may be impressed, affixed, imprinted or otherwise reproduced on the
Debt Securities. The Debt Securities may contain such notations, legends or
endorsements required by law, stock exchange rule or usage. Each Debt
Security shall be dated the date of its authentication by the Trustee.
A Debt Security shall not be valid until authenticated manually by
an authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder and that
the holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Debt Securities of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company
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for the authentication and delivery of such Debt Securities, signed by its
President or any Vice President and its Treasurer or any Assistant Treasurer,
and the Trustee in accordance with such written order shall authenticate and
deliver such Debt Securities.
In authenticating such Debt Securities and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities,
the Trustee shall be entitled to receive, and (subject to Section 7.01) shall
be fully protected in relying upon, an Opinion of Counsel stating that the
form and terms thereof have been established in conformity with the
provisions of this Indenture.
The Trustee shall not be required to authenticate such Debt
Securities if the issue of such Debt Securities pursuant to this Indenture
will affect the Trustee's own rights, duties or immunities under the Debt
Securities and this Indenture or otherwise in a manner that is not reasonably
acceptable to the Trustee.
SECTION 2.05. REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Debt Securities of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for
such purpose in the Borough of Manhattan, the City and State of New York, for
other Debt Securities of such series of authorized denominations, and for a
like aggregate principal amount, upon payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, all as provided in
this Section. In respect of any Debt Securities so surrendered for exchange,
the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in exchange therefor the Debt Security or Debt
Securities of the same series that the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a
register or registers (herein referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the
Company shall register the Debt Securities and the transfers of Debt
Securities as in this Article provided and which at all reasonable times
shall be open for inspection by the Trustee. The registrar for the purpose
of registering Debt Securities and transfer of Debt Securities as herein
provided shall be appointed as authorized by Board Resolution (the "Security
Registrar").
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Upon surrender for transfer of any Debt Security at the office or
agency of the Company designated for such purpose in the Borough of
Manhattan, the City and State of New York, the Company shall execute, the
Trustee shall authenticate and such office or agency shall deliver in the
name of the transferee or transferees a new Debt Security or Debt Securities
of the same series and same aggregate principal amount as the Debt Security
presented for transfer.
All Debt Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied
(if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or
the Security Registrar, duly executed by the registered holder or by such
holder's duly authorized attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Debt Securities, or issue of new Debt Securities
in case of partial redemption of any series, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge in
relation thereto, other than exchanges pursuant to Section 2.06, Section
3.03(b) and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debt Securities of a series during a period
beginning at the opening of business 15 days before the day of the mailing of
a notice of redemption of less than all the Outstanding Debt Securities of
the same series and ending at the close of business on the day of such
mailing, nor (ii) to register the transfer of or exchange any Debt Securities
of any series or portions thereof called for redemption. The provisions of
this Section 2.05 are, with respect to any Global Security, subject to
Section 2.11 hereof.
SECTION 2.06. TEMPORARY SECURITIES. Pending the preparation of
definitive Debt Securities of any series, the Company may execute, and the
Trustee shall authenticate and deliver, temporary Debt Securities (printed,
lithographed or typewritten) of any authorized denomination. Such temporary
Debt Securities shall be substantially in the form of the definitive Debt
Securities in lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every temporary Debt
Security of any series shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Debt Securities of such series.
Without unnecessary delay the Company will execute and
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will furnish definitive Debt Securities of such series and thereupon any or
all temporary Debt Securities of such series may be surrendered in exchange
therefor (without charge to the holders), at the office or agency of the
Company designated for the purpose in the Borough of Manhattan, the City and
State of New York, and the Trustee shall authenticate and such office or
agency shall deliver in exchange for such temporary Debt Securities an equal
aggregate principal amount of definitive Debt Securities of such series,
unless the Company advises the Trustee to the effect that definitive Debt
Securities need not be executed and furnished until further notice from the
Company. Until so exchanged, the temporary Debt Securities of such series
shall be entitled to the same benefits under this Indenture as definitive
Debt Securities of such series authenticated and delivered hereunder.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN DEBT
SECURITIES. In case any temporary or definitive Debt Security shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute, and upon the Company's request the
Trustee (subject as aforesaid) shall authenticate and deliver, a new Debt
Security of the same series, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debt Security, or
in lieu of and in substitution for the Debt Security so destroyed, lost or
stolen. In every case the applicant for a substituted Debt Security shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company
and the Trustee evidence to their satisfaction of the destruction, loss or
theft of the applicant's Debt Security and of the ownership thereof. The
Trustee may authenticate any such substituted Debt Security and deliver the
same upon the written request or authorization of any officer of the Company.
Upon the issuance of any substituted Debt Security, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. In case any Debt
Security that has matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
Debt Security, pay or authorize the payment of the same (without surrender
thereof except in the case of a mutilated Debt Security) if the applicant for
such payment shall furnish to the Company and the Trustee such security or
indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and
the Trustee of the destruction, loss or theft of such Debt Security and of
the ownership thereof.
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Every replacement Debt Security issued pursuant to the provisions
of this Section shall constitute an additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Debt
Security shall be found at any time, or be enforceable by anyone, and shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Debt Securities of the same series duly issued
hereunder. All Debt Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debt
Securities, and shall preclude (to the extent lawful) any and all other
rights or remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.08. CANCELLATION. All Debt Securities surrendered for
the purpose of payment, redemption, exchange or registration of transfer
shall, if surrendered to the Company or any paying agent, be delivered to the
Trustee for cancellation, or, if surrendered to the Trustee, shall be
cancelled by it, and no Debt Securities shall be issued in lieu thereof
except as expressly required or permitted by any of the provisions of this
Indenture. On request of the Company at the time of such surrender, the
Trustee shall deliver to the Company canceled Debt Securities held by the
Trustee. In the absence of such request the Trustee may dispose of canceled
Debt Securities in accordance with its standard procedures and deliver a
certificate of disposition to the Company. If the Company shall otherwise
acquire any of the Debt Securities, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by
such Debt Securities unless and until the same are delivered to the Trustee
for cancellation.
SECTION 2.09. BENEFITS OF INDENTURE. Nothing in this Indenture or
in the Debt Securities, express or implied, shall give or be construed to
give to any Person, other than the parties hereto and the holders of the Debt
Securities (and, with respect to the provisions of Article XIV, the holders
of any indebtedness to which the Debt Securities are subordinated) any legal
or equitable right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Debt Securities (and, with respect
to the provisions of Article XIV, the holders of any indebtedness to which
the Debt Securities are subordinated).
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SECTION 2.10. AUTHENTICATING AGENT. So long as any Debt
Securities of any series remain Outstanding, there may be an Authenticating
Agent for any or all such series of Debt Securities which the Trustee shall
have the right to appoint. Said Authenticating Agent shall be authorized to
act on behalf of the Trustee to authenticate Debt Securities of such series
issued upon exchange, transfer or partial redemption thereof, and Debt
Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. All references in this Indenture to
the authentication of Debt Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a
trust business, and that is otherwise authorized under such laws to conduct
such business and is subject to supervision or examination by federal or
state authorities. If at any time any Authenticating Agent shall cease to be
eligible in accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. GLOBAL SECURITIES. (a) If the Company shall
establish pursuant to Section 2.01 that the Debt Securities of a particular
series are to be issued as a Global Security or Securities, then the Company
shall execute and the Trustee shall, in accordance with Section 2.04,
authenticate and deliver, a Global Security that (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
all of the Outstanding Debt Securities of such series, (ii) shall be
registered in the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following
effect: "Except as otherwise provided in Section 2.11 of the Indenture, this
Debt
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Security may be transferred, in whole but not in part, only to another
nominee of the Depositary or to a successor Depositary or to a nominee of
such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global
Security or Securities of a series may be transferred, in whole but not in
part and in the manner provided in Section 2.05, only to another nominee of
the Depositary for such series, or to a successor Depositary for such series
selected or approved by the Company or to a nominee of such successor
Depositary.
(c) If at any time the Depositary for a series of Debt Securities
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no
longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, at a time when the Depositary is required
to be so registered to act as such Depositary and a successor Depositary for
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be,
this Section 2.11 shall no longer be applicable to the Debt Securities of
such series and the Company will execute, and subject to Section 2.05, the
Trustee will authenticate and deliver the Debt Securities of such series in
definitive registered form without coupons, in authorized denominations, and
in an aggregate principal amount equal to the principal amount of the Global
Security or Securities of such series in exchange for such Global Security or
Securities. In addition, the Company may at any time determine that the Debt
Securities of any series shall no longer be represented by a Global Security
or Securities and that the provisions of this Section 2.11 shall no longer
apply to the Debt Securities of such series. In such event, the Company will
execute and, subject to Section 2.05, the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Company, will
authenticate and deliver the Debt Securities of such series in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities of such series in exchange for such Global Security or
Securities. Upon the exchange of the Global Security or Securities for such
Debt Securities in definitive registered form without coupons, in authorized
denominations, the Global Security or Securities shall be canceled by the
Trustee. Such Debt Securities in definitive registered form issued in
exchange for the Global Security or Securities pursuant to this Section
2.11(c) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Depositary for
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delivery to the Persons in whose names such Debt Securities are
so registered.
ARTICLE III
REDEMPTION OF DEBT SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. REDEMPTION. The Company may redeem the Debt
Securities of any series issued hereunder on and after the dates and in
accordance with the terms established for such series pursuant to Section 2.01
hereof.
SECTION 3.02. NOTICE OF REDEMPTION. (a) In case the Company shall
desire to exercise such right to redeem all or, as the case may be, a portion
of the Debt Securities of any series in accordance with the right reserved so
to do, the Company shall, or shall cause the Trustee to, give notice of such
redemption to holders of the Debt Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption of that
series to such holders at their last addresses as they shall appear upon the
Security Register unless a shorter period is specified in the Debt Securities
to be redeemed. Any notice that is mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the registered
holder receives the notice. In any case, failure duly to give such notice to
the holder of any Debt Security of any series designated for redemption in
whole or in part, or any defect in such notice, shall not affect the validity
of the proceedings for the redemption of any other Debt Securities of such
series or any other series. In the case of any redemption of Debt Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Debt Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
any such restriction.
Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Debt Securities of that series are
to be redeemed, and shall state that payment of the redemption price of such
Debt Securities to be redeemed will be made at the office or agency of the
Company in the Borough of Manhattan, the City and State of New York, upon
presentation and surrender of such Debt Securities, that interest accrued to
the date fixed for redemption will be paid as specified in said notice, that
from and after said date interest will cease to accrue and that the redemption
is for a sinking fund, if such is the case. If less than all the Debt
Securities
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of a series are to be redeemed, the notice to the holders of Debt Securities
of that series to be redeemed in whole or in part shall specify the
particular Debt Securities to be so redeemed. In case any Debt Security is
to be redeemed in part only, the notice that relates to such Debt Security
shall state the portion of the principal amount thereof to be redeemed, and
shall state that on and after the redemption date, upon surrender of such
Debt Security, a new Debt Security or Debt Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.
(b) If less than all the Debt Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days' notice in
advance of the date fixed for redemption as to the aggregate principal amount
of Debt Securities of the series to be redeemed, and thereupon the Trustee
shall select, by lot or in such other manner as it shall deem appropriate and
fair in its discretion and that may provide for the selection of a portion or
portions (equal to twenty-five U.S. dollars ($25) or any integral multiple
thereof) of the principal amount of such Debt Securities of a denomination
larger than $25, the Debt Securities to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debt Securities to
be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the Debt
Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to be given by
the Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as
the case may be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
SECTION 3.03. PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed
as above provided, the Debt Securities or portions of Debt Securities of the
series to be redeemed specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption and
interest on such Debt Securities or portions of Debt
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Securities shall cease to accrue on and after the date fixed for redemption,
unless the Company shall default in the payment of such redemption price and
accrued interest with respect to any such Debt Security or portion thereof.
On presentation and surrender of such Debt Securities on or after the date
fixed for redemption at the place of payment specified in the notice, said
Debt Securities shall be paid and redeemed at the applicable redemption price
for such series, together with interest accrued thereon to the date fixed for
redemption (but if the date fixed for redemption is an interest payment date,
the interest installment payable on such date shall be payable to the
registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Debt Security of such series that is to
be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debt Security is presented
shall deliver to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of the same series, of authorized denominations in
principal amount equal to the unredeemed portion of the Debt Security so
presented.
SECTION 3.04. SINKING FUND. The provisions of Sections 3.04, 3.05
and 3.06 shall be applicable to any sinking fund for the retirement of Debt
Securities of a series, except as otherwise specified as contemplated by
Section 2.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "MANDATORY
SINKING FUND PAYMENT," and any payment in excess of such minimum amount
provided for by the terms of Debt Securities of any series is herein referred
to as an "OPTIONAL SINKING FUND PAYMENT". If provided for by the terms of Debt
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.05. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
SECTION 3.05. SATISFACTION OF SINKING FUND PAYMENTS WITH DEBT
SECURITIES. The Company (i) may deliver Outstanding Debt Securities of a
series (other than any Debt Securities previously called for redemption) and
(ii) may apply as a credit Debt Securities of a series that have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of
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any sinking fund payment with respect to the Debt Securities of such series
required to be made pursuant to the terms of such Debt Securities as provided
for by the terms of such series, PROVIDED that such Debt Securities have not
been previously so credited. Such Debt Securities shall be received and
credited for such purpose by the Trustee at the redemption price specified in
such Debt Securities for redemption through operation of the sinking fund and
the amount of such sinking fund payment shall be reduced accordingly.
SECTION 3.06. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not
less than 45 days prior to each sinking fund payment date for any series of
Debt Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of such series, the portion thereof, if any,
that is to be satisfied by delivering and crediting Debt Securities of that
series pursuant to Section 3.05 and the basis for such credit and will,
together with such Officers' Certificate, deliver to the Trustee any Debt
Securities to be so delivered. Not less than 30 days before each such sinking
fund payment date, the Trustee shall select the Debt Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 3.02 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 3.02. Such notice
having been duly given, the redemption of such Debt Securities shall be made
upon the terms and in the manner stated in Section 3.03.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The
Company will duly and punctually pay or cause to be paid the principal of (and
premium, if any) and interest on the Debt Securities of each series at the time
and place and in the manner provided herein and established with respect to
such Debt Securities.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. So long as any
series of the Debt Securities remain Outstanding, the Company agrees to
maintain an office or agency in the Borough of Manhattan, the City and State of
New York, with respect to each such series and at such other location or loca-
tions as may be designated as provided in this Section 4.02, where (i) Debt
Securities of such series may be presented for payment, (ii) Debt
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Securities of such series may be presented as hereinabove authorized for
registration of transfer and exchange, and (iii) notices and demands to or
upon the Company in respect of the Debt Securities of such series and this
Indenture may be given or served, such designation to continue with respect
to such office or agency until the Company shall, by written notice signed by
its President or a Vice President and delivered to the trustee, designate
some other office or agency for such purposes or any of them. If at any time
the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee as
its agent to receive all such presentations, notices and demands.
SECTION 4.03. PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for all
or any series of the Debt Securities, other than the Trustee, the Company will
cause each such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the Debt
Securities of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Debt Securities) in trust for the
benefit of the Persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company to make any payment of the principal of (and premium, if any) or
interest on the Debt Securities of that series when the same shall be due
and payable;
(3) that it will, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(2) above, upon the written
request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
any series of the Debt Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on Debt Securities of that
series, set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto
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a sum sufficient to pay such principal (and premium, if any) or interest so
becoming due on Debt Securities of that series until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of such action, or any failure by it to take such action.
Whenever the Company shall have one or more paying agents for any series of
Debt Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on any Debt Securities of that series, deposit
with the paying agent a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of such deposit or failure so to deposit.
(c) Notwithstanding anything in this Section to the contrary, (i)
the agreement to hold sums in trust as provided in this Section is subject to
the provisions of Section 11.05, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the Trustee all
sums held in trust by the Company or such paying agent, such sums to be held by
the Trustee upon the same terms and conditions as those upon which such sums
were held by the Company or such paying agent; and, upon such payment by any
paying agent to the Trustee, such paying agent shall be released from all
further liability with respect to such money.
SECTION 4.04. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. The
Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 4.05. COMPLIANCE WITH CONSOLIDATION PROVISIONS. The Company
will not, while any of the Debt Securities remain Outstanding, consolidate
with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article X hereof are complied with.
SECTION 4.06. LIMITATION ON DIVIDENDS.
(a) If Debt Securities are issued to a Trust or a trustee of such
Trust in connection with the issuance of Preferred Securities by such Trust and
(i) there shall have occurred any event that would constitute an Event of
Default or (ii) the Company shall be in default with respect to its payment or
any obligations under the Preferred Securities Guarantee
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relating to such Preferred Securities, then (x) the Company shall not declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase or make a liquidation payment with respect to, any of its capital
stock (other than (A) purchases or acquisitions of shares of Company common
stock in connection with the satisfaction by the Company of its obligations
under any employee benefit plans or any other contractual obligations of the
Company, other than a contractual obligation ranking PARI PASSU with or
junior to the Debt Securities), (B) as a result of a reclassification of
Company capital stock or the exchange or conversion of one class or series of
Company capital stock for another class or series of Company capital stock,
or (C) the purchase of fractional interests in shares of Company capital
stock pursuant to the conversion or exchange provisions of such Company
capital stock or the security being converted or exchanged), (y) the Company
shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities (including guarantees) issued
by the Company which rank PARI PASSU with or junior to such Debt Securities
and (z) the Company shall not make guarantee payments with respect to the
foregoing (other than pursuant to Preferred Securities Guarantees).
(b) If Debt Securities are issued to a Trust or a trustee of such
Trust in connection with the issuance of Trust Securities by such Trust and
the Company shall have given notice of its election to defer payments of
interest on such Debt Securities by extending the interest payment period as
provided in any indenture supplemental hereto and such period, or any
extension thereof, shall be continuing, then (i) the Company shall not
declare or pay any dividend, or make any distributions with respect to, or
redeem, purchase or acquire or make a liquidation payment with respect to,
any of its capital stock (other than (A) purchases or acquisitions of shares
of Company common stock in connection with the satisfaction by the Company of
its obligations under any employee benefit plans or any other contractual
obligations of the Company, other than a contractual obligation ranking PARI
PASSU with or junior to the Debt Securities) (B) as a result of a
reclassification of Company capital stock or the exchange or conversion of
one class or series of Company capital stock for another class or series of
Company capital stock, or (C) the purchase of fractional interests in shares
of Company capital stock pursuant to the conversion or exchange provisions of
such Company capital stock or the security being converted or exchanged),
(ii) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company which rank PARI PASSU with or
junior to such Debt Securities and (iii) the Company shall not make any
guarantee payments with respect to the
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foregoing (other than pursuant to Preferred Securities Guarantees).
SECTION 4.07. COVENANTS AS TO TRUST. In the event Debt Securities
are issued and sold to a Trust in connection with the issuance of Trust
Securities by such Trust, for so long as such Trust Securities remain
outstanding, the Company will (i) maintain 100% direct or indirect ownership of
the Common Securities of such Trust; PROVIDED, HOWEVER, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of such Common Securities, (ii) not cause, as sponsor of such Trust,
or permit, as holder of Common Securities of such Trust, the dissolution,
winding-up or termination of such trust, except in connection with a
distribution of Debt Securities as provided in the Declaration and in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration and (iii) use its reasonable efforts to cause such Trust (a) to
remain a business trust, except in connection with a distribution of Debt
Securities to the holders of Trust Securities in liquidation of such Trust, the
redemption of all of the Trust Securities of such Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of such
Trust, and (b) to otherwise continue to be classified for United States federal
income tax purposes as a grantor trust.
SECTION 4.08. CORPORATE EXISTENCE. The Company will, subject to the
provisions of Article X, at all times maintain its corporate existence and
right to carry on business and will duly procure all renewals and extensions
thereof, and, to the extent necessary or desirable in the operation of its
business, will use its best efforts to maintain, preserve and renew all of its
rights, powers, privileges and material franchises.
ARTICLE V
SECURITYHOLDERS, LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 5.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee (a) on a quarterly basis on each regular record date (as defined in
Section 2.03) a list, in such form as the Trustee may reasonably require, of
the names and addresses of the holders of each series of Debt Securities as of
such regular record date, PROVIDED that the Company shall not be obligated to
furnish or cause to be furnished such list at any time that such list shall not
differ in any respect from the most
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recent list furnished to the Trustee by the Company and (b) at such other
times as the Trustee may request in writing within 30 days after the receipt
by the Company of any such request, a list of similar form and content as of
a date not more than 15 days prior to the time such list is furnished;
PROVIDED, HOWEVER, that in either case, no such list need be furnished for
any series of Debt Securities for which the Trustee shall be the Security
Registrar.
SECTION 5.02. PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debt Securities contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of Debt
Securities received by the Trustee in its capacity as Security Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Debt Securities.
SECTION 5.03. REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the Trustee,
within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
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(b) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first
class postage prepaid, or reputable overnight delivery service that provides
for evidence of receipt, to the Securityholders, as their names and addresses
appear upon the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
as may be required by rules and regulations prescribed from time to time by the
Commission.
SECTION 5.04. REPORTS BY THE TRUSTEE.
(a) Within 60 days after May 1 of each year in which any of the Debt
Securities are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear
upon the Security Register, a brief report dated as of the preceding May 15, if
and to the extent required under Section 313(a) of the Trust Indenture Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Debt Securities are listed (if so listed)
and also with the Commission. The Company agrees to notify the Trustee when
any Debt Securities become listed on any stock exchange.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT.
(a) Whenever used herein with respect to Debt Securities of a
particular series, "Event of Default" means any
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one or more of the following events that has occurred and is continuing:
(1) the Company defaults in the payment of any installment of
interest upon any of the Debt Securities of that series, as and when the
same shall become due and payable, and continuance of such default for a
period of 30 days; PROVIDED, HOWEVER, that a valid extension of an
interest payment period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in the
payment of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any of the Debt Securities of that series as and when
the same shall become due and payable whether at maturity, upon
redemption, by declaration or otherwise, or in any payment required by any
sinking or analogous fund established with respect to that series;
(3) the Company fails to observe or perform any other of its
covenants or agreements with respect to that series contained in this
Indenture or otherwise established with respect to that series of Debt
Securities pursuant to Section 2.01 hereof (other than a covenant or
agreement that has been expressly included in this Indenture solely for
the benefit of one or more series of Debt Securities other than such
series) for a period of 90 days after the date on which written notice of
such failure, requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been given to the
Company by the Trustee, by registered or certified mail, or to the Company
and the Trustee by the holders of at least 25% in principal amount of the
Debt Securities of that series at the time Outstanding;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law (i) commences a voluntary case, (ii) consents to the entry of an order
for relief against it in an involuntary case, (iii) consents to the
appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its
creditors;
(5) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company for all or
substantially all of its property, or
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(iii) orders the liquidation of the Company, and the order or decree
remains unstayed and in effect for 90 days; or
(6) in the event Debt Securities are issued and sold to a Trust of
the Company in connection with the issuance of Trust Securities by such
Trust, such Trust shall have voluntarily or involuntarily dissolved, wound-
up its business or otherwise terminated its existence except in connection
with (i) the distribution of Debt Securities to holders of Trust
Securities in liquidation of their interests in such Trust, (ii) the
redemption of all outstanding Trust Securities of such Trust, and (iii)
mergers, consolidations or amalgamations, each as permitted by the
Declaration of such Trust.
(b) If an Event of Default described in clauses 1, 2, 3 or 6 of
Section 6.01(a) with respect to Debt Securities of any series at the time
outstanding occurs and is continuing, unless the principal of all the Debt
Securities of that series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of
the Debt Securities of that series then Outstanding hereunder, by notice in
writing to the Company (and to the Trustee, if given by such Securityholders),
may declare the principal of all the Debt Securities of that series to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, notwithstanding anything contained in
this Indenture or in the Debt Securities of that series or established with
respect to that series pursuant to Section 2.01 to the contrary. If an Event
of Default specified in clause (4) or (5) of Section 6.01(a) occurs or is
continuing, then the principal amount of all the Debt Securities shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholder.
(c) At any time after the principal of the Debt Securities of that
series shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount
of the Debt Securities of that series then Outstanding hereunder, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if: (i) the Company has paid or deposited with the Trustee
a sum sufficient to pay all matured installments of interest upon all the Debt
Securities of that series and the principal of (and premium, if any, on) any
and all Debt Securities of that series that shall have become due otherwise
than by acceleration (with interest upon such principal and premium, if any,
and, to the extent that such payment is enforceable under applicable law, upon
overdue installments of
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interest, at the rate per annum expressed in the Debt Securities of that
series to the date of such payment or deposit) and the amount payable to the
Trustee under Section 7.06, and (ii) any and all Events of Default under the
Indenture with respect to such series, other than the nonpayment of principal
on Debt Securities of that series that shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06.
No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right
with respect to Debt Securities of that series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company and the
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company and the Trustee
shall continue as though no such proceedings had been taken.
SECTION 6.02. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Debt Securities of a
series, or any payment required by any sinking or analogous fund established
with respect to that series as and when the same shall have become due and
payable, and such default shall have continued for a period of 90 days, or (2)
in case it shall default in the payment of the principal of (or premium, if
any, on) any of the Debt Securities of a series when the same shall have become
due and payable, whether upon maturity of the Debt Securities of a series or
upon redemption or upon declaration or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Debt Securities of that series, the whole amount that then shall have
become due and payable on all such Debt Securities for principal (and premium,
if any) or interest, or both, as the case may be, with interest upon the
overdue principal (and premium, if any) and (to the extent that payment of such
interest is enforceable under applicable law and, if the Debt Securities are
held by a Trust, without duplication of any other amounts paid by such Trust in
respect thereof) upon overdue installments of interest at the rate per annum
expressed in the Debt Securities of that series; and, in addition thereto, such
further amount as
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shall be sufficient to cover the costs and expenses of collection and the
amount payable to the Trustee under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or other obligor
upon the Debt Securities of that series and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company or other obligor upon the Securities of that series, wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company or its creditors or property, the Trustee
shall have power to intervene in such proceedings and take any action therein
that may be permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of Debt Securities of such series allowed for the
entire amount due and payable by the Company under this Indenture at the date
of institution of such proceedings and for any additional amount that may
become due and payable by the Company after such date, and to collect and
receive any moneys or other property payable or deliverable on any such claim,
and to distribute the same after the deduction of the amount payable to the
Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the holders of Debt
Securities of such series to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
such Securityholders, to pay to the Trustee any amount due it under Section
7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debt
Securities of that series, may be enforced by the Trustee without the
possession of any of such Debt Securities, or the production thereof at any
trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for payment
to the Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Debt Securities of such series.
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In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.]
SECTION 6.03. APPLICATION OF MONEYS COLLECTED. Any moneys collected
by the Trustee pursuant to this Article with respect to a particular series of
Debt Securities shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such moneys on account
of principal (or premium, if any) or interest, upon presentation of the Debt
Securities of that series, and notation thereon of the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of all indebtedness to which the Debt
Securities are subordinated if and to the extent required by Article XIV;
and
THIRD: To the payment of the amounts then due and unpaid upon Debt
Securities of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Debt Securities for
principal (and premium, if any) and interest, respectively.
SECTION 6.04. LIMITATION ON SUITS. No holder of any Debt Security
of any series shall have any right by virtue or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or
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with respect to this Indenture or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless (i) such holder previously
shall have given to the Trustee written notice of an Event of Default and of
the continuance thereof with respect to the Debt Securities of such series
specifying such Event of Default, as herein provided; (ii) the holders of not
less than 25% in aggregate principal amount of the Debt Securities of such
series then Outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as trustee
hereunder; (iii) such holder or holders shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; and (iv) the Trustee for 60
days after its receipt of such notice, request and offer of indemnity, shall
have failed to institute any such action, suit or proceeding; and (v) during
such 60 day period, the holders of a majority in principal amount of the Debt
Securities of that series do not give the Trustee a direction inconsistent
with the request.
Notwithstanding anything contained herein to the contrary, any other
provisions of this Indenture, the right of any holder of any Debt Security to
receive payment of the principal of (and premium, if any) and interest on such
Debt Security, as therein provided, on or after the respective due dates
expressed in such Debt Security (or in the case of redemption, on the
redemption date), or to institute suit for the enforcement of any such payment
on or after such respective dates or redemption date, shall not be impaired or
affected without the consent of such holder, and by accepting a Debt Security
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Debt Security of such series with every other such taker and
holder and the Trustee, that no one or more holders of Debt Securities of such
series shall have any right in any manner whatsoever by virtue or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights
of the holders of any other of such Debt Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Debt Securities of such
series. For the protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
SECTION 6.05. RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.
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(a) Except as otherwise provided in Section 2.07, all powers and
remedies given by this Article to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debt Securities.
(b) No delay or omission of the Trustee or of any holder of any of
the Debt Securities to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article or by law to the Trustee or the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.
SECTION 6.06. CONTROL BY SECURITYHOLDERS. The holders of a majority
in aggregate principal amount of the Debt Securities of any series at the time
Outstanding, determined in accordance with Section 8.04, shall have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to such series; PROVIDED, HOWEVER, that such direction
shall not be in conflict with any rule of law or with this Indenture or be
unduly prejudicial to the rights of holders of Debt Securities of any other
series at the time Outstanding determined in accordance with Section 8.04.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding
so directed would involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding affected thereby, determined in accordance with Section
8.04, may on behalf of the holders of all of the Debt Securities of such series
waive any past default in the performance of any of the covenants contained
herein or established pursuant to Section 2.01 with respect to such series and
its consequences, except (i) a default in the payment of the principal of, or
premium, if any, or interest on, any of the Debt Securities of that series as
and when the same shall become due by the terms of such Debt Securities
otherwise than by acceleration (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal and any
premium has been deposited with the Trustee (in
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accordance with Section 6.01(c)) or (ii) a default in the covenants contained
in Section 4.06(b). Upon any such waiver, the default covered thereby shall
be deemed to be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debt Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 6.07. UNDERTAKING TO PAY COSTS. All parties to this
Indenture agree, and each holder of any Debt Securities by such holder's
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken
or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series, on or after
the respective due dates expressed in such Debt Security or established
pursuant to this Indenture.
SECTION 6.08. ACKNOWLEDGEMENT REGARDING PREFERRED SECURITIES
HOLDERS. The Company acknowledges that, with respect to any Debt Securities
held by a Trust or a trustee of such Trust, if the Property Trustee of such
Trust fails to enforce its rights under this Indenture as the holder of the
series of Debt Securities held as the assets of such Trust, then holders of
Preferred Securities of such Trust may institute legal proceedings directly
against the Company to enforce such rights under this Indenture without first
instituting any legal proceedings against such Property Trustee or any other
Person.
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ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of Default with
respect to the Debt Securities of a series and after the curing of all Events
of Default with respect to the Debt Securities of that series that may have
occurred, shall undertake to perform with respect to the Debt Securities of
such series such duties and only such duties as are specifically set forth in
this Indenture, and no implied covenants shall be read into this Indenture
against the Trustee. In case an Event of Default with respect to the Debt
Securities of a series has occurred (that has not been cured or waived), the
Trustee shall exercise with respect to Debt Securities of that series such of
the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect to the
Debt Securities of a series and after the curing or waiving of all such Events
of Default with respect to that series that may have occurred:
(i) the duties and obligations of the Trustee shall with respect to
the Debt Securities of such series be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with
respect to the Debt Securities of such series except for the performance
of such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Debt Securities of such series
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
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opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirement of
this Indenture;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the holders of not less than a majority in principal amount of the Debt
Securities of any series at the time Outstanding relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee under this
Indenture with respect to the Debt Securities of that series; and
(4) None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing
that the repayment of such funds or liability is not reasonably assured to it
under the terms of this Indenture or adequate indemnity against such risk is
not reasonably assured to it.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise
provided in Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval, bond,
security or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President, or any Vice President and
by the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein).
(c) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel with
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respect to legal matters shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel.
(d) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, provided that nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to a series of the Debt
Securities (that has not been cured or waived) to exercise with respect to
Debt Securities of that series such of the rights and powers vested in it by
this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
(f) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, bond, security, or other papers or documents, unless requested in
writing so to do by the holders of not less than a majority in principal
amount of the Outstanding Debt Securities of the particular series affected
thereby (determined as provided in Section 8.04); provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such costs, expenses or liabilities as a
condition to so proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Trustee, shall be repaid by
the Company upon demand.
(g) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not
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be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
(h) Whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad faith
on its part, request and rely upon an Officers' Certificate.
SECTION 7.03. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
DEBT SECURITIES.
(a) The recitals contained herein and in the Debt Securities shall
be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debt Securities or of the proceeds
of such Debt Securities, or for the use or application of any moneys paid
over by the Trustee in accordance with any provision of this Indenture or
established pursuant to Section 2.01, or for the use or application of any
moneys received by any paying agent other than the Trustee.
SECTION 7.04. MAY HOLD DEBT SECURITIES. The Trustee or any paying
agent or Security Registrar, in its individual or any other capacity, may
become the owner or pledgee of Debt Securities with the same rights it would
have if it were not Trustee, paying agent or Security Registrar.
SECTION 7.05. MONEYS HELD IN TRUST. Subject to the provisions of
Section 11.05, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest
on any moneys received by it hereunder except such as it may agree with the
Company to pay thereon.
SECTION 7.06. COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee, and
the Trustee shall be entitled to, such reasonable compensation (which shall
not be limited by any provision of law
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in regard to the compensation of a trustee of an express trust), as the
Company and the Trustee may from time to time agree in writing, for all
services rendered by it in the execution of the trusts hereby created and in
the exercise and performance of any of the powers and duties hereunder of the
Trustee, and, except as otherwise expressly provided herein, the Company will
pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
Persons not regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this Indenture, including the costs and expenses of defending itself against
any claim of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture.
Such additional indebtedness shall be secured by a lien prior to that of the
Debt Securities upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the holders of
particular Debt Securities.
SECTION 7.07. RELIANCE ON OFFICERS' CERTIFICATE. Except as
otherwise provided in Section 7.01, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, such matter (unless other evidence in
respect thereof is herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to
the Trustee and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted to be taken by it under the provisions of
this Indenture upon the faith thereof.
SECTION 7.08. QUALIFICATION; CONFLICTING INTERESTS. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act,
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the Trustee and the Company shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 7.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There
shall at all times be a Trustee with respect to the Debt Securities issued
hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with the
Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section
7.10.
SECTION 7.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any
time resign with respect to the Debt Securities of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security Register.
Upon receiving such notice of resignation, the Company shall promptly appoint
a successor Trustee with respect to the Debt Securities of such series by
written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee
with respect to the Debt Securities of such series, or any Securityholder of
that series who has been a bona fide holder of a Debt Security or Debt
Securities for at least six months may, subject to the provisions of Section
6.08, on behalf of that holder and all others similarly situated,
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petition any such court for the appointment of a successor Trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, appoint a successor Trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.10 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.09 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee with respect to
all Debt Securities and appoint a successor Trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor Trustee, or, subject to the provisions of Section 6.08, unless the
Trustee's duty to resign is stayed as provided herein, any Securityholder who
has been a bona fide holder of a Debt Security or Debt Securities for at
least six months may, on behalf of that holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor Trustee.
(c) The holders of a majority in aggregate principal amount of the
Debt Securities of any series at the time Outstanding may at any time remove
the Trustee with respect to such series by so notifying the Trustee and the
Company and may appoint a successor Trustee for such series with the consent
of the Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee with respect to the Debt
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Securities of a series pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the successor
Trustee as provided in Section 7.11.
(e) Any successor Trustee appointed pursuant to this Section may
be appointed with respect to the Debt Securities of one or more series or all
of such series, and at any time there shall be only one Trustee with respect
to the Debt Securities of any particular series.
SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Debt Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the rights, powers, and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Debt Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Debt Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Debt Securities of that or those series to which the
appointment of such successor Trustee relates, (2) shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3)
shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust, that each such
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Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee and
that no Trustee shall be responsible for any act or failure to act on the
part of any other Trustee hereunder; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein, such retiring
Trustee shall with respect to the Debt Securities of that or those series to
which the appointment of such successor Trustee relates have no further
responsibility for the exercise of rights and powers or for the performance
of the duties and obligations vested in the Trustee under this Indenture, and
each such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debt Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request
of the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money held by
such retiring Trustee hereunder with respect to the Debt Securities of that
or those series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
(e) Upon acceptance of appointment by a successor Trustee as
provided in this Section, the Company shall transmit notice of the succession
of such Trustee hereunder by mail, first class postage prepaid, to the
Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after
acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be transmitted at the expense of the Company.
SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the
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Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding. In case any Debt
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Debt
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Debt Securities.
SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY. The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
ARTICLE VIII
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in
this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Debt Securities of a
particular series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action the
holders of such majority or specified percentage of that series have joined
therein may be evidenced by any instrument or any number of instruments of
similar tenor executed by such holders of Debt Securities of that series in
person or by agent or proxy appointed in writing.
If the Company shall solicit from the holders of any series of Debt
Securities any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such series for the
determination of holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the
holders of record at the close of
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business on the record date shall be deemed to be Securityholders for the
purposes of determining whether Securityholders of the requisite proportion
of Outstanding Debt Securities of that series have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Outstanding Debt Securities
of that series shall be computed as of the record date; PROVIDED, HOWEVER,
that no such authorization, agreement or consent by such Securityholders on
the record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after
the record date.
SECTION 8.02. PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to
the provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or the agent or
proxy of such Securityholder and proof of the holding by any Person of any of
the Debt Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Debt Securities shall be proved by the Security
Register of such Debt Securities or by a certificate of the Security
Registrar thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 8.03. WHO MAY BE DEEMED OWNERS. Prior to the due
presentment for registration of transfer of any Debt Security, the Company,
the Trustee, any paying agent and any Security Registrar may deem and treat
the Person in whose name such Debt Security shall be registered upon the
books of the Company as the absolute owner of such Debt Security (whether or
not such Debt Security shall be overdue and notwithstanding any notice of
ownership or writing thereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and (subject to Section 2.03) interest on such
Debt Security and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Security Registrar shall be affected by
any notice to the contrary.
SECTION 8.04. CERTAIN DEBT SECURITIES OWNED BY COMPANY
DISREGARDED. In determining whether the holders of the requisite
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aggregate principal amount of Debt Securities of a particular series have
concurred in any direction, consent or waiver under this Indenture, the Debt
Securities of that series that are owned by the Company or any other obligor
on the Debt Securities of that series or by any Person directly or indirectly
controlling or controlled by or under common control with the Company or any
other obligor on the Debt Securities of that series shall be disregarded and
deemed not to be outstanding for the purpose of any such determination,
except that for the purpose of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only Debt
Securities of such series that the Trustee actually knows are so owned shall
be so disregarded. The Debt Securities so owned that have been pledged in
good faith may be regarded as outstanding for the purposes of this Section,
if the pledgee shall establish to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and that the
pledgee is not a Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
SECTION 8.05. ACTIONS BINDING ON FUTURE SECURITYHOLDERS. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the holders of a majority or
specified percentage in aggregate principal amount of the Debt Securities of
a particular series in connection with such action, any holder of a Debt
Security of that series that is shown by the evidence to be included in the
Debt Securities the holders of which have consented to such action may, by
filing written notice with the Trustee, and upon proof of holding as provided
in Section 8.02, revoke such action so far as concerns such Debt Security.
Except as aforesaid, any such action taken by the holder of any Debt Security
shall be conclusive and binding upon such holder and upon all future holders
and owners of such Debt Security, and of any Debt Security issued in exchange
therefor, on registration of transfer thereof or in place thereof,
irrespective of whether or not any notation in regard thereto is made upon
such Debt Security. Any action taken by the holders of a majority or
specified percentage in aggregate principal amount of the Debt Securities of
a particular series in connection with such action shall be conclusively
binding upon the Company, the Trustee and the holders of all the Debt
Securities of that series.
ARTICLE IX
SUPPLEMENTAL INDENTURES
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SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS. In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company and the Guarantor and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect), without the consent of the Securityholders,
for one or more of the following purposes:
(a) to cure any ambiguity, defect or inconsistency herein or in the
Debt Securities of any series;
(b) to comply with Article X;
(c) to provide for uncertificated Debt Securities in addition to or
in place of certificated Debt Securities;
(d) to add to the covenants of the Company for the benefit of the
holders of all or any series of Debt Securities (and if such covenants are
to be for the benefit of less than all series of Debt Securities, stating
that such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon the
Company;
(e) to add to, delete from, or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Debt Securities, as herein set forth;
(f) to make any change that does not adversely affect the rights of
any Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form and terms
and conditions of the Debt Securities of any series as provided in Section
2.01, to establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or any series of Debt Securities,
or to add to the rights of the holders of any series of Debt Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Debt Securities at the time Outstanding
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. With the consent (evidenced as provided in Section 8.01) of
the holders of not less than a majority in aggregate principal amount of the
Debt Securities of each series affected by such supplemental indenture or
indentures at the time Outstanding, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner not covered by Section 9.01 the rights of the holders of the
Debt Securities of such series under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the holders of
each Debt Security then Outstanding and affected thereby, (i) extend the
fixed maturity of any Debt Securities of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, without
the consent of the holder of each Debt Security so affected or (ii) reduce
the aforesaid percentage of Debt Securities, the holders of which are
required to consent to any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders of
any series affected thereby under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article or of Section 10.01, this Indenture shall, with respect to such
series, be and be deemed to be modified and amended in accordance therewith
and the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the holders
of Debt Securities of the series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
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SECTION 9.04. DEBT SECURITIES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debt Securities of any series affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debt Securities of that series so modified as to conform, in
the opinion of the Board of Directors of the Company, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
by the Company, authenticated by the Trustee and delivered in exchange for
the Debt Securities of that series then outstanding.
SECTION 9.05. EXECUTION OF SUPPLEMENTAL INDENTURES. Upon the
request of the Company, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Securityholders required to consent
thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise, in which case the Trustee may in its discretion but shall not
be obligated to enter into such supplemental indenture. The Trustee, subject
to the provisions of Section 7.01, may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article is authorized or permitted by, and conforms to, the terms of this
Article and that it is proper for the Trustee under the provisions of this
Article to join in the execution thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice,
setting forth in general terms the substance of such supplemental indenture,
to the Securityholders of all series affected thereby as their names and
addresses appear upon the Debt Security Register. Any failure of the Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
ARTICLE X
SUCCESSOR CORPORATION
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SECTION 10.01. COMPANY MAY CONSOLIDATE, ETC. Nothing contained in
this Indenture or in any of the Debt Securities shall prevent any
consolidation or merger of the Company with or into any other Person or
Persons (whether or not affiliated with the Company), or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any sale, conveyance, transfer
or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other
Person (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same provided that (a) any
Person formed in such consolidation or into which the Company is merged or to
which the Company has sold, conveyed, transferred or otherwise disposed of
its properties as an entirety or substantially as an entirety is an entity
validly existing under the laws of the jurisdiction of its organization and
such Person assumes the Company's obligations under this Indenture and (b)
immediately after giving effect to the transaction no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing; PROVIDED, FURTHER, the
Company hereby covenants and agrees that, upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment of the principal of (premium, if any) and interest on all of the Debt
Securities of all series in accordance with the terms of each series,
according to their tenor and the due and punctual performance and observance
of all the covenants and conditions of this Indenture with respect to each
series or established with respect to such series pursuant to Section 2.01 to
be performed or observed by the Company, shall be expressly assumed, by
supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act, as then in effect) satisfactory in form to the Trustee
executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the
entity which shall have acquired such property; and provided further that, if
the Person formed in such consolidation or into which the Company is merged
or to which the Company has sold, conveyed, transferred or otherwise disposed
of its properties as an entirety or substantially as an entirety is not
organized and validly existing under the laws of the United States, any state
thereof or the District of Columbia, the supplemental indenture described in
this Section 10.01 shall also contain the following provisions:
"(a) [Such Person] hereby agrees to pay to the holders of Trust
Securities any additional amounts as may be necessary in order that every
net payment or other amount due on the Trust Securities, after withholding
for or on
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account of any present or future tax, assessment or governmental
charge imposed upon such holder of Trust Securities (except for a tax,
assessment or charge imposed solely as a result of a connection between
the recipient and the jurisdiction imposing such tax, assessment or
charge) by reason of or as a result of such payment or other amount being
paid by an entity which is not an entity existing under the laws of the
United States or any state thereof or the District of Columbia, will not
be less than the amount provided for in the Indenture, this Indenture
Supplement, the Trust Securities or the Preferred Securities Guarantee
related to the Preferred Securities, as the case may be, to be then due
and payable.
(b) Any litigation based hereon, or arising out of, under, or in
connection with, the Indenture and/or this Supplemental Indenture or any
other document relating hereto or thereto, or any course of conduct,
course of dealing, statements (whether verbal or written) or actions of
the Trustee or [such Person] shall be brought and maintained exclusively
in the courts of the State of Illinois or in the United States District
Court for the Northern District of Illinois; PROVIDED, HOWEVER, that any
suit seeking enforcement against any property may be brought at Trustee's
or [such Person's] option, in the courts of any jurisdiction where such
property may be found. [Such Person] hereby expressly and irrevocably
submits to the jurisdiction of the courts of the State of Illinois and of
the United States District Court for the Northern District of Illinois for
the purpose of any such litigation as set forth above and irrevocably
agrees to be bound by any judgment rendered thereby in connection with
such litigation. [Such Person] further irrevocably consents to the
service of process by registered mail, postage prepaid, or by personal
service within or without the State of Illinois. [Such Person] hereby
expressly and irrevocably waives, to the fullest extent permitted by law,
any objection which it may have or hereafter may have to the laying of
venue of any such litigation brought in any such court referred to above
and any claim that any such litigation has been brought in an inconvenient
forum. To the extent that [such Person] has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution or otherwise) with respect to itself or its property, [such
Person] hereby irrevocably waives such immunity in respect of its
obligations under the Indenture and this Supplemental Indenture."
SECTION 10.02. SUCCESSOR PERSON SUBSTITUTED.
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(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the Debt Securities of
all series Outstanding and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture or established with
respect to each series of the Debt Securities pursuant to Section 2.01 to be
performed or observed by the Company with respect to each series, such
successor Person shall succeed to and be substituted for the Company with the
same effect as if it had been named as the Company herein.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition, such changes in phraseology and form (but not
in substance) may be made in the Debt Securities thereafter to be issued as
may be appropriate.
(c) Nothing contained in this Indenture or in any of the Debt
Securities shall prevent the Company from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other Person
(whether or not affiliated with the Company).
SECTION 10.03. EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE. The
Trustee, subject to the provisions of Section 7.01, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE. If at any
time: (a) the Company shall have delivered to the Trustee for cancellation
all Debt Securities of a series theretofore authenticated (other than any
Debt Securities that shall have been destroyed, lost or stolen and that shall
have been replaced or paid as provided in Section 2.07) and Debt Securities
for whose payment money or Governmental Obligations have theretofore been
deposited in trust or segregated and held in trust by the Company(and
thereupon repaid to the Company or discharged from such trust, as provided in
Section 11.05); or (b) all such Debt Securities of a particular series not
theretofore delivered to the Trustee for cancellation shall have become due
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and payable, or are by their terms to become due and payable within one year
or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations or a
combination thereof, sufficient in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay at maturity or upon redemption all
Debt Securities of that series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or
to become due to such date of maturity or date fixed for redemption, as the
case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder with respect to such series by the Company; then if
the Company has delivered to the Trustee an Opinion of Counsel based on the
fact that (x) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (y) since the date hereof, there has
been a change in the applicable United States federal income tax law, in
either case to the effect that, and such opinion shall confirm that, the
holders of the Debt Securities of such series will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to United States
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge
had not occurred, this Indenture shall thereupon cease to be of further
effect with respect to such series except for the provisions of Sections
2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, which shall survive until the
date of maturity or redemption date, as the case may be, and Sections 7.06
and 11.05, which shall survive to such date and thereafter, and the Trustee,
on demand of the Company and at the cost and expense of the Company shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture with respect to such series.
SECTION 11.02. DISCHARGE OF OBLIGATIONS. If at any time all Debt
Securities of a particular series not theretofore delivered to the Trustee
for cancellation or that have not become due and payable as described in
Section 11.01 shall have been paid by the Company by depositing irrevocably
with the Trustee as trust funds moneys or an amount of Governmental
Obligations sufficient to pay at maturity or upon redemption all such Debt
Securities of that series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or
to become due to such date of maturity or date fixed for redemption, as the
case may be, and if the Company shall also pay or cause to be paid all other
sums payable
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hereunder by the Company with respect to such series, then after the date
such moneys or Governmental Obligations, as the case may be, are deposited
with the Trustee then, if the Company has delivered to the Trustee an Opinion
of Counsel based on the fact that (x) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (y) since the
date hereof, there has been a change in the applicable United States federal
income tax law, in either case to the effect that, and such opinion shall
confirm that, the holders of the Debt Securities of such series will not
recognize income, gain or loss for United States federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
United States federal income tax on the same amount and in the same manner
and at the same times, as would have been the case if such deposit,
defeasance and discharge had not occurred, the obligations of the Company,
under this Indenture with respect to such series shall cease to be of further
effect except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02,
4.03, 7.06, 7.10 and 11.05 hereof which shall survive until such Debt
Securities shall mature and be paid and Sections 7.06 and 11.05, which shall
survive to such date and thereafter.
SECTION 11.03. DEPOSITED MONEYS TO BE HELD IN TRUST. All moneys
or Governmental Obligations deposited with the Trustee pursuant to Section
11.02 shall be held in trust and shall be available for payment as due,
either directly or through any paying agent (including the Company acting as
its own paying agent), to the holders of the particular series of Debt
Securities for the payment or redemption of which such moneys or Governmental
Obligations have been deposited with the Trustee.
SECTION 11.04. PAYMENT OF MONEYS HELD BY PAYING AGENTS. In
connection with the satisfaction and discharge of this Indenture, all moneys
or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to
the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.
SECTION 11.05. REPAYMENT TO COMPANY. Any moneys or Governmental
Obligations deposited with any paying agent or the Trustee, or then held by
the Company, in trust for payment of principal of or premium or interest on
the Debt Securities of a particular series that are not applied but remain
unclaimed by the holders of such Debt Securities for at least two years after
the date upon which the principal of (and premium, if any) or interest on
such Debt Securities shall have respectively become due and payable, shall be
repaid to the Company on May 31 of each year or (if then held by the Company)
shall be discharged from such trust; and thereupon the paying agent and the
Trustee shall
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be released from all further liability with respect to such moneys or
Governmental Obligations, and the holder of any of the Debt Securities
entitled to receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01. NO RECOURSE. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Debt Security,
or for any claim based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, past, present or
future as such, of the Company or of any predecessor or successor
corporation, either directly or through the Company or any such predecessor
or successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that this Indenture and the obligations issued
hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors, as such, of the Company
or of any predecessor or successor corporation, or any of them, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in
any of the Debt Securities or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, stockholder, officer or director, as
such, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Debt Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as consideration for,
the execution of this Indenture and the issuance of such Debt Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. EFFECT ON SUCCESSORS AND ASSIGNS. All the
covenants, stipulations, promises and agreements in this
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Indenture contained by or on behalf of the Company shall bind its successors
and assigns, whether so expressed or not.
SECTION 13.02. ACTIONS BY SUCCESSOR. Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be done and
performed with like force and effect by the corresponding board, committee or
officer of any corporation that shall at the time be the lawful successor of
the Company.
SECTION 13.03. SURRENDER OF COMPANY POWERS. The Company by
instrument in writing executed by authority of 2/3 (two-thirds) of its Board
of Directors and delivered to the Trustee may surrender any of the powers
reserved to the Company, and thereupon such power so surrendered shall
terminate both as to the Company and as to any successor corporation.
SECTION 13.04. NOTICES. Except as otherwise expressly provided
herein, any notice or demand that by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the holders
of Debt Securities to or on the Company may be given or served by being
deposited first class postage prepaid in a post-office letterbox addressed
(until another address is filed in writing by the Company with the Trustee),
as follows: Telephone and Data Systems, Inc., 30 N. LaSalle, Chicago,
Illinois 60602, Attention: President and Chief Executive Officer. Any
notice, election, request or demand by the Company or any Securityholder to
or upon the Trustee shall be deemed to have been sufficiently given or made,
for all purposes, if given or made in writing at the Corporate Trust Office
of the Trustee.
SECTION 13.05. GOVERNING LAW. This Indenture and each Debt
Security shall be deemed to be a contract made under the internal laws of the
State of New York, and for all purposes shall be construed in accordance with
the laws of said State.
SECTION 13.06. TREATMENT OF THE DEBT SECURITIES AS DEBT. It is
intended that the Debt Securities will be treated as indebtedness and not as
equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.
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SECTION 13.07. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which
the furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant in this Indenture shall include (1) a statement that the Person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of
such Person, such Person has made such examination or investigation as is
necessary to enable such Person to express an informed opinion as to whether
or not such covenant or condition has been complied with; and (4) a statement
as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.
SECTION 13.08. PAYMENTS ON BUSINESS DAYS. Except as provided
pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in
an Officers' Certificate, or established in one or more indentures
supplemental to this Indenture, in any case where the date of maturity of
interest or principal of any Debt Security or the date of redemption of any
Debt Security shall not be a Business Day, then payment of interest or
principal (and premium, if any) may be made on the next succeeding Business
Day with the same force and effect as if made on the nominal date of maturity
or redemption, and no interest shall accrue for the period after such nominal
date.
SECTION 13.09. CONFLICT WITH TRUST INDENTURE ACT. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
SECTION 13.10. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which shall be an
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original, but such counterparts shall together constitute but one and the
same instrument.
SECTION 13.11. SEPARABILITY. In case any one or more of the
provisions contained in this Indenture or in the Debt Securities of any
series shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Indenture or of such Debt Securities, but
this Indenture and such Debt Securities shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
SECTION 13.12. ASSIGNMENT. The Company will have the right at all
times to assign any of its respective rights or obligations under this
Indenture to a direct or indirect wholly-owned Subsidiary of the Company,
PROVIDED THAT, in the event of any such assignment, the Company will remain
liable for all such obligations. Subject to the foregoing, this Indenture is
binding upon and inures to the benefit of the parties hereto and their
respective successors and assigns. This Indenture may not otherwise be
assigned by the parties thereto.
SECTION 13.13. ACKNOWLEDGMENT OF RIGHTS. The Company acknowledges
that, with respect to any Debt Securities held by a Trust or a trustee of
such Trust, if the Property Trustee of such Trust fails to enforce its rights
under this Indenture as the holder of the series of Debt Securities held as
the assets of such Trust, any holder of Preferred Securities may, after a
period of 30 days has elapsed from such holder's written request to such
Property Trustee to enforce such rights, institute legal proceedings directly
against the Company to enforce such Property Trustee's rights under this
Indenture without first instituting any legal proceedings against such
Property Trustee or any other person or entity.
ARTICLE XIV
SUBORDINATION OF DEBT SECURITIES
SECTION 14.01. SUBORDINATION TERMS. The payment by the Company of
the principal of, premium, if any, and interest on any series of Debt
Securities issued hereunder shall be subordinated to the extent set forth in
an indenture supplemental hereto relating to such Debt Securities.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
TELEPHONE AND DATA SYSTEMS, INC.
By:
--------------------------
Name:
Title:
Attest:
By: --------------------------
--------------
Secretary
------------------------------,
Not in its individual capacity but
solely as Trustee
By:
--------------------------
Name:
Title:
Attest:
By:
--------------------------
Name:
Title:
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STATE OF ILLINOIS)
COUNTY OF COOK ) SS
On the ___ day of _____, 1997, before me personally came _______________
to me known, who, being by me duly sworn, did depose and say that he is
a __________ of TELEPHONE AND DATA SYSTEMS, INC., one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto
by like authority.
NOTARY PUBLIC
[seal] Commission expires:
STATE OF ILLINOIS )
COUNTY OF COOK ) SS
On the ___ day of _____, 1997, before me personally came __________________
to me known, who, being by me duly sworn, did depose and say that he is a
_________________________ of ______________________________, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC
[seal] Commission expires:
<PAGE>
_______________________________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of November 18, 1997
Between
TELEPHONE AND DATA SYSTEMS, INC.
and
THE FIRST NATIONAL BANK OF CHICAGO
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ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS . . . . . . . . . . . . . . 2
SECTION 1.2. INTERPRETATION. . . . . . . . . . . . . . . . . 3
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE SUBORDINATED DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT. . . . . . . . 4
SECTION 2.2. MATURITY. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. FORM AND PAYMENT. . . . . . . . . . . . . . . . 4
SECTION 2.4. GLOBAL SUBORDINATED DEBENTURE . . . . . . . . . 5
SECTION 2.5. INTEREST. . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. TAX EVENT REDEMPTION. . . . . . . . . . . . . . 7
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY. . . . . . . . . 7
SECTION 3.3. NO SINKING FUND . . . . . . . . . . . . . . . . 8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD. . . . . . 8
SECTION 4.2. NOTICE OF EXTENSION . . . . . . . . . . . . . . 9
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES . . . . . . . . . . . . . .10
ARTICLE VI
SUBORDINATION
SECTION 6.1. AGREEMENT TO SUBORDINATE. . . . . . . . . . . .11
SECTION 6.2. DEFAULT ON SENIOR INDEBTEDNESS. . . . . . . . .11
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SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. . . . . .12
SECTION 6.4. SUBROGATION . . . . . . . . . . . . . . . . . .14
SECTION 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION . . . . . .15
SECTION 6.6. NOTICE BY THE COMPANY . . . . . . . . . . . . .15
SECTION 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS . . . . . . . . . . . . . . . . .16
SECTION 6.8. SUBORDINATION MAY NOT BE IMPAIRED . . . . . . .16
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE . . . . . . . . . . . . . .17
ARTICLE VIII
FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE. . . . . . . . .17
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF SUBORDINATED DEBENTURES . . .27
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE. . . . . . . . . . .27
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS . . . . .27
SECTION 10.3. GOVERNING LAW. . . . . . . . . . . . . . . . .27
SECTION 10.4. SEPARABILITY . . . . . . . . . . . . . . . . .27
SECTION 10.5. COUNTERPARTS . . . . . . . . . . . . . . . . .28
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of November 18, 1997
(the "FIRST SUPPLEMENTAL INDENTURE"), between Telephone and Data Systems,
Inc., an Iowa corporation (the Company"), and The First National Bank of
Chicago, a national banking association, duly organized and existing under
the laws of the United States, as trustee (the Trustee") under the Indenture
dated as of October 15, 1997 between the Company and the Trustee (the
Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities, to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
as provided in the Indenture; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debt
Securities to be known as its 8.50% Junior Subordinated Deferrable Interest
Debentures due December 31, 2037 (the "Subordinated Debentures"), the form
and substance of which and the terms, provisions and conditions thereof to be
set forth as provided in the Indenture and this First Supplemental Indenture;
and
WHEREAS, TDS Capital I, a Delaware statutory business trust (the
Trust"), has offered to the public $150,000,000 aggregate stated liquidation
amount of its Trust Originated Preferred Securities (the "Preferred
Securities") and has offered to the Company $4,640,000 aggregate stated
liquidation amount of its Trust Originated Common Securities (the "Common
Securities"), such Preferred Securities and Common Securities representing
undivided beneficial interests in the assets of the Trust, and proposes to
invest the proceeds from such offering in $154,640,000 aggregate principal
amount of the Subordinated Debentures; and
WHEREAS, the Company has requested the Trustee to execute and
deliver this First Supplemental Indenture, and all requirements necessary to
make this First Supplemental Indenture a valid instrument, in accordance with
its terms, and to make the Subordinated Debentures, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations
of the Company, have been performed, and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects;
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NOW, THEREFORE, in consideration of the purchase and acceptance of
the Subordinated Debentures by the holder thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Subordinated Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, (a) a term defined in the Indenture has the same meaning when used
in this First Supplemental Indenture; (b) a term defined anywhere in this
First Supplemental Indenture has the same meaning throughout; and (c) the
following terms have the meanings given to them in the Declaration: (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Redemption Tax Opinion; (iv)
Preferred Security Certificate; (v) Property Trustee; (vi) Pro Rata; (vii)
Regular Trustees; and (viii) Tax Event.
In addition, the following terms have the following respective
meanings:
DECLARATION:
The term "Declaration" shall mean the Amended and Restated
Declaration of Trust of TDS Capital I, a Delaware business trust, dated as of
November 18, 1997.
MATURITY DATE:
The term "Maturity Date" shall mean the date on which the
Subordinated Debentures mature and on which the principal shall be due and
payable together with all accrued and unpaid interest thereon including
Compounded Interest (as defined in Section 4.1) and Additional Interest (as
defined in Section 2.5(c)), if any.
SENIOR INDEBTEDNESS:
The term "Senior Indebtedness" shall mean (i) any payment in
respect of (A) indebtedness of the Company for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds, notes or other
similar instruments issued by the Company; (ii) all capital lease obligations
of the Company; (iii) all obligations of the Company issued or assumed as the
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deferred purchase price of property, all conditional sale obligations of the
Company and all of its obligations under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
(iv) all obligations of the Company for reimbursement on any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons for the payment of which the Company is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any lien on any property or asset of the Company (whether
or not such obligation is assumed by the Company), except for (1) the
Subordinated Debentures and any other indebtedness that is by its terms
subordinated to or pari passu with the Subordinated Debentures, as the case
may be, including all other debt securities and guarantees in respect of
those debt securities, issued to any other trusts, partnerships or any other
entity affiliated with the Company which is a financing vehicle of the
Company ("Financing Entity") in connection with an issuance of preferred
securities by such Financing Entity or other securities which rank pari passu
with, or junior to, the Preferred Securities, and (2) any indebtedness
between or among the Company and its Affiliates.
SECTION 1.2. INTERPRETATION. Each definition in this First
Supplemental Indenture includes the singular and the plural, and references
to the neuter gender include the masculine and feminine where appropriate.
Terms which relate to accounting matters shall be interpreted in accordance
with generally accepted accounting principles in effect from time to time.
References to any statute mean such statute as amended at the time and
include any successor legislation. The word "or" is not exclusive, and the
words "herein," "hereof" and "hereunder" refer to this First Supplemental
Indenture as a whole. The headings to the Articles and Sections are for
convenience of reference and shall not affect the meaning or interpretation
of this First Supplemental Indenture. References to Articles and Sections
mean the Articles and Sections of this First Supplemental Indenture unless
otherwise specified.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE SUBORDINATED DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT. There is hereby
authorized a series of Debt Securities designated the "8.50% Junior
Subordinated Deferrable Interest Debentures due December 31, 2037," limited
in aggregate principal amount to $154,640,000, which amount shall be as set
forth in any written order of the Company for the authentication and delivery
of such Debt Securities pursuant to Section 2.04 of the Indenture.
SECTION 2.2. MATURITY. The Maturity Date will be the Stated
Maturity Date provided that the Company may at its option at any time prior
to the Stated Maturity Date extend the Maturity Date to a date not later than
December 31, 2046; PROVIDED, HOWEVER, that at the time such election is made
and at the effective time of such extension (as specified by the Company) (i)
the Company is not in bankruptcy, otherwise insolvent or in liquidation, (ii)
the Company is not in default in the payment of any interest or principal on
the Subordinated Debentures, and (iii) in the case of Subordinated Debentures
held by the Trust, the Trust is not in arrears on payments of Distributions
and no deferred Distributions are accumulated. In the event the Company
elects to extend the stated maturity of the Subordinated Debentures, it shall
give notice of any such change to the Trustee, and the Trustee shall give
notice of such extension to the Holders of the Subordinated Debentures, not
more than 90 and not less than 30 days prior to the effective time of such
extension.
SECTION 2.3. FORM AND PAYMENT. Except as provided in Section 2.4,
the Subordinated Debentures shall be issued in fully registered certificated
form without interest coupons. Principal and interest on the Subordinated
Debentures issued in certificated form will be payable, the transfer of such
Subordinated Debentures will be registrable and such Subordinated Debentures
will be exchangeable for Subordinated Debentures bearing identical terms and
provisions at the office or agency of the Trustee in Chicago, Illinois,
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to the registered holder at such address as shall
appear in the Security Register or by wire transfer to such account as may
have been appropriately designated by such holder. Notwithstanding the
foregoing, so long as the registered holder of any Subordinated Debentures is
the Property Trustee, the
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payment of the principal of and interest (including Compounded Interest and
Additional Interest, if any) on such Subordinated Debentures held by the
Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee. The Subordinated Debentures will be
denominated in U.S. dollars and payments of principal and interest on the
Subordinated Debentures shall be made in U.S. dollars.
SECTION 2.4. GLOBAL SUBORDINATED DEBENTURE. In connection with
the dissolution of the Trust:
(a) the Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee in exchange for a Global
Security in an aggregate principal amount equal to the aggregate principal
amount of the Subordinated Debentures so presented, to be registered in
the name of the Depositary, or its nominee, and delivered by the Trustee
to the Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Regular Trustees. The Company, upon
any such presentation, shall execute a Global Security in such aggregate
principal amount and deliver the same to the Trustee for authentication
and delivery in accordance with the Indenture and this First Supplemental
Indenture. Payments on the Subordinated Debentures issued as a Global
security will be made to the Depositary; and
(b) if any Preferred Securities are held in non book-entry
certificated form, the Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee and any Preferred
Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee ("Non Book-
Entry Preferred Securities") will be deemed to represent beneficial
interests in Subordinated Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such Preferred
Security Certificates will be cancelled and a Subordinated Debenture,
registered in the name of the holder of the Preferred Security Certificate
or the transferee of the holder of such Preferred Security Certificate, as
the case may be, with an aggregate principal amount equal to the aggregate
stated liquidation amount of the Preferred Security Certificate cancelled,
will be executed by the Company and delivered to the Trustee for
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authentication and delivery in accordance with the Indenture and this
First Supplemental Indenture. On issue of such Subordinated Debentures,
Subordinated Debentures with an equivalent aggregate principal amount that
were presented by the Property Trustee to the Trustee will be deemed to
have been cancelled.
SECTION 2.5. INTEREST.
(a) Each Subordinated Debenture will bear interest at the rate of
8.50% per annum (the "Coupon Rate") from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue principal
and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article IV)
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing on December 31,
1997, to the Person in whose name such Subordinated Debenture or any
predecessor Subordinated Debenture is registered, at the close of business on
the regular record date for such interest installment, which shall be the
close of business on the Business Day next preceding that Interest Payment
Date. If pursuant to the provisions of Section 2.11(c) of the Indenture the
Subordinated Debentures are no longer represented by a Global Security, the
Company may select a regular record date for such interest installment which
shall be any date at least fifteen days before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that
any date on which interest is payable on the Subordinated Debentures is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed in such a
90-day quarter.
(c) If at any time while the Property Trustee is the holder of any
Subordinated Debentures, the Trust or the Property Trustee is required to pay
any taxes, duties, assessments or
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governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in any
case, the Company will pay as additional interest ("Additional Interest") on
the Subordinated Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the
Trust and the Property Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. TAX EVENT REDEMPTION. If a Tax Event has occurred
and is continuing and the Company has received a Redemption Tax Opinion,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the
Company shall have the right upon not less than 30 days' nor more than 60
days' notice to the registered holders of the Subordinated Debentures to
redeem the Subordinated Debentures, in whole but not in part, for cash within
90 days following the occurrence of such Tax Event (the "90 Day Period") at a
redemption price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon to the date of such redemption (the
"Redemption Price") PROVIDED THAT, if at the time there is available to the
Company the opportunity to eliminate, within the 90 Day Period, the Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a
form or making an election, or pursuing some other similar reasonable measure
that has no adverse effect on the Company, the Trust or the Holders of the
Trust Securities issued by the Trust, the Company shall pursue such
Ministerial Action in lieu of redemption; and PROVIDED FURTHER, that the
Company shall have no right to redeem the Subordinated Debentures while the
Trust is pursuing any Ministerial Action pursuant to its obligations under
the Declaration. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the
Company determines and specifies in the notice of redemption, provided the
Company shall deposit with the Trustee an amount sufficient to pay the
Special Redemption Price by 11:00 a.m. on the date such Redemption Price is
to be paid.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
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(a) Subject to the provisions of Article III of the Indenture and
to Section 3.2(b), the Company shall have the right to redeem the
Subordinated Debentures, in whole or in part, from time to time, on or after
November 18, 2002, at the Redemption Price. Any redemption pursuant to this
paragraph will be made upon not less than 30 days' nor more than 60 days'
notice to the registered holder of the Subordinated Debentures, at the
Redemption Price. If the Subordinated Debentures are only partially redeemed
pursuant to this Section 3.2, the Subordinated Debentures will be redeemed
pro rata or by lot or by any other method utilized by the Trustee; PROVIDED,
that if at the time of redemption, the Subordinated Debentures are registered
as a Global Security, the Depositary shall determine by lot the principal
amount of such Subordinated Debentures held by each holder to be redeemed.
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines and
specifies in the notice of redemption, provided the Company shall deposit
with the Trustee an amount sufficient to pay the Redemption Price by 11:00
a.m. on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Subordinated Debentures would
result in the delisting of the Preferred Securities issued by the Trust from
any national securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Subordinated Debentures in whole.
SECTION 3.3. NO SINKING FUND. The Subordinated Debentures are not
entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD. The Company
shall have the right, at any time and from time to time during the term of
the Subordinated Debentures, to extend the interest payment period of such
Subordinated Debentures for up to twenty (20) consecutive quarters (the
"Extended Interest Payment Period"); provided, that, during any such Extended
Interest Payment Period, (a) the Company may not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of Company common stock
in connection with
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the satisfaction by the Company of its obligations under any employee benefit
plans or any other contractual obligation of the Company (other than a
contractual obligation ranking PARI PASSU with or junior to the Subordinated
Debentures), (ii) as a result of a reclassification of Company capital stock
or the exchange or conversion of one class or series of Company capital stock
for another class or series of Company capital stock or (iii) the purchase of
fractional interests in shares of Company capital stock pursuant to the
conversion or exchange provisions of such Company capital stock or the
security being converted or exchanged), (b) the Company may not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by the Company which
rank PARI PASSU with or junior to the Subordinated Debentures and (c) the
Company may not make any guarantee payments with respect to the foregoing
(other than pursuant to the Preferred Securities Guarantee). To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this
Section 4.1, will bear interest compounded quarterly at the Coupon Rate for
each quarter of the Extended Interest Payment Period ("Compounded Interest").
At the end of the Extended Interest Payment Period, the Company shall pay all
interest accrued and unpaid on the Subordinated Debentures, including any
Compounded Interest and Additional Interest ("Deferred Interest") which shall
be payable to the holders of the Subordinated Debentures in whose names the
Subordinated Debentures are registered in the Security Register on the first
record date after the end of the Extended Interest Payment Period. Prior to
the termination of any Extended Interest Payment Period, the Company may
further extend such period, PROVIDED that such period together with all such
further extensions thereof shall not exceed twenty (20) consecutive quarters
or extend beyond the maturity of the Subordinated Debentures. Upon the
termination of any Extended Interest Payment Period and upon the payment of
all Deferred Interest then due, the Company may select a new Extended
Interest Payment Period, subject to the foregoing requirements. No interest
shall be due and payable during an Extended Interest Payment Period, except
at the end thereof.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to both the Regular
Trustees and the Property Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next succeeding
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date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record
or payment date for such Distributions to the New York Stock Exchange or
other applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the holders of the Subordinated
Debentures and the Trustee written notice of its selection of such Extended
Interest Payment Period ten (10) Business Days before the earlier of (i) the
next succeeding Interest Payment Date, or (ii) the date the Company is
required to give notice of the record or payment date of such interest
payment to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Subordinated Debentures, but in any event
at least two Business Days before such record date.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the
twenty quarters permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES. In connection with the
offering, sale and issuance of the Subordinated Debentures to the Property
Trustee in connection with the sale of the Trust Securities by the Trust, the
Company shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Subordinated Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and ex-
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penses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses
and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
ARTICLE VI
SUBORDINATION
SECTION 6.1. AGREEMENT TO SUBORDINATE. The Company covenants and
agrees, and each holder of Subordinated Debentures issued hereunder by such
holder's acceptance thereof likewise covenants and agrees, that all
Subordinated Debentures shall be issued subject to the provisions of this
Article VI; and each holder of a Subordinated Debenture, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to
be bound by such provisions.
The payment by the Company of the principal of, premium, if any,
and interest on all Subordinated Debentures issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and subject
in right of payment to the prior payment in full of all Senior Indebtedness
of the Company, whether outstanding at the date of this First Supplemental
Indenture or thereafter incurred.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 6.2. DEFAULT ON SENIOR INDEBTEDNESS. In the event and
during the continuation of any default by the Company in the payment of
principal, premium, interest or any other payment due on any Senior
Indebtedness of the Company, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, then,
in either case, no payment shall be made by the Company with respect to the
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principal (including redemption payments) of, or premium, if any, or interest
on the Subordinated Debentures.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any holder of Subordinated Debentures when such
payment is prohibited by the preceding paragraph of this Section 6.2, such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant
to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the holders of
the Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee within 90 days of such payment of the amounts
then due and owing on the Senior Indebtedness and only the amounts specified
in such notice to the Trustee shall be paid to the holders of Senior
Indebtedness.
SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any
payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership
or other proceedings, all amounts due upon all Senior Indebtedness shall
first be paid in full, or payment thereof provided for in money in accordance
with its terms, before any payment is made by the Company on account of the
principal (and premium, if any) or interest on the Subordinated Debentures;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the
holders of the Subordinated Debentures or the Trustee would be entitled to
receive from the Company, except for the provisions of this Article VI, shall
be paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
holders of the Subordinated Debentures or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Indebtedness of
the Company (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay such Senior Indebtedness in full, in money or
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money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the holders of Subordinated Debentures or to the
Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee or the holders of the Subordinated Debentures before all
Senior Indebtedness of the Company is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit
of the holders of such Senior Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article VI with respect to the Subordinated Debentures to the payment of all
Senior Indebtedness of the Company that may at the time be outstanding,
PROVIDED that (i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for
in Article X of the Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 6.3 if such
other corporation shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions stated in Article X of the Indenture.
Nothing in
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Section 6.2 or in this Section 6.3 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.06 of the Indenture.
SECTION 6.4. SUBROGATION. Subject to the payment in full of all
Senior Indebtedness of the Company, the rights of the holders of the
Subordinated Debentures shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to such Senior Indebtedness
until the all amounts owing on the Subordinated Debentures shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or
securities to which the holders of the Subordinated Debentures or the Trustee
would be entitled except for the provisions of this Article VI, and no
payment over pursuant to the provisions of this Article VI, to or for the
benefit of the holders of such Senior Indebtedness by holders of the
Subordinated Debentures or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company, and the
holders of the Subordinated Debentures be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that
the provisions of this Article VI are and are intended solely for the
purposes of defining the relative rights of the holders of the Subordinated
Debentures, on the one hand, and the holders of such Senior Indebtedness on
the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture
or in the Subordinated Debentures is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness of
the Company, and the holders of the Subordinated Debentures, the obligation
of the Company which is absolute and unconditional, to pay to the holders of
the Subordinated Debentures the principal of (and premium, if any) and
interest on the Subordinated Debentures as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holders of the Subordinated Debentures and
creditors of the Company, other than the holders of Senior Indebtedness of
the Company, nor shall anything herein or therein prevent the Trustee or the
holder of any Subordinated Debenture from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject to the
rights, if any, under this Article VI of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company,
received upon the exercise of any such remedy.
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Upon any payment or distribution of assets of the Company referred
to in this Article VI, the Trustee, subject to the provisions of Section 7.01
of the Indenture, and the holders of the Subordinated Debentures, shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the holders of the
Subordinated Debentures, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article VI.
SECTION 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION. Each holder of
a Subordinated Debenture by such holder's acceptance thereof authorizes and
directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article VI and appoints the Trustee such holder's attorney-in-fact for any
and all such purposes.
SECTION 6.6. NOTICE BY THE COMPANY. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to
the Company that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Subordinated Debentures pursuant to the
provisions of this Article VI. Notwithstanding the provisions of this
Article VI or any other provision of the Indenture and this First
Supplemental Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Subordinated Debentures
pursuant to the provisions of this Article VI unless and until a Responsible
Officer of the Trustee shall have received written notice thereof at the
Principal Office of the Trustee from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section
7.01 of the Indenture, shall be entitled in all respects to assume that no
such facts exist; PROVIDED, HOWEVER, that if the Trustee shall not have
received the notice provided for in this Section 6.6 at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of (or premium, if any) or interest on any Subordinated Debenture),
then, anything herein contained to
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the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they
were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness
of the Company (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior indebtedness or a trustee on
behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of
such Person under this Article VI, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article VI in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article VI, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Section 7.01 of the
Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to holders of Subordinated
Debentures, the Company or any other Person money or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this
Article VI or otherwise.
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SECTION 6.8. SUBORDINATION MAY NOT BE IMPAIRED. No right of any
present or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of the
Indenture, regardless of any knowledge thereof that any such holder may have
or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
holders of the Subordinated Debentures, without incurring responsibility to
the holders of the Subordinated Debentures and without impairing or releasing
the subordination provided in this Article VI or the obligations hereunder of
the holders of the Subordinated Debentures to the holders of such Senior In
debtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE. If the Subordinated Debentures
are to be issued as a Global Security in connection with the distribution of
the Subordinated Debentures to the holders of the Preferred Securities issued
by the Trust upon the dissolution of the Trust, the Company will use its best
efforts to list such Subordinated Debentures on the American Stock Exchange
or on such other exchange as the Preferred Securities are then listed.
ARTICLE VIII
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FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE. The Subordinated
Debentures and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms:
(FORM OF FACE OF SUBORDINATED DEBENTURE)
[IF THE SUBORDINATED DEBENTURE IS TO BE A GLOBAL SECURITY, INSERT:
This Subordinated Debenture is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depositary. This Subordinated Debenture is
exchangeable for Subordinated Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Subordinated Debenture
(other than a transfer of this Subordinated Debenture as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary) may be registered
except in limited circumstances.
Unless this Subordinated Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the issuer or its agent for registration of transfer, exchange
or payment, and any Subordinated Debenture issued is registered in the name
of Cede & Co. or such other name as requested by an authorized representative
of The Depository Trust Company and any payment hereon is made to Cede & Co.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
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No. $
CUSIP No.
TELEPHONE AND DATA SYSTEMS, INC.
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE ________, ____
TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _______ or
registered assigns, the principal sum of ____________ Dollars on ________,
____, or such earlier date established by the Company not earlier than March
________, and to pay interest on said principal sum from ________, 1997 or
from the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on March 31,
June 30, September 30 and December 31 of each year commencing, December 31,
1997, at the rate of ___% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest
compounded quarterly at the same rate per annum. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Subordinated Debenture is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this
Subordinated Debenture (or one or more Predecessor Securities, as defined in
said Indenture) is registered at the close of business on the regular record
date for such interest installment [which shall be the close of business on
the Business Day next preceding such Interest Payment Date.] [IF PURSUANT TO
THE PROVISIONS OF Section 2.11(C) OF THE INDENTURE THE SUBORDINATED
DEBENTURES ARE NO
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LONGER REPRESENTED BY A GLOBAL SECURITY -- which shall be the close of
business on the ________ day preceding such Interest Payment Date.] Any such
interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such regular
record date, and may be paid to the Person in whose name this Subordinated
Debenture (or one or more Predecessor Securities) is registered at the close
of business on a special record date to be fixed by the Trustee for the
payment of such defaulted interest, notice whereof shall be given to the
registered holders of this series of Subordinated Debentures not less than
ten (10) days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Subordinated Debentures may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Subordinated Debenture shall be payable at the office or
agency of the Trustee maintained for that purpose in Chicago, Illinois, in
any coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the holder of
this Subordinated Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Subordinated
Debenture will be made at such place and to such account as may be designated
by the Property Trustee.
The indebtedness evidenced by this Subordinated Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness, and this
Subordinated Debenture is issued subject to the provisions of the Indenture
with respect thereto. Each holder of this Subordinated Debenture, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on behalf of such holder to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided, (c) appoints the Trustee the attorney-in-fact of
such holder for any and all such purposes and (d) agrees to treat this
Subordinated Debenture as indebtedness and not as equity for federal income
tax purposes. Each holder hereof, by acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and
in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or
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hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Subordinated Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Subordinated Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Subordinated Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: ___________
TELEPHONE AND DATA SYSTEMS, INC.
By
[Title]
Attest:
By
Secretary
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debentures of the series of Subordinated
Debentures described in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
------------------------
OF CHICAGO, as Authentication Agent
Not in Its Individual
Capacity But Solely
as Trustee
By By
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF SUBORDINATED DEBENTURE)
This Subordinated Debenture is one of a duly authorized series of
Subordinated Debentures of the Company (herein sometimes referred to as the
"Subordinated Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
_______, 1997, duly executed and delivered between the Company and The First
National Bank of Chicago, not in its individual capacity but solely as
trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of _______, 1997 between the Company and the Trustee (the Indenture
as so supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Subordinated Debentures.
By the terms of the Indenture, the Subordinated Debentures are issuable in
series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of Subordinated
Debentures is limited in aggregate principal amount as specified in said
First Supplemental Indenture.
Upon the occurrence and continuation of a Tax Event, in certain
circumstances this Subordinated Debenture will become due and payable at the
principal amount together with any interest accrued thereon (the "Redemption
Price"). The Redemption Price
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shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines. The Company
shall have the right to redeem this Subordinated Debenture at the option of
the Company, without premium or penalty, in whole or in part at any time on
or after March 31, 2002 (an "Optional Redemption"), at the Redemption Price.
Any Optional Redemption pursuant to this paragraph will be made upon not less
than 30 days' nor more than 60 days' notice, at the Redemption Price. If the
Subordinated Debentures are only partially redeemed by the Company pursuant
to an Optional Redemption, the Subordinated Debentures will be redeemed pro
rata or by lot or by any other method utilized by the Trustee; PROVIDED that
if at the time of redemption, the Subordinated Debentures are registered as a
Global Security, the Depositary shall determine by lot the principal amount
of such Subordinated Debentures held by each holder to be redeemed.
In the event of redemption of this Subordinated Debenture in part only,
a new Subordinated Debenture or Subordinated Debentures of this series for
the unredeemed portion hereof will be issued in the name of the holder hereof
upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Subordinated
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Subordinated Debentures of each series
affected at the time Outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or of modifying in any manner the rights of
the holders of the Subordinated Debentures; PROVIDED, HOWEVER, that no such
supplemental indenture shall (i) extend the fixed maturity of any
Subordinated Debentures of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, without
the consent of the holder of each Subordinated Debenture so affected or (ii)
reduce the aforesaid percentage of Subordinated Debentures, the holders of
which are required to consent to any such supplemental indenture, without the
consent
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of the holders of each Subordinated Debenture then outstanding and affected
thereby. The Indenture also contains provisions permitting the holders of a
majority in aggregate principal amount of the Subordinated Debentures of any
series at the time outstanding affected thereby, on behalf of all of the
holders of the Subordinated Debentures of such series, to waive any past
default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Subordinated
Debentures of such series. Any such consent or waiver by the registered
holder of this Subordinated Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Subordinated Debenture and of any
Subordinated Debenture issued in exchange herefor or in place hereof (whether
by registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Subordinated Debenture.
No reference herein to the Indenture and no provision of this
Subordinated Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Subordinated Debenture
at the time and place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Subordinated Debentures, from time to time to extend the interest payment
period of such Subordinated Debentures for up to twenty (20) consecutive
quarters (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Subordinated Debentures to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the
Company may further extend such Extended Interest Payment Period, PROVIDED
that such Extended Interest Payment Period together with all such further
extensions thereof shall not exceed twenty (20) consecutive quarters or
extend beyond the maturity of the Subordinated Debentures. At the
termination of any such Extended Interest Payment Period and upon the payment
of all accrued and unpaid interest then due, the Company may select a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Subordinated Debenture is transferable by the registered
holder hereof on the Security
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<PAGE>
Register of the Company, upon surrender of this Subordinated Debenture for
registration of transfer at the office or agency of the Trustee in Chicago,
Illinois, accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or the attorney of such holder duly authorized in
writing, and thereupon one or more new Subordinated Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will
be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Subordinated Debenture, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Subordinated Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if any, and
interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any Security Registrar shall be affected
by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Subordinated Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
[The Subordinated Debentures of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
thereof.] [This Global Security is exchangeable for Subordinated Debentures
in definitive form only under certain limited circumstances set forth in the
Indenture. Subordinated Debentures of this series so issued are issuable only
in registered form without coupons in denominations of $25 and any integral
multiple thereof.] As provided in the Indenture and subject to certain
limitations [herein and] therein
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set forth, Subordinated Debentures of this series [so issued] are
exchangeable for a like aggregate principal amount of Subordinated Debentures
of this series of a different authorized denomination, as requested by the
holder surrendering the same.
All terms used in this Subordinated Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF SUBORDINATED DEBENTURES. Subordinated
Debentures in the aggregate principal amount of $154,640,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Subordinated Debentures to or upon
the written order of the Company, signed by its Chairman, its President, or
any Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE. The Indenture, as
supplemented by this First Supplemental Indenture, is in all respects
ratified and confirmed, and this First Supplemental Indenture shall be deemed
part of the Indenture in the manner and to the extent herein and therein
provided.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals
herein contained are made by the Company and not by the Trustee, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.
SECTION 10.3. GOVERNING LAW. This First Supplemental Indenture and
each Subordinated Debenture shall be deemed to be a contract made under the
internal laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said State.
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SECTION 10.4. SEPARABILITY. In case any one or more of the provisions
contained in this First Supplemental Indenture or in the Subordinated
Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this First Supplemental Indenture or
of the Subordinated Debentures, but this First Supplemental Indenture and the
Subordinated Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 10.5. COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
TELEPHONE AND DATA SYSTEMS, INC.
By:
----------------------------------
Title:
[Corporate Seal]
Attest:
Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Trustee
By:
----------------------------------
Title:
[Corporate Seal]
Attest:
Title:
<PAGE>
STATE OF ILLINOIS )
COUNTY OF COOK ) ss:
On the day of _____, 1997, before me personally came ______________,
to me known, who, being by me duly sworn, did depose and say that he is a
______________ of TELEPHONE AND DATA SYSTEMS, INC., one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto
by like authority.
NOTARY PUBLIC
[seal] Commission expires
STATE OF ILLINOIS )
COUNTY OF COOK ):
On the day of April, 1997, before me personally came ____________,
to me known, who, being by me duly sworn, did depose and say that he is the
____________________ of THE FIRST NATIONAL BANK OF CHICAGO, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC
[seal] Commission expires
