FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 1998
-----------------
TDS CAPITAL II
--------------
(Exact name of registrant as specified in its charter)
Delaware 1-13853 36-7208942
-------- ------- ----------
(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
- ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 630-1900
Not Applicable
--------------
(Former name or former address, if changed since last report)
TELEPHONE AND DATA SYSTEMS, INC.
--------------------------------
(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
- ------------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 630-1900
Not Applicable
--------------
(Former name or former address, if changed since last report)
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Item 5. Other Events.
-------------
On February 10, 1998, TDS Capital II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), completed the issuance
and sale of 6,000,000 8.04% 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 and Exhibits
---------------------------------
Exhibits
--------
The exhibits accompanying this report are listed in the accompanying
Exhibit Index.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
By: Telephone and Data Systems, Inc.
As sponsor
By: /s/ GREGORY J. WILKINSON
------------------------
Gregory J. Wilkinson
Vice President and Controller
(principal accounting officer)
By: Telephone and Data Systems, Inc.
By: /s/ GREGORY J. WILKINSON
------------------------
Gregory J. Wilkinson
Vice President and Controller
(principal accounting officer)
Date: April 28, 1998
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
-------------- ----------------------
4.1 Amended and Restated Declaration of Trust, dated as
of February 10, 1998, 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 Trustee
named therein.
4.2 Preferred Securities Guarantee Agreement, dated as of
February 10, 1998, by and among the Company and The
First National Bank of Chicago, as Guarantee Trustee
for the benefit of the holders of Trust Preferred
Securities of the Trust.
4.3 Second Supplemental Indenture, dated as of February
10, 1998, by and among the Company and The First
National Bank of Chicago, as Debt Trustee.
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Exhibit 4.1
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AMENDED AND RESTATED DECLARATION OF TRUST
TDS CAPITAL II
Dated as of February 10, 1998
-----------------------------------
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TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS...................................1
SECTION 1.1. Definitions........................................1
SECTION 1.2. Interpretation.....................................8
ARTICLE II
TRUST INDENTURE ACT..............................................9
SECTION 2.1. Trust Indenture Act; Application...................9
SECTION 2.2. Lists of Holders of Securities.....................9
SECTION 2.3. Reports by the Property Trustee....................9
SECTION 2.4. Periodic Reports to Property Trustee...............9
SECTION 2.5. Evidence of Compliance with Conditions
Precedent.........................................9
SECTION 2.6. Events of Default; Waiver.........................10
SECTION 2.7. Events of Default; Notice.........................11
ARTICLE III
ORGANIZATION....................................................11
SECTION 3.1. Name..............................................11
SECTION 3.2. Office............................................11
SECTION 3.3. Purpose...........................................11
SECTION 3.4. Authority.........................................11
SECTION 3.5. Title to Property of the Trust....................12
SECTION 3.6. Powers and Duties of the Regular Trustees.........12
SECTION 3.7. Prohibition of Actions by the Trust
and the Trustees.................................14
SECTION 3.8. Powers and Duties of the Property Trustee.........15
SECTION 3.9. Certain Duties and Responsibilities
of the Property Trustee..........................16
SECTION 3.10. Certain Rights of Property Trustee...............18
SECTION 3.11. Delaware Trustee.................................19
SECTION 3.12. Execution of Documents...........................19
SECTION 3.13. Not Responsible for Recitals or Issuance
of Securities...................................19
SECTION 3.14. Duration of Trust................................20
SECTION 3.15. Mergers..........................................20
ARTICLE IV
SPONSOR.........................................................21
SECTION 4.1. Sponsor's Purchase of Common Securities...........21
SECTION 4.2. Responsibilities of the Sponsor...................21
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ARTICLE V
TRUSTEES........................................................22
SECTION 5.1. Number of Trustees................................22
SECTION 5.2. Delaware Trustee..................................22
SECTION 5.3. Property Trustee; Eligibility.....................22
SECTION 5.4. Qualifications of Regular Trustees and
Delaware Trustee Generally.......................23
SECTION 5.5. Initial Trustees..................................23
SECTION 5.6. Appointment, Removal and Resignation of
Trustees.........................................23
SECTION 5.7. Vacancies among Trustees..........................24
SECTION 5.8. Effect of Vacancies...............................25
SECTION 5.9. Meetings..........................................25
SECTION 5.10. Delegation of Power..............................25
ARTICLE VI
DISTRIBUTIONS...................................................25
SECTION 6.1. Distributions.....................................25
ARTICLE VII
ISSUANCE OF SECURITIES..........................................26
SECTION 7.1. General Provisions Regarding Securities...........26
ARTICLE VIII
TERMINATION OF TRUST............................................26
SECTION 8.1. Termination of Trust..............................26
ARTICLE IX
TRANSFER OF INTERESTS...........................................27
SECTION 9.1. Transfer of Securities............................27
SECTION 9.2. Transfer of Certificates..........................27
SECTION 9.3. Deemed Security Holders...........................27
SECTION 9.4. Book Entry Interests..............................27
SECTION 9.5. Notices to Clearing Agency........................28
SECTION 9.6. Appointment of Successor Clearing Agency..........28
SECTION 9.7. Definitive Preferred Security Certificates........28
SECTION 9.8. Mutilated, Destroyed, Lost or
Stolen Certificates..............................29
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS.......................29
SECTION 10.1. Liability........................................29
SECTION 10.2. Exculpation......................................29
SECTION 10.3. Fiduciary Duty...................................30
SECTION 10.4. Indemnification..................................30
SECTION 10.5. Outside Businesses...............................31
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ARTICLE XI
ACCOUNTING......................................................31
SECTION 11.1. Fiscal Year......................................31
SECTION 11.2. Certain Accounting Matters.......................31
SECTION 11.3. Banking..........................................32
SECTION 11.4. Withholding......................................32
ARTICLE XII
AMENDMENTS AND MEETINGS.........................................32
SECTION 12.1. Amendments.......................................32
SECTION 12.2. Meetings of the Holders of Securities;
Action by Written Consent.......................34
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE
TRUSTEE.........................................................34
SECTION 13.1. Representations and Warranties of
Property Trustee................................34
SECTION 13.2. Representations and Warranties of
Delaware Trustee................................35
ARTICLE XIV
SUCCESSOR CORPORATION...........................................35
SECTION 14.1. Sponsor May Consolidate, Etc.....................35
SECTION 14.2. Successor Person Substituted.....................36
SECTION 14.3. Evidence of Consolidation, Etc. to
Property Trustee................................36
ARTICLE XV
MISCELLANEOUS...................................................36
SECTION 15.1. Notices..........................................36
SECTION 15.2. Governing Law....................................38
SECTION 15.3. Intention of the Parties.........................38
SECTION 15.4. Headings.........................................38
SECTION 15.5. Successors and Assigns...........................38
SECTION 15.6. Partial Enforceability...........................38
SECTION 15.7. Counterparts.....................................38
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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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EXHIBIT A
TERMS OF SECURITIES
EXHIBIT B
PREFERRED SECURITIES GUARANTEE
EXHIBIT C
UNDERWRITING AGREEMENT
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AMENDED AND RESTATED DECLARATION OF TRUST
OF
TDS CAPITAL II
THIS AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated and effective as of February 10, 1998, 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.
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.
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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. ss.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.
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 February 10, 1998.
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:
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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 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:
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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.
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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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 (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.
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.
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 February 10, 1998 of the
Sponsor in respect of the Preferred Securities in the form of Exhibit B.
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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.
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
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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.
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
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the voting percentages are determined) of all outstanding Securities of such
class.
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 "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.
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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 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.
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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
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 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
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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 installment 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 II", as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. 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
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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:
(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 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;
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(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 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
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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 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.
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
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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 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
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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, 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 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,
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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 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.
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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 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);
(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:
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(A) 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); 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 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,
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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;
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).
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(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).
(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 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
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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 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.
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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 (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
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and is directed, to the extent funds are available for that purpose, to make a
Distribution of the Payment Amount to the Holders.
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.
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) March 31, 2047;
(ii) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
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(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.
(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. 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
approvals, 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
(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
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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
Declaration, 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
Beneficial 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,
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.
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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,
destroyed, 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 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
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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, 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 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
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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 provisions of this Section 10.4 shall survive
the termination of this Declaration or the resignation or removal of any
Trustee.
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 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,
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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
required 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 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 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:
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(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
(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:
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(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
Declaration;
(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 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 Preferred
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 notice 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 Successor 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.
(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 ByLaws 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.
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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 (a) 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 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
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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 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.
(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:
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(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 II
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 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.
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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.
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 circumstance,
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
8.04% TRUST ORIGINATED PREFERRED SECURITIES
8.04% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust of TDS Capital II dated as of February 10, 1998 (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 "8.04% 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 "8.04% 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 8.04% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such 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
A-1
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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
March 31, 1998, 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, (i) 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 Debentures and (ii) any funds to be used for the
payment of a Distribution must be remitted (A) if to a Paying Agent or other
intermediary, by 1:00 p.m. New York City time or at such earlier time as
required by such Paying Agent or other intermediary to guarantee that the
Depositary will receive payments in same day funds by 2:30 p.m. New York City
time on the payment date of the Distribution, or (B) if to the Depositary, by
2:30 p.m. New York City time on the payment date of such Distribution. 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
February 5, 1998 (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.
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(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 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.
"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
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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 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
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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 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 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
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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 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
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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 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 directions 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 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
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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.
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.
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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 II
Preferred Securities
(Liquidation Amount $25 per Preferred Security)
TDS CAPITAL II, 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 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 February 10, 1998, 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
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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.
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<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ________ day of February, 1998.
TDS CAPITAL II
By:_________________________
as Regular Trustee
By:_________________________
as Regular Trustee
By:_________________________
as Regular Trustee
--------------------------
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<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 II
Common Securities
(Liquidation Amount $25 per Common Security)
TDS CAPITAL II, 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 February 10, 1998, 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.
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IN WITNESS WHEREOF, the Trust has executed this certificate
this ____ day of February, 1998.
TDS CAPITAL II
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.)
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<PAGE>
Exhibit 4.2
------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
TDS Capital II
Dated as of February 10, 1998
------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions........................................1
Section 1.2. Interpretation.....................................4
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application...................4
Section 2.2. Lists of Holders of Preferred Securities...........5
Section 2.3. Reports by the Guarantee Trustee...................5
Section 2.4. Periodic Reports to Guarantee Trustee..............5
Section 2.5. Evidence of Compliance with Conditions
Precedent.........................................5
Section 2.6. Events of Default; Waiver..........................5
Section 2.7. Events of Default; Notice..........................5
Section 2.8. Conflicting Interests..............................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.........6
Section 3.2. Certain Rights of Guarantee Trustee................7
Section 3.3. Not Responsible for Recitals or Issuance
of Guarantee......................................9
ARTICLE IV
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee; Eligibility.....................9
Section 4.2. Appointment, Removal and Resignation of
Guarantee Trustee.................................9
ARTICLE V
GUARANTEE
Section 5.1. Guarantee..........................................9
Section 5.2. Waiver of Notice and Demand........................9
Section 5.3. Obligations Not Affected..........................10
Section 5.4. Rights of Holders.................................10
Section 5.5. Guarantee of Payment..............................11
Section 5.6. Subrogation.......................................11
Section 5.7. Independent Obligations...........................11
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1. Limitation of Transaction.........................11
Section 6.2. Ranking...........................................12
ARTICLE VII
TERMINATION
Section 7.1. Termination.......................................12
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Exculpation.......................................12
Section 8.2. Indemnification...................................12
ARTICLE IX
SUCCESSOR CORPORATION
Section 9.1. Guarantor May Consolidate, Etc....................13
Section 9.2. Successor Corporation Substituted.................14
Section 9.3. Evidence of Consolidation, Etc. to
Trustee..........................................14
ARTICLE IX
MISCELLANEOUS
Section 10.1. Successors and Assigns...........................15
Section 10.2. Amendments.......................................15
Section 10.3. Notices..........................................15
Section 10.4. Benefit..........................................16
Section 10.5. Governing Law....................................16
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PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Guarantee
Agreement"), dated as of February 10, 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 II, 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 February 10, 1998, 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 8.04% 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 other wise requires: (a) capitalized terms used in this Guarantee
Agreement but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1; (b) a term defined anywhere in this
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.
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:
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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
Distributions 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 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
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
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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 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.
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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 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 8.04%
Junior Subordinated Deferable Interest Debentures due March 31, 2038 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.
(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.
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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.
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
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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 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:
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(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 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 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.
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(ii) Any direction or act of the Guarantor
contemplated by this Guarantee Agreement shall be sufficiently
evidenced by a direction 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 Guarantor.
(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 counsel
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; provided that,
nothing contained in this Section 3.2(a)(vi) shall, however, relieve
the Guarantee Trustee, upon the occurrence of an Event of 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
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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
instructions 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
received, 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 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).
(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 provisions 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 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
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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 agreement, 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
Distribution 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 readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
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 circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4. Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the
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
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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.
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).
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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 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. Notwithstanding 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.
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
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<PAGE>
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).
(c) The provisions of this Section 8.2 shall survive
termination of this Guarantee Agreement or the resignation or removal of the
Guarantee Trustee.
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, 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
13
<PAGE>
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 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
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evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.
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.
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.
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<PAGE>
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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<PAGE>
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>
Exhibit 4.3
---------------------------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of February 10, 1998
Between
TELEPHONE AND DATA SYSTEMS, INC.
and
THE FIRST NATIONAL BANK OF CHICAGO
---------------------------------------
<PAGE>
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...............3
Section 2.2. Maturity.......................................3
Section 2.3. Form and Payment...............................3
Section 2.4. Global Subordinated Debenture..................4
Section 2.5. Interest.......................................5
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
Section 3.1. Tax Event Redemption...........................6
Section 3.2. Optional Redemption by Company.................6
Section 3.3. No Sinking Fund................................7
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period...........7
Section 4.2. Notice of Extension............................7
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses............................8
ARTICLE VI
SUBORDINATION
Section 6.1. Agreement to Subordinate.......................9
Section 6.2. Default on Senior Indebtedness.................9
Section 6.3. Liquidation; Dissolution;
Bankruptcy..................................10
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Section 6.4. Subrogation...................................11
Section 6.5. Trustee to Effectuate
Subordination...............................12
Section 6.6. Notice by the Company.........................12
Section 6.7. Rights of the Trustee; Holders of Senior
Indebtedness................................12
Section 6.8. Subordination May Not Be
Impaired....................................13
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
Section 7.1. Listing on Exchange...........................13
ARTICLE VIII
FORM OF SUBORDINATED DEBENTURE
Section 8.1. Form of Subordinated Debenture................14
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
Section 9.1. Original Issue of Subordinated
Debentures..................................21
ARTICLE X
MISCELLANEOUS
Section 10.1. Ratification of Indenture....................21
Section 10.2. Trustee Not Responsible for
Recitals...................................21
Section 10.3. Governing Law................................21
Section 10.4. Separability.................................21
Section 10.5. Counterparts.................................22
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THIS SECOND SUPPLEMENTAL INDENTURE, dated as of February 10,
1998 (the "Second 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 8.04% Junior Subordinated Deferrable
Interest Debentures due March 31, 2038 (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 Second Supplemental Indenture;
and
WHEREAS, TDS Capital II, 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 Second Supplemental Indenture, and all
requirements necessary to make this Second 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 Second Supplemental Indenture has been duly
authorized in all respects;
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:
<PAGE>
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 Second Supplemental Indenture; (b) a term defined
anywhere in this Second 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 II, a Delaware business
trust, dated as of February 10, 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
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.
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<PAGE>
Section 1.2. Interpretation. Each definition in
this Second 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 Second 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 Second
Supplemental Indenture. References to Articles and Sections mean the Articles
and Sections of this Second Supplemental Indenture unless otherwise specified.
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
"8.04% Junior Subordinated Deferrable Interest Debentures due March 31, 2038,"
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 March 31, 2047; 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
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<PAGE>
designated by such holder. Notwithstanding the foregoing, so long as the
registered holder of any Subordinated Debentures is the Property Trustee, the
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 Second 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,
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<PAGE>
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 authentication and delivery in accordance with the
Indenture and this Second 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 8.04% 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 March 31, 1998, 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 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.
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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.
(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 March 31, 2003, 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
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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 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
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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 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 expenses 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
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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
Second 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 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
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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 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
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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 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.
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
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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 Second
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 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.
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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.
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
Indebtedness, 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.
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ARTICLE VIII
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.
8.04% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE MARCH 31, 2038
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 March 31, 2038, or such later date extended by the
Company not later than March 31, 2047, and to pay interest on said principal sum
from February 10, 1998 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, March
31, 1998, at the rate of 8.04% 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 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
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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
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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<PAGE>
(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 _______, 1998, 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 Second Supplemental Indenture
dated as of _______, 1998 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 Second 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 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
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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, 2003 (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 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
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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 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
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<PAGE>
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 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 Second 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 Second Supplemental Indenture, is in all
respects ratified and confirmed, and this Second 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
Second Supplemental Indenture.
Section 10.3. Governing Law. This Second
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.
Section 10.4. Separability. In case any one
or more of the provisions contained in this Second 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 Second Supplemental Indenture or
of the Subordinated Debentures, but this Second Supplemental Indenture and the
Subordinated Debentures shall be construed as if such invalid
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<PAGE>
or illegal or unenforceable provision had never been contained herein or
therein.
Section 10.5. Counterparts. This Second
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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<PAGE>
IN WITNESS WHEREOF, the parties hereto have
caused this Second 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 _____, 1998, 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___________, 1998, 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
<PAGE>
