EXHIBIT 99.4
LYONS OFFERING AGREEMENT
THIS LYONs OFFERING AGREEMENT (the "Agreement"), dated as of , 1995, is
between TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation ("TDS"), and
UNITED STATES CELLULAR CORPORATION, a Delaware corporation ("USM").
RECITALS:
WHEREAS, TDS owns 33,005,877 Series A Common Shares, 33,278,278 Common
Shares and 95,972 Preferred Shares of USM.
WHEREAS, USM intends to file with the Securities and Exchange Commission
(the "Commission"), under the Securities Act of 1933, as amended (the
"Securities Act"), a Registration Statement (the "Registration Statement") to
register Liquid Yield Option Notes ("LYONs"), and Common Shares, par value $1.00
per share (the "Common Shares"), to be offered for sale as described in the
Registration Statement (the "Offering").
WHEREAS, the LYONs will be issued pursuant to an Indenture (the "Indenture")
between USM and Harris Trust and Savings Bank.
WHEREAS, TDS and USM are parties to a Revolving Credit Agreement dated as of
July 1, 1987, as amended (the "Revolving Credit Agreement").
WHEREAS, as of the date hereof, USM had outstanding indebtedness to TDS of
approximately $202 million under the Revolving Credit Agreement.
WHEREAS, USM desires to use the net proceeds from the sale of the LYONs to
reduce the amount of debt due by USM to TDS under the Revolving Credit
Agreement.
WHEREAS, concurrently with the repayment of such debt, TDS and USM would
agree that the total line of credit under the Revolving Credit Agreement will be
reduced to an amount which is mutually agreeable to TDS and USM.
WHEREAS, TDS and USM are parties to an Exchange Agreement dated as of July
1, 1987, as amended (the "Exchange Agreement").
WHEREAS, under the Exchange Agreement, TDS has the right to subscribe to any
issuance of Common Shares or any other voting securities of USM, or of any
securities convertible into or exchangeable for, or carrying a right to
subscribe to or acquire, Common Shares or any other voting securities of USM.
WHEREAS, in connection with the Offering, TDS desires to waive its right to
subscribe for or purchase LYONs upon issuance of the LYONs or Common Shares
issuable upon the conversion by the holder of such LYONs, upon the terms and
conditions set forth herein.
WHEREAS, TDS and USM are parties to a Registration Rights Agreement dated as
of July 1, 1987 (the "Registration Rights Agreement").
WHEREAS, under the Registration Rights Agreement, TDS has certain
registration rights in connection with offerings by USM.
WHEREAS, in connection with the Offering, TDS desires to waive any
registration rights it may have under the Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements herein set forth, and
subject to the conditions hereof, the parties hereto agree as follows:
1. USM agrees that the net proceeds from the sale of the LYONs shall be
used to repay TDS (in whole or, to the extent of such net proceeds, in part) the
balance due TDS under the Revolving Credit Agreement. Such payment shall be made
on the closing date of such Offering or as soon as practicable thereafter.
Immediately following the consummation of the transactions contemplated hereby,
the commitment of TDS to extend loans to USM pursuant to the Revolving Credit
Agreement shall be $100,000,000.
2. TDS hereby waives its rights under the Exchange Agreement to subscribe
for or purchase LYONs upon issuance of the LYONs or Common Shares issuable upon
the conversion by the holders of such LYONs; provided, however, TDS expressly
reserves any rights it may have under the Exchange Agreement to subscribe for
and purchase Common Shares in the event USM elects to exercise its option to
deliver Common Shares in connection with the election by holders of LYONs to
cause USM to purchase LYONs on any Purchase Date or Optional Purchase Date (as
such terms are defined in the Indenture). It is understood that the fair market
value of the consideration paid for the Common Shares for purposes of any such
purchase right by TDS under the Exchange Agreement shall be equal to the Market
Price (as defined in the Indenture) of the Common Shares as determined for such
Purchase Date or Optional Purchase Date under the Indenture. TDS also hereby
waives any rights it may have permitting it to transfer any rights it may have
to subscribe for or purchase such Common Shares on any Purchase Date or Optional
Purchase Date. TDS further waives any registration rights it may have as a
result of the Offering.
3. TDS hereby agrees to indemnify and hold harmless USM, each of USM's
directors, each of USM's officers and each person, if any, who controls USM
within the meaning of Section 15 of the Securities Act, against any and all
loss, liability, claim, damage and expense, including the reasonable fees and
disbursements of counsel (collectively, "Loss") incurred with respect to any
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or any preliminary
prospectus or prospectus included therein or related thereto (or any amendment
or supplement thereto), with respect to any information included or incorporated
by reference, or the failure to include or incorporate information, describing
or related to TDS and the TDS Common Equity Securities (as defined in the
Registration Statement), including, without limitation, any Loss relating to the
registration or failure to register or properly register such TDS Common Equity
Securities or any security which represents the right to acquire or deliver such
TDS Common Equity Securities.
4. This Agreement shall terminate automatically in the event USM abandons
the Offering or the Offering does not take place for any reason. If this
Agreement is terminated pursuant to this Section, such termination shall be
without liability of any party to any other party except as provided herein.
5. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
6. This Agreement shall be governed by the laws of the State of Illinois.
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IN WITNESS WHEREOF, TDS AND USM have executed this Agreement as of the date
first above written.
TELEPHONE AND DATA SYSTEMS, INC.
By:
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Its duly authorized officer
UNITED STATES CELLULAR CORPORATION
By:
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Its duly authorized officer
SIGNATURE PAGE TO LYONS OFFERING AGREEMENT BETWEEN TDS AND USM.