REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of __________ __, 1995, by and between Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), United States Cellular Corporation, a
Delaware corporation (the "Company") and Telephone and Data Systems, Inc.
("TDS").
The parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings ascribed to them below:
"Borrowing Agreement" shall mean the Borrowing Agreement dated
________ __, 1995, between Merrill Lynch and Harris.
"Business Day" shall mean any day recognized as a settlement day by
the American Stock Exchange.
"Common Share Delivery Arrangement Agreement" shall mean the Common
Share Delivery Arrangement Agreement dated as of ______ __, 1995, between
Merrill Lynch and the Company.
"Common Shares" shall mean the common shares, par value $1.00 per
share, of the Company.
"Conversion Agent" shall mean Harris Trust and Savings Bank, as
conversion agent under the Indenture, or any successor thereto pursuant to the
terms of the Indenture.
"Custodian" shall mean Harris, in its capacity as custodian pursuant
to a Custody Agreement dated _______ __, 1995, between TDS and Harris.
"Customer Agreement" shall mean the Securities Lending Customer
Agreement Custody Account dated _________ __, 1995, between TDS, Custodian
and Harris.
"Harris" shall mean Harris Trust and Savings Bank.
"Indenture" shall mean the Indenture dated as of __________, 1995
between the Company and Harris Trust and Savings Bank, as Trustee.
"Loan" shall mean a loan by Harris to Merrill Lynch of Loaned
Securities under the Borrowing Agreement and the Customer Agreement.
"Loaned Security" shall mean any Common Share delivered as a Loan
pursuant to the Borrowing Agreement and the Customer Agreement until the
clearing organization used by Harris and Merrill Lynch credits Harris'
Custodian's account or the certificate for such share (or an equivalent
share) is delivered or otherwise accepted back thereunder or until the share
is replaced by purchase of an equivalent security, except that, if any new or
different security shall be exchanged for any Loaned Security by
reorganization, recapitalization or merger of the
issuer of such Loaned Security, such new or different security shall, effective
upon such exchange, be deemed to become a Loaned Security in substitution for
the former Loaned Security for which such exchange was made.
"Purchase Agreement" shall mean the Purchase Agreement dated
_________ __, 1995, between Merrill Lynch and the Company.
"Securities Loan Agreement" shall mean the Securities Loan
Agreement dated _________ __, 1995 between Merrill Lynch and TDS.
"Securities Loan Termination Agreement" shall mean the Securities
Loan Termination Agreement dated ___________ __, 1995 among Merrill Lynch,
TDS and Harris Trust and Savings Bank.
2. REGISTRATION RIGHTS. (a) Prior to the execution hereof, the
Securities and Exchange Commission (the "Commission") has declared effective
under the Securities Act of 1933, as amended (the "Act"), a registration
statement on Form S-3 of the Company covering, among other things, (i)
resales from time to time by Merrill Lynch of the Company's Liquid Yield
Option-TM-Notes due 2015 (the "LYONs"-TM-) obtained by Merrill Lynch pursuant
to Common Share Delivery Arrangements (as defined in the Indenture), (ii)
deliveries from time to time of Common Shares ("Conversion Shares") by
Merrill Lynch, through the Conversion Agent, to converting LYONs holders in
accordance with either Section 1(a) or 1(b) of the Common Share Delivery
Arrangement Agreement and Section 11.19 of the Indenture (whether such
Conversion Shares are Loaned Securities or were otherwise obtained by Merrill
Lynch), and (iii) sales from time to time by Merrill Lynch of Common Shares
that constitute Loaned Securities ("Loaned Shares"). Such Registration
Statement (as amended, if applicable) and the prospectus constituting a part
thereof (including in each case all documents, if any, incorporated by
reference therein and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) or Rule 434 of the rules and regulations of the
Commission under the Act (the "1933 Act Regulations")), in each case as from
time to time amended or supplemented pursuant to the Act or otherwise, are
hereinafter referred to as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be provided by the
Company for use in connection with the offering, sale or delivery of the
Covered Securities which differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective (whether
or not such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations), the term "Prospectus",
shall refer to such revised prospectus from and after the time it is first
provided for such use. The LYONs, the Conversion Shares and the Loaned
Shares are collectively referred to herein as the "Covered Securities."
(b) The Company shall use its best efforts to keep the Registration
Statement continuously effective in order to permit the Prospectus to be usable
by Merrill Lynch in connection with any offering, sale or delivery of Covered
Securities.
- -----------------------
- -TM- Trademark of Merrill Lynch & Co., Inc.
(c) Notwithstanding any other provision hereof, the Company (i)
represents and warrants to Merrill Lynch that (A) the Registration Statement and
the Prospectus comply in all material respects with the Act and the rules and
regulations thereunder, (B) the Registration Statement did not, when it became
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (C) the Prospectus did not, as of the date hereof,
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (ii) will ensure
that (A) the Registration Statement, as amended from time to time, and any
Prospectus, as amended or supplemented from time to time, will comply in all
material respects with the Act and the rules and regulations thereunder, (B) the
Registration Statement, at the time any amendment thereto becomes effective,
will not, if used in connection with the transactions contemplated hereby,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (C) any Prospectus, as amended or supplemented from time to time,
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; PROVIDED, HOWEVER,
that the Company shall not be responsible for the correctness of any information
contained in the Registration Statement or the Prospectus or any amendment or
supplement thereto provided to the Company in writing by Merrill Lynch
specifically for inclusion therein.
(d) The Company shall furnish to Merrill Lynch, prior to the filing
thereof with the Commission, a copy of each amendment to the Registration
Statement and each supplement, if any, to the Prospectus and shall use its best
efforts to reflect in each such document, when so filed with the Commission,
such comments as Merrill Lynch reasonably may propose.
(e) The Company shall advise Merrill Lynch, and, if requested by
Merrill Lynch, confirm such advice in writing:
(i) when any amendment to the Registration Statement has been filed
with the Commission and when such amendment has become effective;
(ii) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration
3
Statement or the initiation of any proceedings for that purpose; and
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Covered Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(f) The Company shall make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement at the earliest possible time.
(g) The Company shall furnish to Merrill Lynch, without charge, at
least one copy of the Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if Merrill Lynch so
requests in writing, all exhibits (including those incorporated by reference).
(h) The Company shall deliver to Merrill Lynch, without charge, as
many copies of the Prospectus and any amendment or supplement thereto as Merrill
Lynch may reasonably request; and the Company consents to the use of the
Prospectus or any amendment or supplement thereto by Merrill Lynch in connection
with the offering, sale or delivery of Covered Securities.
(i) The Company shall register or qualify or cooperate with Merrill
Lynch in connection with the registration or qualification of the Covered
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as Merrill Lynch reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Covered Securities; PROVIDED, HOWEVER, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject it
to general service of process or to taxation in any such jurisdiction where it
is not then so subject.
(j) Upon the occurrence of any event that requires the making of any
changes in the Registration Statement or the Prospectus in order to make the
statements therein not misleading (a "Material Event"), the Company shall
promptly prepare a post-effective amendment to the Registration Statement or a
supplement to the Prospectus or file any other required document so that, as
thereafter delivered in connection with the offering, sale or delivery of
Covered Securities, the Prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the
4
light of the circumstances under which they were made, not misleading.
(k) (i) Upon the occurrence of any of the following events: (a) the
Commission has issued a stop order suspending the effectiveness of the
Registration Statement; (b) a Material Event; or (c) the Company, on the
advice of its counsel, reasonably concludes that it is inadvisable as a
matter of the federal securities law that the Prospectus continue to be
used, the Company shall promptly (A) notify TDS that such event has
occurred and that use of the Prospectus should be suspended and (B)
notify such other parties in the manner required by Section 1 of the
Securities Loan Agreement and Section 1 of the Common Share Delivery
Arrangement Agreement.
(ii) The Company shall promptly notify TDS (and any other party, as
required by Section 1 of the Securities Loan Agreement or Section 1 of the
Common Share Delivery Arrangement Agreement) when the circumstances set
forth in Section 2(k)(i) no longer apply and use of the Prospectus may be
recommenced, and the Company shall use its best efforts to cause such
circumstances no longer to exist and to enable use of the Prospectus.
(iii) Except as otherwise required herein (or in the Securities Loan
Agreement or the Common Share Delivery Arrangement Agreement, as
applicable), the notices required to be given pursuant to this Section 2(k)
shall be given orally, and confirmed in writing (including by facsimile
transmission) by the end of the Business Day following the date of such
notice. Such notices shall be deemed received (A) if receipt by the
required recipient of such written confirmation is telephonically confirmed
between the hours of 7:30 a.m. and 4:30 p.m. on any Business Day, one hour
after the last such telephonic confirmation is obtained or (B) otherwise,
upon the next opening of business of the American Stock Exchange following
the time the last such telephonic confirmation is made.
(iv) The Company agrees to indemnify and hold harmless Merrill Lynch
against any and all Losses (as defined below), as incurred, to the extent
such Loss arises out of Merrill Lynch's inability, without duplication, (A)
to deliver Loaned Securities pursuant to the terms of the Securities Loan
Agreement, as a direct or indirect result of the giving by the Company of
any notice pursuant to Section 2(k)(i) hereof, the giving by TDS or the
Company of the notice provided for in Section 1.3 of the Securities Loan
Agreement, the giving by the Custodian of the notice provided for in
Section 1.6 of the Securities Loan Agreement
5
or the occurrence of any of the events set forth in Section 2(k)(i) hereof,
upon settlement of trades entered into prior to the giving of any such
notice or the occurrence of any such events, as the case may be, (B) to
deliver Loaned Securities in connection with any Common Share Delivery
Arrangement (as defined in the Indenture) pursuant to the terms of the
Securities Loan Agreement or the Common Share Delivery Arrangement
Agreement as a direct or indirect result of the giving by the Company of
any notice pursuant to Section 2(k)(i) hereof, the giving by TDS or the
Company of the notice provided for in Section 1.3 of the Securities Loan
Agreement, the giving by the Custodian of the notice provided for in
Section 1.6 of the Securities Loan Agreement or the occurrence of any of
the events set forth in Section 2(k)(i) hereof, (C) to deliver Conversion
Shares (including any Loaned Securities) in connection with any Common
Share Delivery Arrangement (as defined in the Indenture) pursuant to the
terms of the Common Share Delivery Arrangement Agreement as a direct or
indirect result of the giving by the Company of any notice pursuant to
Section 2(k)(i) hereof, the giving by TDS or the Company of the notice
provided for in Section 1.3 of the Securities Loan Agreement, the giving by
the Custodian of the notice provided for in Section 1.6 of the Securities
Loan Agreement, the giving by the Company of the notice provided for in
Section 1(e) of the Common Share Delivery Arrangement Agreement, the
delivery by the Conversion Agent of the notice provided for in Section 1(f)
of the Common Share Delivery Arrangement Agreement or the occurrence of any
of the events set forth in Section 2(k)(i) hereof, or (D) to resell LYONs
obtained by Merrill Lynch pursuant to any Common Share Delivery Arrangement
(as defined in the Indenture) pursuant to the Common Share Delivery
Arrangement Agreement as a direct or indirect result of the giving by the
Company of any notice pursuant to Section 2(k)(i) hereof, the giving by the
Company of the notice provided for in Section 1(e) of the Common Share
Delivery Arrangement Agreement, the giving by the Conversion Agent of the
notice provided for in Section 1(f) of the Conversion Share Delivery
Arrangement Agreement or the occurrence of any of the events set forth in
Section 2(k)(i) hereof; PROVIDED that in the case of (D), any such notices
are given or events occur within 20 Business Days of the Conversion Date
with respect to a conversion in respect of which the Company and Merrill
Lynch have entered into a Common Share Delivery Arrangement pursuant to
Section 1(a) or Section 1(b) of the Common Share Delivery Arrangement
Agreement. The Company shall not be required under this Section 2(k)(iv)
to indemnify Merrill Lynch for any Loss to the extent such Loss (x) arises
otherwise than out of Merrill Lynch's inability to take the actions
described in (A), (B), (C) or (D) above,
6
(y) arises out of the bad faith, willful misconduct or gross negligence of
Merrill Lynch or (z) arises out of Merrill Lynch's failure to take
reasonable steps to mitigate its Loss.
(l) The Company agrees to indemnify and hold harmless Merrill Lynch and
each person, if any, who controls Merrill Lynch within the meaning of Section 15
of the Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever ("Loss"), as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all Losses, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred, reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to
any Loss to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by Merrill
Lynch expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto).
7
(m) Merrill Lynch agrees to indemnify and hold harmless the Company,
each of the Company's directors, each of the Company's officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act against any and all Loss described in the
indemnity contained in Section (l) above, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by Merrill Lynch expressly for use
in the Registration Statement (or any amendment thereto) or the Prospectus (or
any amendment or supplement thereto).
(n) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
(o) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Sections 2(l),
(m) and (n) above is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and
Merrill Lynch shall contribute to the aggregate Losses of the nature
contemplated by said indemnity agreement incurred by the Company and Merrill
Lynch, as incurred, in such proportions as is appropriate to reflect the
relative fault of the Company, on the one hand, and Merrill Lynch, on the other
hand, in connection with the statements or omissions that resulted in such
Losses, determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company, on the one hand, or
Merrill Lynch, on the other hand; PROVIDED, HOWEVER, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 2(o), each person,
if any, who controls Merrill Lynch within the meaning of Section 15 of the Act
shall have the same rights to contribution as Merrill Lynch, and each director
of the Company,
8
officer of the Company who signed the Registration Agreement, and each person,
if any, who controls the Company within the meaning of Section 15 of the Act
shall have the same rights to contribution as the Company.
(p) On the date of execution hereof, the Company shall deliver to
Merrill Lynch:
(1) The opinion of Sidley & Austin, counsel for the Company, in form
and substance reasonably satisfactory to Merrill Lynch's counsel, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus.
(iii) To the knowledge of such counsel, the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification, except where the failure to be so qualified could not
reasonably be expected to have a material adverse affect on the
Company and its consolidated subsidiaries considered as one
enterprise.
(iv) Each of United States Cellular Operating Company ("USCOC")
and United States Cellular Investment Company ("USCIC" and, together
with USCOC, the "Direct Subsidiaries") has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the State of Delaware and, to the knowledge of such counsel, is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a material adverse
affect on the Company and its consolidated subsidiaries considered as
one enterprise; all of the issued and outstanding capital stock of
each of the Direct Subsidiaries has been duly authorized and validly
issued and is fully paid and non-assessable and all of such capital
stock is owned of record by the Company free and clear, to such
counsel's knowledge, of any
9
security interest, mortgage, pledge, lien, encumbrance, or claim.
(v) The LYONs have been duly authorized by the requisite
corporate action on the part of the Company and, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by you as provided in the Purchase
Agreement, will be valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms, except to the extent
that enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (2)
public policy considerations and (3) general principles of equity
(regardless of whether enforceability is considered in a proceeding
at law or in equity); and the LYONs and the Indenture conform as to
legal matters in all material respects to the descriptions thereof
in the Prospectus.
(vi) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement
enforceable against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, (2) public policy considerations and (3) general principles
of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); the Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
(vii) The Company has authorized capital stock as set forth in
or incorporated by reference into the Registration Statement; to the
knowledge of such counsel, all of the issued and outstanding shares of
capital stock of the Company (including, without limitation, the
Conversion Shares and the Loaned Shares) have been duly and validly
authorized and issued and are fully paid and non-assessable; and the
capital stock of the Company, including, without limitation, the
Common Shares, conforms as to legal matters in all material respects
to the descriptions thereof included in or incorporated by reference
into the Prospectus.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company and TDS and each of the Securities Loan
Agreement and the Securities Loan Termination Agreement has been
duly authorized, executed and delivered by TDS.
10
(ix) The Common Share Delivery Arrangement Agreement has been
duly authorized, executed and delivered by the Company and is a valid
and binding agreement enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors'
rights generally, (2) public policy considerations and (3) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
(x) The Registration Statement is effective under the Act, and,
to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued by the
Commission and no proceeding for that purpose is pending or threatened
by the Commission.
(xi) At the time the Registration Statement became effective and
at the date of such opinion, the Registration Statement (other than
the financial statements, financial data and supporting schedules
included therein and the Included Specified Information, as to which
no opinion need be rendered) complied as to form in all material
respects with the applicable requirements of the Act and the 1933 Act
Regulations. As used in such opinion, "Included Specified
Information" shall mean the following information contained in the
Prospectus: (1) the information under the captions "Summary Operating
Data," "Summary Consolidated Financial Information" and
"Capitalization," (2) the table summarizing the Company's markets and
consolidated operations under the caption "The Company's Operations,"
(3) the table of the Company's cellular interests under the caption
"The Company's Cellular Interests" and (4) the table summarizing the
Company's major service areas under the caption "Customers and
System Usage."
(xii) The documents incorporated by reference into the
Prospectus (other than the financial statements, financial data and
supporting schedules included therein and the Incorporated Specified
Information, as to which no opinion need be rendered), when they were
filed with the Commission, complied as to form in all material
respects with the applicable requirements of the Securities Exchange
Act of 1934, as amended (the "1934 Act") and the regulations
thereunder. As used in such opinion, "Incorporated Specified
Information" shall mean the following
11
information incorporated by reference into the Prospectus from Part I,
Item 1 of the Company's Annual Report on Form 10-K for the year ended
December 31, 1994: (1) the table summarizing the status of the
Company's interests in cellular markets at December 31, 1994 under the
caption "The Company," (2) the table under the caption "The Company's
Cellular Interests," (3) the table summarizing certain information
about customer and market penetration in the Company's managed
operations under the caption "Customers and System Usage" and (4) the
table summarizing certain information by operating cluster under the
caption "Customers and System Usage."
(xiii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or, to such counsel's knowledge,
threatened, which are required to be disclosed in the Registration
Statement other than those disclosed therein or incorporated by
reference therein.
(xiv) The information in the Registration Statement under
"Description of LYONs", Description of Capital Stock" and "Certain Tax
Aspects", to the extent that it constitutes matters of law or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
(xv) To such counsel's knowledge, (1) there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described in the Registration Statement or
to be filed as exhibits thereto which are not described or filed as
required and (2) such descriptions are correct in all material
respects.
(xvi) No consent, approval, authorization or order of, or
registration or qualification with any court or governmental authority
or agency is required in connection with the offer, sale or delivery
of the Covered Securities or the consummation of the transactions
contemplated by this Agreement the Common Share Delivery Arrangement
Agreement, the Securities Loan Agreement or the Securities Loan
Termination Agreement, except (1) the registration under the Act of
the Covered Securities, (2) registration under the 1934 Act of the
LYONs, (3) the qualification of the Indenture under the 1939 Act and
(4) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
12
laws in connection with the offer, sale or delivery of any of the
Covered Securities.
(xvii) To such counsel's knowledge, no consents or waivers from
the holders of the Company's capital stock are required to consummate
the transactions contemplated hereby or by the Common Share Delivery
Arrangement Agreement, the Securities Loan Agreement or the
Securities Loan Termination Agreement, including, without limitation,
the offer, sale or delivery of the Covered Securities, other than
such consents and waivers as have been obtained; and, to such
counsel's knowledge, no holders of securities of the Company have
rights to the registration of such securities in connection with the
registration of the Covered Securities or the offer, sale or delivery
of the Covered Securities, other than such rights as have been
waived.
(xviii) The execution and delivery of this Agreement and the
Common Share Delivery Arrangement Agreement and the offer, sale or
delivery of the Covered Securities, the compliance by the Company with
all of the provisions of this Agreement and the Common Share Delivery
Arrangement Agreement and the consummation of the transactions herein
or therein contemplated do not and will not constitute a breach of, or
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or,
to such counsel's knowledge, any of the Company's consolidated
subsidiaries pursuant to the term of, (1) the Certificate of
Incorporation or by-laws of the Company, (2) any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument, of which such counsel has knowledge, to which the Company
or any of the Company's consolidated subsidiaries is a party or by
which the Company or any of the Company's consolidated subsidiaries
may be bound, or to which any property or assets of the Company or any
of the Company's consolidated subsidiaries is subject, or (3) to such
counsel's knowledge, any currently applicable law, rule, regulation,
judgment, order or administrative or court decree.
Such opinion of Sidley & Austin shall additionally state that nothing
has come to their attention that has caused them to believe that the
Registration Statement (including the information deemed to be part of the
Registration Statement at the time it became effective pursuant to Rule 430A(b),
if applicable, but excluding the financial statements, financial data and
supporting schedules included or incorporated by reference therein, the Included
Specified Information and the
13
Incorporated Specified Information, as to which no belief need be expressed)
at the time it became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements, financial data and
supporting schedules included or incorporated by reference therein, the
Included Specified Information and the Incorporated Specified Information, as
to which no belief need be expressed), as of the date of such Prospectus and
at the date of such opinion included an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
Such opinion shall be limited to the laws of the State of New York,
the General Corporation Law of the State of Delaware and the laws of the United
States of America (other than the Communications Act of 1934, as amended (the
"Communications Act"), and the rules and regulations thereunder).
(2) The opinion, of Koteen and Naftalin, special counsel to the
Company, in form and substance reasonably satisfactory to your counsel, to
the effect that:
(i) No consent, approval, authorization or order of, or
registration or qualification with, the Federal Communications
Commission (the "FCC") is required in connection with the offer, sale
or delivery of the Covered Securities or the consummation of the
transactions contemplated by this Agreement, the Common Share Delivery
Arrangement Agreement or the Securities Loan Agreement, except to the
extent that ownership of a given number of Common Shares, whether or
not acquired pursuant to any of the agreements identified above, would
be inconsistent with (a) limitations on alien ownership and/or cross
interest (i.e., ownership or control of competing cellular or Personal
Communications Services ("PCS") systems serving the same general area)
contained in the Communications Act or a rule, regulation, judgment,
order or administrative or court decree issued, enacted or promulgated
thereunder and now in effect or (b) some future provision or
provisions of the Communications Act or a rule, regulation, judgment,
order or court decree, issued, enacted or promulgated thereunder.
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(ii) The execution and delivery of this Agreement and the Common
Share Delivery Arrangement Agreement, the offer, sale or delivery of
the Covered Securities, the compliance by the Company with all of the
provisions of this Agreement and the Common Share Delivery Arrangement
Agreement and the consummation of the transactions herein or therein
contemplated do not and will not, to such counsel's knowledge,
conflict with or result in any violation of, or the creation of any
lien, charge or encumbrance upon, the property or assets of the
Company or, to such counsel's knowledge, its consolidated
subsidiaries, under the Communications Act or any rule, regulation,
judgment, order or administrative or court decree issued, enacted or
promulgated thereunder; neither will any such action conflict with or
have a material adverse effect on any of the certificates,
authorities, licenses or permits, if any, issued or to be issued by
the FCC to the Company or, to such counsel's knowledge, any of the
Company's consolidated subsidiaries that enable them to carry on the
business and operations now operated by them and which are material to
the business of the Company and its consolidated subsidiaries
considered as one enterprise, except to the extent that ownership of a
given number of Common Shares, whether or not acquired pursuant to any
of the agreements identified above, would be inconsistent with (a)
limitations on alien ownership and/or cross interest (i.e., ownership
or control of competing cellular or PCS systems serving the same
general area) contained in the Communications Act or a rule,
regulation, judgment, order or administrative or court decree issued,
enacted or promulgated thereunder and now in effect or (b) some future
provision or provisions of the Communications Act or a rule,
regulation, judgment, order or court decree, issued, enacted or
promulgated thereunder.
(3) The opinion of Mayer, Brown & Platt, counsel for Merrill Lynch,
with respect to the matters set forth in item (i) (insofar as it relates to
the existence and good standing of the Company), (v), (vi), (vii) (insofar
as item (vii) relates to the conformity of the capital stock of the Company
to the description thereof included in or incorporated by reference into
the Prospectus), (viii) and (ix) through (xi), inclusive, of subsection
(p)(1) of this Section, as well as in the last paragraph of subsection
(p)(1) of this Section.
(4) A certificate of the Chairman, President or Vice President-
Finance of the Company and of the Controller or Treasurer of the Company to
the effect that (i) from the
15
date of the most recent financial information included or incorporated by
reference into the Prospectus, there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, (ii)
the Prospectus, as amended or supplemented to the date of such certificate,
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
(iii) no stop order suspending the effectiveness of the Registration
Statement has been received by the Company or, to the Company's knowledge,
issued and, to the Company's knowledge, no proceedings for that purpose
have been initiated or threatened by the Commission.
(5) From Arthur Andersen LLP, a letter dated such date, in form and
substance satisfactory to Merrill Lynch, to the effect that:
(i) they are independent public accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the Act and
the 1933 Act Regulations and no information concerning their relationship
with or interest in the Company and its consolidated subsidiaries is
required by Item 10 of the Registration Statement;
(ii) it is their opinion that (A) the financial statements and
supporting schedules included in or incorporated by reference into the
Registration Statement and covered by their opinions therein comply, and
(B) the combined financial statements of the Los Angeles SMSA Limited
Partnership, the Nashville/Clarksville MSA Limited Partnership and the
Baton Rouge MSA Limited Partnership (collectively, the "Cellular System
Partnerships") incorporated by reference into the Registration Statement
have been properly compiled from the amounts and notes of the underlying
separate audited financial statements of the Cellular System Partnerships
so as to comply, in each case as to form in all material respects with the
applicable accounting requirements of the Act and the 1933 Act Regulations
and the 1934 Act and the regulations thereunder;
(iii) based upon limited procedures set forth in detail in such
letter, nothing has come to their attention which causes them to believe
that (A) the unaudited financial statements and supporting schedules, if
any, of the Company and its consolidated subsidiaries included in or
incorporated by reference into the Registration Statement do
16
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the 1933 Act Regulations or the 1934
Act and the regulations thereunder, as the case may be, or are not
presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements included in or incorporated by reference into the
Registration Statement, (B) the unaudited amounts of revenues, net income
and net income per share set forth following "Summary Consolidated
Financial Information" in the Prospectus were not determined on a basis
substantially consistent with that used in determining the corresponding
amounts in the audited financial statements incorporated by reference in
the Registration Statement, (C) at a specified date not more than five days
prior to the date of this Agreement, there has been any change in the
capital stock of the Company or any increase in the consolidated long term
debt of the Company and its consolidated subsidiaries as compared with the
amounts shown in the March 31, 1995, balance sheet incorporated by
reference into the Registration Statement or, during the period from
April 1, 1995, to a specified date not more than five days prior to the
date of this Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues,
operating income or operating cash flow of the Company and its
consolidated subsidiaries, except in all instances for changes, increases
or decreases which the Registration Statement and the Prospectus disclose
have occurred or may occur; and
(iv) in addition to the examination referred to in their opinions and
the limited procedures referred to in clause (iii) above, they have carried
out certain specified procedures, not constituting an audit, with respect
to certain amounts, percentages and financial information which are
included in the Registration Statement and Prospectus and which are
specified by you, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and
other records of the Company and its consolidated subsidiaries identified
in such letter.
(q) Upon request by Merrill Lynch no later than 30 days following the
filing by the Company of its Annual Report on Form 10-K or any post-effective
amendment to the Registration Statement or supplement to the Prospectus (as
contemplated by Section 2(j) above), the Company, within 30 days of the later to
occur of (i) such request by Merrill Lynch and (ii) such filing by the Company,
shall deliver to Merrill Lynch opinions of
17
counsel (who need not be outside counsel) to the effect of Sections 2(p)(1) and
2(p)(2) above, an officer's certificate to the effect of Section 2(p)(4) above
and an accountant's letter to the effect of Section 2(p)(5) above.
(r) The Company will bear all expenses incurred in connection with
the performance of its obligations under this Section 2.
3. APPLICABLE LAW. This Agreement shall be governed and construed in
accordance with the internal laws of the State of New York.
4. REMEDIES. The parties hereto agree that irreparable damage would
occur in the event of the provisions of this Agreement were not to be performed
in accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
5. AMENDMENTS. Except as otherwise provided herein, the provisions
of this Agreement may be not amended, modified or supplemented unless the
Company shall have obtained the prior written consent of Merrill Lynch and,
insofar as such amendment, modification or supplement relates to Loaned
Securities, TDS.
6. TERMINATION. This Agreement may be terminated by any party upon
five Business Days' notice to the other parties if none of the LYONs are
outstanding.
7. NOTICES. Any request, demand, authorization, notice, waiver,
consent, report or communication to a party hereunder shall, unless this
Agreement specifically provides otherwise, be in writing and delivered in person
or mailed by first-class mail, postage prepaid, addressed as follows or
transmitted by facsimile transmission to the following facsimile numbers (or to
such address or facsimile number as such party may designate by the notice):
if to Merrill Lynch:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
100 Church Street, 18th Floor
New York, New York 10080
Attention: Stock Loan Department
Facsimile No.: (212) 602-7585
Telephone No.: (212) 602-7521
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with copies to:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281
Attention: Trading General Counsel
Facsimile No.: (212) 449-4590
Telephone No.: (212) 449-4385
and to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Michael A. Campbell
Facsimile No.: (312) 701-7711
Telephone No.: (312) 782-0600
if to the Company:
United States Cellular Corporation
8410 West Bryn Mawr
Suite 7000
Chicago, Illinois 60631-3486
Attention: Kenneth R. Myers
Vice President-Finance
Facsimile No.: (312) 399-8959
Telephone No.: (312) 399-8900
if to TDS:
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: Ronald D. Webster, Treasurer
Facsimile No.: (312) 630-1908
Telephone No.: (312) 630-1900
with copies to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Michael G. Hron
Facsimile No.: (312) 853-7036
Telephone No.: (312) 853-7000
19
Except as otherwise set forth herein or in the Securities Loan
Agreement, the Securities Loan Termination Agreement or the Common Share
Delivery Arrangement Agreement, any request, demand, authorization, notice,
waiver, consent, report or communication hereunder shall be deemed given when
actually received, except that any request, demand, authorization, notice,
waiver, consent, report or communication actually received on a day that is
not a Business Day or after business hours on a Business Day shall be deemed
given and received on the next succeeding Business Day.
8. MISCELLANEOUS. This Agreement supersedes any other agreement
between the parties concerning the subject matter hereof. This Agreement shall
not be assigned by any party without the prior written consent of the other
party, and any such assignment without such consent shall be void. Subject to
the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives,
successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED,
By:__________________________________
Name:
Title:
UNITED STATES CELLULAR CORPORATION
By:__________________________________
Name:
Title:
TELEPHONE AND DATA SYSTEMS, INC.
By:__________________________________
Name:
Title:
[Signature page for the Registration Rights Agreement]
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