UNITED STATES CELLULAR CORPORATION
(a Delaware corporation)
Debt Securities
UNDERWRITING AGREEMENT
________ __, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
United States Cellular Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell up to $400,000,000 aggregate principal amount of its
senior debt securities (the "Debt Securities") from time to time, in or pursuant
to one or more offerings on terms to be determined at the time of sale.
The Debt Securities will be issued in one or more series as senior
indebtedness (the "Debt Securities") under an indenture, dated as of July 31,
1997 (the "Indenture"), between the Company and The First National Bank of
Chicago, as trustee (the "Trustee"). Each series of Debt Securities may vary,
as applicable, as to title, aggregate principal amount, rank, interest rate or
formula and timing of payments thereof, stated maturity date, redemption and/or
repayment provisions, sinking fund requirements and any other variable terms
established by or pursuant to the applicable Indenture.
Whenever the Company determines to make an offering of Debt Securities
through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), or through an underwriting syndicate managed by Merrill
Lynch, the Company will enter into an agreement (each, a "Terms Agreement")
providing for the sale of such Debt Securities to, and the purchase and offering
thereof by, Merrill Lynch and such other underwriters, if any, selected by
Merrill Lynch (the "Underwriters", which term shall include Merrill Lynch,
whether acting as sole Underwriter or as a member of an underwriting syndicate,
as well as any Underwriter substituted pursuant to Section 10 hereof). The
Terms Agreement relating to the offering of Debt Securities shall specify the
aggregate principal amount of Debt Securities to be issued (the "Underwritten
Securities"), the name of each Underwriter participating in such offering
(subject to substitution as provided in Section 10 hereof) and the name of any
Underwriter other than Merrill Lynch acting as co-manager in connection with
such offering, the aggregate principal amount of Underwritten Securities which
each such Underwriter severally agrees to purchase, whether such offering is on
a fixed or
variable price basis and, if on a fixed price basis, the initial offering
price, the price at which the Underwritten Securities are to be purchased by
the Underwriters, the form, time, date and place of delivery and payment of
the Underwritten Securities and any other material variable terms of the
Underwritten Securities. The Terms Agreement, which shall be substantially in
the form of Exhibit A hereto, may take the form of an exchange of any
standard form of written telecommunication between the Company and Merrill
Lynch, acting for itself and, if applicable, as representative of any other
Underwriters. Each offering of Underwritten Securities through Merrill Lynch
as sole Underwriter or through an underwriting syndicate managed by Merrill
Lynch will be governed by this Underwriting Agreement, as supplemented by the
applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-___)
[and pre-effective amendment[s] no[s]. _______ thereto] for the registration
of the Debt Securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations"). Such registration statement has been declared
effective by the Commission and the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended (the "1939 Act"), and the Company
has filed such post-effective amendments thereto as may be required prior to
the execution of the applicable Terms Agreement and each such post-effective
amendment has been declared effective by the Commission. Such registration
statement (as so amended, if applicable), including the information, if any,
deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933 Act
Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement"; and the final prospectus and the final prospectus
supplement relating to the offering of the Underwritten Securities, in the
form first furnished to the Underwriters by the Company for use in connection
with the offering of the Underwritten Securities, are collectively referred
to herein as the "Prospectus"; provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
the applicable Terms Agreement; provided, further, that if the Company files
a registration statement with the Commission pursuant to Rule 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to "Registration Statement" shall also be deemed
to include the Rule 462 Registration Statement; and provided, further, that
if the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then
all references to "Prospectus" shall also be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term
sheet (the "Term Sheet"), as the case may be, in the form first furnished to
the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references in this Underwriting Agreement to the date of
the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to any prospectus used before the
Registration Statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was
used after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting Agreement, all
references to the Registration Statement, Prospectus, Term Sheet or
preliminary prospectus or to any amendment or supplement to any of the
foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("EDGAR").
All references in this Underwriting Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such
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financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be, prior to the execution of the
applicable Terms Agreement; and all references in this Underwriting Agreement
to amendments or supplements to the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be, after the execution of the applicable Terms Agreement.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to Merrill Lynch, as of the date
hereof, and to each Underwriter named in the applicable Terms Agreement, as of
the date thereof, and as of the Closing Time (as defined below) (in each case, a
"Representation Date") as follows:
(i) The Company meets the requirements for use of Form S-3 under the
1933 Act. The Registration Statement (including any Rule 462(b)
Registration Statement) has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Registration Statement (or such
Rule 462(b) Registration Statement) has been issued under the 1933 Act and
no proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with. In addition, the Indenture has been duly qualified under
the 1939 Act.
At the respective times the Registration Statement (including any Rule
462(b) Registration Statement) and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on Form
10-K with the Commission (the "Annual Report on Form 10-K")) became
effective and at each Representation Date, the Registration Statement
(including any Rule 462(b) Registration Statement) and any amendments
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading. At the date of the Prospectus and at the Closing Time, neither
the Prospectus nor any amendments and supplements thereto included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
If the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
the Company will comply with the requirements of Rule 434.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of Underwritten Securities will, at the
time of such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T. Notwithstanding the foregoing, the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to
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the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or the Prospectus.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, at the time
they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the date of the Prospectus and at the Closing Time did not
and will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(iii) The accountants who certified the Company's consolidated
financial statements and supporting schedules included in or incorporated
by reference into the Registration Statement and the Prospectus are
independent public accountants with respect to the Company and its
consolidated subsidiaries as required by the 1933 Act and the 1933 Act
Regulations.
(iv) The consolidated financial statements of the Company and its
subsidiaries included in the Registration Statement and the Prospectus
present fairly the financial position and results of operations of the
Company and its subsidiaries on a consolidated basis at the respective
dates or for the respective periods to which they apply; such financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the
respective periods involved and such financial statements have been
prepared, and 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") included in the Registration Statement and the Prospectus
have been properly compiled from the amounts and notes of the underlying
separate audited financial statements of the Cellular System Partnerships,
in each case in compliance with the applicable accounting requirements of
the 1933 Act and the 1933 Act Regulations or the 1934 Act and the 1934 Act
Regulations, as the case may be; and the supporting schedules included in
the Registration Statement present fairly the information required to be
stated therein. The selected financial data and the summary financial
information included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement and the
Prospectus. In addition, any pro forma financial statements of the Company
and its subsidiaries and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the information
shown therein, have been prepared in accordance with the Commission's rules
and guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(v) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its consolidated subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business,
(B) there have been no transactions entered into by the Company or any of
its consolidated subsidiaries other than those in the ordinary course of
business which are material to the Company and its consolidated
subsidiaries considered as one enterprise,
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and (C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, and
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and to enter
into and perform its obligations under, or as contemplated under, this
Underwriting Agreement and the applicable Terms Agreement. The Company is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such
qualification, except where the failure to be so qualified or in good
standing would not have a material adverse affect on the Company and its
consolidated subsidiaries considered as one enterprise.
(vii) Each consolidated subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which it owns or leases substantial properties or in which
the conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing would not have a material
adverse affect on the Company and its consolidated subsidiaries considered
as one enterprise; all of the issued and outstanding capital stock of each
such consolidated subsidiary has been duly authorized and validly issued
and is fully paid and non-assessable; and the Company owns a majority of
the issued and outstanding shares of capital stock of each of its
consolidated subsidiaries which are corporations and, except as described
in the Prospectus, owns such capital stock and its interests in each of its
consolidated subsidiaries which are not corporations, directly or through
one or more consolidated subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except such
security interest, mortgage, pledge, lien, encumbrance, claim or equity the
enforcement of which, individually or in the aggregate, would not have a
material adverse affect on the Company and its consolidated subsidiaries
considered as one enterprise.
(viii) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement, and
when issued and authenticated in the manner provided for in the Indenture
and delivered against payment of the consideration therefor specified in
the applicable Terms Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization or other similar laws of general applicability
now or hereafter in effect relating to or affecting creditors' rights, to
public policy considerations and to general equity principles, and will be
entitled to the benefits provided by the Indenture, which will be
substantially in the form included as an exhibit to the Registration
Statement; the Indenture has been, or prior to the issuance of the Debt
Securities thereunder will have been, duly authorized by the Board of
Directors of the Company, and when executed and delivered by the Company
and the Trustee (assuming due authorization, execution and delivery by the
Trustee), will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization or other similar
laws of general applicability now or hereafter in effect relating to or
affecting creditors' rights, to
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public policy considerations and to general equity principles;
equity principles; and the Underwritten Securities and the Indenture
conform to the descriptions thereof in the Prospectus.
(ix) This Underwriting Agreement has been, and the applicable Terms
Agreement as of the date thereof will have been, duly authorized, executed
and delivered by the Company.
(x) The authorized, issued and outstanding capital stock of the
Company is as set forth in or incorporated by reference into the
Registration Statement (except for subsequent issuances, if any, pursuant
to reservations or agreements referred to in the Prospectus); all of the
issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
the capital stock of the Company conforms to the description thereof
included in or incorporated by reference into the Registration Statement
and, except as set forth in the Prospectus, is not subject to preemptive or
other similar rights.
(xi) Neither the Company nor any of its consolidated subsidiaries is
in violation of its charter or by-laws or other documents of organization,
and none of the Company or any of its consolidated subsidiaries is in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any of its consolidated subsidiaries is a party or by which it
or any of them may be bound, or to which any of the property or assets of
the Company or any of its consolidated subsidiaries is subject; the
execution, delivery and performance of this Underwriting Agreement, the
applicable Terms Agreement and the Indenture, and the consummation of the
transactions contemplated herein, therein and in the Registration Statement
and the Prospectus (including the issuance and sale of the Underwritten
Securities and the use of the proceeds from the sale of the Underwritten
Securities as described under the caption "Use of Proceeds") have been
duly authorized by all necessary corporate action by the Company and will
not conflict with or constitute a breach of, or a default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any of its consolidated subsidiaries pursuant to the terms of, any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its consolidated
subsidiaries is a party or by which the Company or any of them may be
bound, or to which any property or assets of the Company or any of its
consolidated subsidiaries is subject; nor will such action result in a
violation of the provisions of the charter or by-laws of the Company or any
of its consolidated subsidiaries or any applicable law, rule, regulation,
judgment, order or administrative or court decree; nor will such action
conflict with or have an adverse effect on any of the certificates,
authorities, licenses or permits of the Company or any of its 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. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any of its subsidiaries.
(xii) No labor dispute with the employees of the Company or any of
its consolidated subsidiaries exists or, to the knowledge of the Company,
is imminent which would materially adversely affect the business operations
of the Company and its consolidated subsidiaries considered as one
enterprise.
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(xiii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened, against or affecting the
Company or any of its consolidated subsidiaries which is required to be
disclosed in or incorporated by reference into the Registration Statement
or, except, in the case of (A) and (B) below, as disclosed in the
Prospectus, which might (A) result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its consolidated subsidiaries
considered as one enterprise, (B) materially and adversely affect the
properties or assets of the Company, and its consolidated subsidiaries,
considered as one enterprise, or (C) materially and adversely affect the
consummation of the transactions contemplated by this Underwriting
Agreement, the applicable Terms Agreement or the Indenture; all pending
legal or governmental proceedings to which the Company or any of its
consolidated subsidiaries is a party or of which any of their respective
property is the subject which are not described in or incorporated by
reference into the Registration Statement and the Prospectus, including
ordinary routine litigation incidental to the business, are, considered in
the aggregate, not material to the Company and its consolidated
subsidiaries considered as one enterprise; and there are no contracts or
documents of the Company or any of its consolidated subsidiaries which are
required to be filed or incorporated by reference as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations which
have not been so filed or incorporated by reference.
(xiv) The Company and its consolidated subsidiaries own or
possess, or can acquire on reasonable terms, the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information), systems or procedures, trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them and neither the Company nor any of its consolidated
subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its consolidated subsidiaries
considered as one enterprise.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
due authorization, execution and delivery by the Company of this
Underwriting Agreement or the applicable Terms Agreement or for the
performance by the Company of the transactions contemplated under the
Prospectus, this Underwriting Agreement, such Terms Agreement or the
Indenture, except as may be required under the 1933 Act or 1933 Act
Regulations, the 1934 Act or 1934 Act Regulations, the 1939 Act, the 1939
Act Regulations or State securities laws.
(xvi) All taxes and fees required to be paid with respect to the
execution of the Indenture and the issuance of the Underwritten Securities
have been paid.
(xvii) The Company and its consolidated subsidiaries possess such
certificates, authorities, licenses or permits issued by the appropriate
local, state, federal or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, and, except as disclosed in the
Registration Statement or the documents incorporated by reference therein,
none of the Company or any of its consolidated subsidiaries has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authority, license or permit which, singly or in the
aggregate,
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if the subject of any unfavorable decision, ruling or finding,
would materially and adversely affect the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its consolidated subsidiaries considered as one enterprise.
(xviii) The Company and its consolidated subsidiaries have good and
marketable title to all real property owned by the Company and its
consolidated subsidiaries and good title to all other properties owned by
them that are material to the business of the Company and its consolidated
subsidiaries considered as one enterprise, in each case, free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind, except (A) as otherwise stated in the
Registration Statement and the Prospectus or (B) those which do not, singly
or in the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by
the Company or any of its consolidated subsidiaries. All of the leases and
subleases material to the business of the Company and its consolidated
subsidiaries considered as one enterprise, and under which the Company or
any of its consolidated subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor any
of its consolidated subsidiaries has received any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of
the Company or any of its consolidated subsidiaries under any of the leases
or subleases mentioned above, or affecting or questioning the rights of the
Company or such consolidated subsidiary of the continued possession of the
leased or subleased premises under any such lease or sublease.
(xix) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement, upon issuance, will be excluded or exempted
under, or beyond the purview of, the Commodity Exchange Act, as amended
(the "Commodity Exchange Act"), and the rules and regulations of the
Commodity Futures Trading Commission under the Commodity Exchange Act (the
"Commodity Exchange Act Regulations").
(xx) The Company is not, and upon the issuance and sale of the
Underwritten Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not be, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(b) Any certificate signed by any officer of the Company or any of its
subsidiaries and delivered to any Underwriter or to counsel for the Underwriters
in connection with the offering of the Underwritten Securities shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby on the date of such certificate and, unless subsequently amended
or supplemented, at each Representation Date subsequent thereto.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations, warranties and
agreements herein contained and shall be subject to the terms and conditions
herein set forth.
(b) Payment of the purchase price for the Underwritten Securities shall be
made at the office of Merrill Lynch & Co., 5500 Sears Tower, Chicago, Illinois
60606, and delivery of the certificates for the Underwritten Securities shall be
made against payment therefor at the office of Merrill Lynch, Pierce, Fenner
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& Smith Incorporated, Merrill Lynch World Headquarters, North Tower, World
Financial Center, New York, New York 10281-1209, or (in either case) at such
other place or places as shall be agreed upon by Merrill Lynch and the Company,
at 10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date of the
applicable Terms Agreement (unless postponed in accordance with the provisions
of Section 10 hereof), or such other time not later than ten business days after
such date as shall be agreed upon by Merrill Lynch and the Company (such time
and date of payment and delivery being herein called "Closing Time"). Payment
shall be made to the Company by wire transfer of immediately available funds to
a bank account designated by the Company, against delivery to Merrill Lynch for
the respective accounts of the Underwriters of the Underwritten Securities to be
purchased by them. It is understood that each Underwriter has authorized
Merrill Lynch, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Underwritten Securities which it has
severally agreed to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Underwritten Securities to be purchased by
any Underwriter whose funds have not been received by the Closing Time but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) Certificates for the Underwritten Securities shall be in such
denominations and registered in such names as Merrill Lynch may request in
writing at least one full business day prior to the Closing Time. The
certificates for the Underwritten Securities will be made available for
examination and packaging by Merrill Lynch in The City of New York not later
than 10:00 A.M. (Eastern time) on the last business day prior to Closing Time.
SECTION 3. COVENANTS. The Company covenants with Merrill Lynch and
with each Underwriter participating in the offering of Underwritten Securities
as follows:
(a) The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the
1933 Act Regulations, if and as applicable, and will notify the
representative(s) of the Underwriters immediately, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Underwritten Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424 and will take such steps as it deems necessary to ascertain promptly
whether the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will promptly
file the Prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) The Company will give Merrill Lynch notice of its intention to file or
prepare any amendment to the Registration Statement (including any filing under
Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish Merrill Lynch with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which Merrill Lynch or counsel for the Underwriters shall reasonably object.
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(c) The Company has furnished or will deliver to Merrill Lynch and counsel
for the Underwriters, without charge, as many signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) as Merrill Lynch has
requested or shall reasonably request, and as many signed copies of all consents
and certificates of experts as Merrill Lynch has requested or shall reasonably
request, and will also deliver to Merrill Lynch, without charge, a conformed
copy of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to any electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) The Company will deliver to each Underwriter, without charge, as many
copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus as such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to any electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) The Company will comply with the 1933 Act and the 1933 Act Regulations
and the 1934 Act and the 1934 Act Regulations so as to permit the completion of
the distribution of the Underwritten Securities as contemplated in this
Underwriting Agreement and the applicable Terms Agreement and in the
Registration Statement and the Prospectus. If at any time when the Prospectus
is required by the 1933 Act or the 1934 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Underwriters
or for the Company, to amend the Registration Statement in order that the
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or to amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(f) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Underwritten Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as Merrill Lynch may designate and to maintain such qualifications
in effect for a period of not less than one year from the date of the applicable
Terms Agreement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Underwritten Securities have been so qualified, the Company will
-10-
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of such Terms Agreement.
(g) The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders as
soon as practicable an earnings statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
(h) The Company will use the net proceeds received by it from the sale of
the Underwritten Securities in the manner specified in the Prospectus under "Use
of Proceeds".
(i) The Company will use its best efforts to effect the listing of the
Underwritten Securities and any related Underlying Securities, prior to the
Closing Time, on any national securities exchange or quotation system if and as
specified in the applicable Terms Agreement.
(j) Between the date of the applicable Terms Agreement and the Closing
Time or such other date specified in such Terms Agreement, the Company will not,
without the prior written consent of Merrill Lynch, directly or indirectly,
issue, sell, offer or contract to sell, grant any option for the sale of, or
otherwise dispose of, any debt securities.
(k) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Underwriting Agreement
and the applicable Terms Agreement, including (i) the printing and filing of
the Registration Statement as originally filed and of each amendment thereto,
(ii) the printing of this Underwriting Agreement, any Terms Agreement, any
agreement among Underwriters and the Indenture, (iii) the preparation, issuance
and delivery to Merrill Lynch of the certificates for the Underwritten
Securities, including any transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of the Underwritten Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel and
accountants, (v) the qualification of the Underwritten Securities under
securities laws in accordance with the provisions of Section 3(f), including
filing fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
surveys, (vi) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto, of the
preliminary prospectuses, of any Term Sheet and of the Prospectus and any
amendments or supplements thereto, (vii) the printing and delivery to the
Underwriters of copies of the Blue Sky surveys, (viii) the fees and expenses of
the Trustee and any Depositary, including the fees and disbursements of their
respective counsel, (ix) any fees payable in connection with the rating of the
Underwritten Securities, (x) the fees and expenses incurred with respect to any
listing of the Underwritten Securities, and (xi) the filing fees incident to the
review, if any, by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Underwritten Securities.
If the applicable Terms Agreement is terminated by Merrill Lynch in
accordance with the provisions of Section 5 or Section 9(b)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
-11-
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters to purchase and pay for the Underwritten Securities pursuant
to the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or be
pending or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel for the Underwriters. A prospectus
containing information relating to the description of the Underwritten
Securities, the specific method of distribution and similar matters shall have
been filed with the Commission in accordance with Rule 424(b)(1), (2), (3), (4)
or (5), as applicable (or any required post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A), or, if the Company has elected to rely upon Rule 434
of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b)(7).
(b) At Closing Time, Merrill Lynch shall have received:
(1) The opinion, dated as of Closing Time, of Sidley & Austin,
counsel for the Company, in form and substance reasonably satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Underwriting Agreement and the applicable Terms
Agreement.
(iii) 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 or in good
standing could not reasonably be expected to have a material adverse effect
on the Company and its consolidated subsidiaries considered as one
enterprise.
(iv) Each of 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 or in good standing could not reasonably be
expected to have a material adverse affect on the Company
-12-
and its consolidated subsidiaries considered as one enterprise; all of the
issued and outstanding capital stock of each of the Direct Subsidiaries has
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 security interest, mortgage, pledge,
lien, encumbrance or claim.
(v) The Underwritten Securities have been duly authorized by the
requisite corporate action on the part of the Company for issuance and sale
pursuant to this Underwriting Agreement and the applicable Terms Agreement,
and the Underwritten Securities, when executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by
the Underwriters as provided in such Terms 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 Underwritten Securities and the Indenture conform as
to legal matters in all material respects to the descriptions thereof in
the Prospectus and are in substantially the form filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement.
(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).
(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 have been duly and validly authorized and issued and are
fully paid and non-assessable; and the capital stock of the Company
conforms as to legal matters in all material respects to the descriptions
thereof included in or incorporated by reference into the Prospectus.
(viii) This Underwriting Agreement and the applicable Terms
Agreement have each been duly authorized, executed and delivered by the
Company.
(ix) The Registration Statement (including any Rule 462(b)
Registration Statement) has been declared effective under the 1933 Act.
Any required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b). To the
best of such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement (or such Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no
proceedings for that purpose have been initiated or are pending or
threatened by the Commission.
-13-
(x) The Registration Statement (including any Rule 462(b)
Registration Statement) and the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement (including any Rule 462(b) Registration Statement)
and Prospectus, excluding the documents incorporated by reference therein,
as of their respective effective or issue dates (other than the financial
statements, including notes thereto, financial data and supporting
schedules included therein or omitted therefrom and the Trustee's Statement
of Eligibility on Form T-1 (the "Form T-1"), as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(xi) The documents incorporated by reference into the Prospectus
(other than the financial statements, including notes thereto, financial
data and supporting schedules therein or omitted therefrom, as to which no
opinion need be rendered), when they were filed with the Commission,
complied as to form in all material respects with the applicable
requirements of the 1934 Act and the 1934 Act Regulations.
(xii) The information in the Prospectus under "Description of
Debt Securities," if any, or any caption purporting to describe any such
Debt Securities and in the Registration Statement under Item 15, to the
extent that it constitutes matters of law, summaries of legal matters or
the Company's charter or bylaws, or legal conclusions, has been reviewed by
such counsel and is correct in all material respects.
(xiii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened which are required to be
disclosed in the Registration Statement or the Prospectus other than those
disclosed therein or incorporated by reference therein.
(xiv) To such counsel's knowledge, (1) there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described in the Prospectus or the Registration Statement or
to be filed as exhibits thereto which are not described or filed as
required and (2) such descriptions are correct in all material respects.
(xv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or
required for the due authorization, execution or delivery by the Company of
the Underwriting Agreement or the applicable Terms Agreement or for the
performance by the Company of the transactions contemplated under the
Prospectus, the Underwriting Agreement, such Terms Agreement or the
Indenture, other than under the 1933 Act, the 1933 Act Regulations, the
1934 Act, the 1934 Act Regulations, the 1939 Act and the 1939 Act
Regulations, which have already been made, obtained or rendered, as
applicable, or State securities laws.
(xvi) The execution and delivery of this Underwriting Agreement,
the applicable Terms Agreement and the Indenture, the issuance of the
Underwritten Securities, the compliance by the Company with all of the
provisions of the Underwritten Securities, the Indenture, this Underwriting
Agreement and the applicable Terms Agreement and the consummation of the
transactions contemplated herein, therein and in the Registration Statement
and the Prospectus (including the issuance and sale of the Underwritten
Securities
-14-
as described under the caption "Use of Proceeds") do not and
will not constitute a breach of, or default or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or, to such counsel's knowledge,
any of the Company's consolidated subsidiaries pursuant to the terms 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.
(xvii) The Indenture has been duly qualified under the 1939 Act.
(xviii) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement, upon issuance, will be excluded or exempted
under, or beyond the purview of, the Commodity Exchange Act, as amended
(the "Commodity Exchange Act"), and the rules and regulations of the
Commodity Futures Trading Commission under the Commodity Exchange Act (the
"Commodity Exchange Act Regulations").
(xix) The Company is not, and upon the issuance and sale of the
Underwritten Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not be, an
"investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
(xx) To such counsel's knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
(xxi) To such counsel's knowledge, neither the Company nor any
of the Direct Subsidiaries is in violation of its charter or by-laws and no
default by the Company or any of its consolidated subsidiaries exists in
the due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described
or referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement.
Such opinion of Sidley & Austin shall additionally state that nothing has
come to their attention that has caused them to believe that the Registration
Statement (including any Rule 426(b) Registration Statement) or any
post-effective amendment thereto (except for financial statements, including
notes thereto, and supporting schedules and other financial data included
therein or omitted therefrom and for the Form T-1, as to which no belief need
be expressed), at the time the Registration Statement (including any Rule
462(b) Registration Statement) or any post-effective amendment thereto
(including the filing of the Company's Annual Report on Form 10-K with the
Commission) became effective or at the date of the applicable Terms
Agreement, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any amendment or
supplement thereto (except for financial statements, including notes thereto,
and supporting schedules and other financial data included therein or omitted
therefrom, as to which no belief need be expressed), at the time the
Prospectus was issued, at the time any such amended or supplemented
prospectus
-15-
was issued or at the Closing Time, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such counsel may also state that they
have relied as to materiality to the extent they deem appropriate in
accordance with their professional responsibilities, upon the judgment of
officers and representatives of the Company.
Such opinion shall be limited to the laws of the State of New York, the
State of Illinois, the General Corporation Law of the State of Delaware and the
federal law of the United States (other than the Communications Act of 1934, as
amended (the "Communications Act"), and the rules and regulations thereunder).
In rendering such opinion, such counsel may rely, as to all matters governed by
jurisdictions other than the laws of the State of New York, the State of
Illinois, the General Corporation Law of the State of Delaware and the federal
law of the United States, upon the opinions of counsel satisfactory to Merrill
Lynch (which opinions shall be dated and furnished to Merrill Lynch at the
Closing Time, shall be satisfactory in form and substance to counsel for the
Underwriters and shall expressly state that the Underwriters may rely on such
opinions as if they were addressed to them), provided that Sidley & Austin shall
state in their opinion that they believe that they and the Underwriters are
justified in relying upon such opinions. Such opinion shall not state that it
is to be governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
(2) The opinion, dated as of Closing Time, of Koteen and Naftalin,
special counsel to the Company, in form and substance reasonably
satisfactory to counsel for the Underwriters, to the effect that:
(i) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, the Federal Communications
Commission (the "FCC"), is necessary or required for the due authorization,
execution or delivery by the Company of this Underwriting Agreement or the
applicable Terms Agreement or for the performance by the Company of the
transactions contemplated under the Prospectus, this Underwriting
Agreement, such Terms Agreement or the Indenture.
(ii) The execution and delivery of this Underwriting Agreement,
the applicable Terms Agreement and the Indenture, the issuance of the
Underwritten Securities, the compliance by the Company with all of the
provisions of the Underwritten Securities, the Indenture, this Underwriting
Agreement and the applicable Terms Agreement and the consummation of the
transactions contemplated herein, therein and in the Registration Statement
and the Prospectus (including the issuance and sale of the Underwritten
Securities as described under the caption "Use of Proceeds") do not and
will not, to such counsel's knowledge, conflict with or result in any
violation of, or the creation of any lien, charge or encumbrance upon, the
property or assets of the Company or, to such counsel's knowledge, its
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.
-16-
(3) The opinion, dated as of Closing Time, of Mayer, Brown & Platt,
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters, with respect to the matters
set forth in (i) (insofar as it relates to the existence and good standing
of the Company), (ii), (v), (vi), (viii), (ix), (x), (xii) (solely as to
the information in the Prospectus under "Description of Debt Securities" or
any caption purporting to describe any such Debt Securities), (xvii) and
the penultimate paragraph of subsection (b)(1) of this Section. In giving
such opinion, such counsel may rely, as to all matters governed by the laws
of jurisdictions other than the law of the State of New York, the State of
Illinois, the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to
Merrill Lynch. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) At Closing Time there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
Merrill Lynch shall have received a certificate of the Chairman, President or
Vice President-Finance of the Company and of the Controller or Treasurer of
the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change with respect to the Company and its
subsidiaries considered as one enterprise, (ii) the representations and
warranties in Section 1(a) are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company
has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been received
by the Company or, to the Company's knowledge, issued and, to the Company's
knowledge, no proceedings for that purpose have been initiated or threatened
by the Commission.
(d) At the time of the execution of the applicable Terms Agreement,
Merrill Lynch shall have received from Arthur Andersen LLP a letter dated such
date, in form and substance satisfactory to Merrill Lynch, together with signed
or reproduced copies of such letter for each of the other Underwriters,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(e) At Closing Time, Merrill Lynch shall have received from Arthur
Andersen LLP a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished pursuant to subsection (d)
of this Section, except that the specified date referred to shall be a date not
more than three business days prior to Closing Time.
(f) At Closing Time counsel for the Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Underwritten
Securities, as contemplated herein, and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Securities shall be reasonably satisfactory in form and substance
to Merrill Lynch and counsel for the Underwriters.
-17-
(g) At Closing Time, the Underwritten Securities shall have the ratings
accorded by any "nationally recognized statistical rating organization", as
defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act
Regulations (a "NRSRO"), if and as specified in the applicable Terms Agreement.
(h) At Closing Time, the Underwritten Securities shall have been approved
for listing, subject only to official notice of issuance, if and as specified in
the applicable Terms Agreement.
(i) If the Registration Statement or an offering of Underwritten
Securities has been filed with the NASD for review, the NASD shall not have
raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Underwriting Agreement and the
applicable Terms Agreement may be terminated by Merrill Lynch by notice to the
Company at any time at or prior to Closing Time and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be part of the Registration Statement, if
applicable, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by Merrill Lynch), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
-18-
provided, however, that (A) this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) and (B) this indemnity agreement, with respect to any preliminary
prospectus, does not apply to any loss, liability, claim, damage or expense if a
copy of the Prospectus (as then amended or supplemented, if the Company shall
have furnished any amendments or supplements thereto to an Underwriter) was not
sent or given by or on behalf of such Underwriter to the person asserting any
such loss, liability, claim, damage or expense if such is required by law at or
prior to the written confirmation of the sale of such Underwritten Securities to
such person and if the Prospectus (as so amended or supplemented) would have, as
determined by a court of competent jurisdiction, cured the defect giving rise to
such loss, liability, claim, damage or expense.
(b) Each Underwriter severally 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 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. 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.
Subject to Section 6(d) below, no indemnifying or indemnified party shall,
without the prior written consent of the other parties (which consent shall not
be unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not any such parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified and
indemnifying party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
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or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified or indemnifying party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Underwritten Securities pursuant to the applicable Terms
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of such Underwritten Securities as set
forth on such cover.
The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be
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deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the aggregate principal amount of Underwritten Securities set
forth opposite their respective names in the applicable Terms Agreement, and not
joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement, or contained in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of and payment for the Underwritten Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) This Underwriting Agreement (excluding the applicable Terms Agreement)
may be terminated for any reason at any time by the Company or by Merrill Lynch
upon the giving of 30 days' prior written notice of such termination to the
other party hereto.
(b) Merrill Lynch may terminate the applicable Terms Agreement, by notice
to the Company, at any time at or prior to the Closing Time, if (i) there has
been, since the time of execution of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or, if the Underwritten
Securities include Debt Securities denominated or payable in, or indexed to, one
or more foreign or composite currencies, in the international financial markets,
or any outbreak of hostilities or escalation thereof or other calamity or crisis
or any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the reasonable judgment of Merrill
Lynch, impracticable to market
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the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) trading in any securities of the Company
has been suspended or materially limited by the Commission or the American
Stock Exchange, or if trading generally on the New York Stock Exchange or the
American Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by either of said
exchanges or by such system or by order of the Commission, the NASD or any
other governmental authority, or (iv) a banking moratorium has been declared
by either Federal or New York authorities or, if the Underwritten Securities
include Debt Securities denominated or payable in, or indexed to, one or more
foreign or composite currencies, by the relevant authorities in the related
foreign country or countries, or (v) there has occurred, since the time of
execution of such Terms Agreement, a downgrading in, or withdrawal of, the
rating assigned to the Underwritten Securities or any of the Company's other
debt securities by a NRSRO, or any such NRSRO shall have publicly announced
that it has under surveillance or review with possible negative implications
its rating of the Underwritten Securities or any of the Company's other debt
securities.
(c) If this Underwriting Agreement or the applicable Terms Agreement is
terminated pursuant to this Section 9, such termination shall be without
liability of any party to any other party except as provided in Section 4
hereof, and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then Merrill Lynch shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, Merrill Lynch shall not have
completed such arrangements within such 24-hour period, then:
(a) if the aggregate principal amount of Defaulted Securities does not
exceed 10% of the aggregate principal amount of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
under such Terms Agreement bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Securities exceeds 10%
of the aggregate principal amount of Underwritten Securities to be purchased on
such date pursuant to such Terms Agreement, such Terms Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
the applicable Terms Agreement, either Merrill Lynch or the Company shall have
the right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at Merrill Lynch & Co., 5500
Sears Tower,
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Chicago, Illinois 60606, attention of Steve Moss; notices to the
Company shall be directed to it at United States Cellular Corporation, 8410 West
Bryn Mawr, Suite 700, Chicago, Illinois 60631-3486; Attention: Senior Vice
President-Finance and Treasurer.
SECTION 12. PARTIES. This Underwriting Agreement and the applicable
Terms Agreement shall each inure to the benefit of and be binding upon
Merrill Lynch, the Company, and, upon execution of such Terms Agreement, any
other Underwriters and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement or such Terms Agreement is intended
or shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and
7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Underwriting Agreement or such
Terms Agreement or any provision herein or therein contained. This
Underwriting Agreement and such Terms Agreement and all conditions and
provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors,
and said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Underwritten Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Underwriting Agreement, along with all counterparts, will become a binding
agreement between Merrill Lynch and the Company in accordance with its terms.
Very truly yours,
UNITED STATES CELLULAR CORPORATION
By _________________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By ___________________________________
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Exhibit A
UNITED STATES CELLULAR CORPORATION
(a Delaware corporation)
DEBT SECURITIES
TERMS AGREEMENT
To: United States Cellular Corporation
8410 West Bryn Mawr Avenue
Suite 700
Chicago, IL 60631-3486
Ladies and Gentlemen:
We understand that United States Cellular Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell $ aggregate
principal amount of its senior debt securities (the "Debt Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, we [the underwriters named below (the "Underwriters")] offer to
purchase [, severally and not jointly,] the principal amount of Debt
Securities [opposite their names set forth below] at the purchase price set
forth below.
Principal Amount
UNDERWRITER of Debt Securities
_______________
Total $
================
The Debt Securities shall have the following terms:
Title:
Rank:
Ratings:
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering, initial public offering price per security:
____% of the principal amount, plus accrued interest [amortized original
issue discount], if any, from _________________.
Purchase price per security: ___% of principal amount, plus accrued interest
[amortized original issue discount], if any, from _________________.
Form:
Other terms and conditions:
Closing date and location:
All of the provisions contained in the document attached as Annex I hereto
entitled "UNITED STATES CELLULAR CORPORATION--Debt Securities--Underwriting
Agreement" are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined.
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on ______________ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ___________________________________
Authorized Signatory
[Acting on behalf of itself and the other named
Underwriters.]
Accepted:
UNITED STATES CELLULAR CORPORATION
By _____________________________________
Name:
Title:
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