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FIRST SUPPLEMENTAL INDENTURE
Dated as of November 18, 1997
Between
TELEPHONE AND DATA SYSTEMS, INC.
and
THE FIRST NATIONAL BANK OF CHICAGO
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ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS . . . . . . . . . . . . . . 2
SECTION 1.2. INTERPRETATION. . . . . . . . . . . . . . . . . 3
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE SUBORDINATED DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT. . . . . . . . 4
SECTION 2.2. MATURITY. . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. FORM AND PAYMENT. . . . . . . . . . . . . . . . 4
SECTION 2.4. GLOBAL SUBORDINATED DEBENTURE . . . . . . . . . 5
SECTION 2.5. INTEREST. . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. TAX EVENT REDEMPTION. . . . . . . . . . . . . . 7
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY. . . . . . . . . 7
SECTION 3.3. NO SINKING FUND . . . . . . . . . . . . . . . . 8
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD. . . . . . 8
SECTION 4.2. NOTICE OF EXTENSION . . . . . . . . . . . . . . 9
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES . . . . . . . . . . . . . .10
ARTICLE VI
SUBORDINATION
SECTION 6.1. AGREEMENT TO SUBORDINATE. . . . . . . . . . . .11
SECTION 6.2. DEFAULT ON SENIOR INDEBTEDNESS. . . . . . . . .11
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SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. . . . . .12
SECTION 6.4. SUBROGATION . . . . . . . . . . . . . . . . . .14
SECTION 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION . . . . . .15
SECTION 6.6. NOTICE BY THE COMPANY . . . . . . . . . . . . .15
SECTION 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS . . . . . . . . . . . . . . . . .16
SECTION 6.8. SUBORDINATION MAY NOT BE IMPAIRED . . . . . . .16
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE . . . . . . . . . . . . . .17
ARTICLE VIII
FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE. . . . . . . . .17
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF SUBORDINATED DEBENTURES . . .27
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE. . . . . . . . . . .27
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS . . . . .27
SECTION 10.3. GOVERNING LAW. . . . . . . . . . . . . . . . .27
SECTION 10.4. SEPARABILITY . . . . . . . . . . . . . . . . .27
SECTION 10.5. COUNTERPARTS . . . . . . . . . . . . . . . . .28
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of November 18, 1997
(the "FIRST SUPPLEMENTAL INDENTURE"), between Telephone and Data Systems,
Inc., an Iowa corporation (the Company"), and The First National Bank of
Chicago, a national banking association, duly organized and existing under
the laws of the United States, as trustee (the Trustee") under the Indenture
dated as of October 15, 1997 between the Company and the Trustee (the
Indenture").
W I T N E S S E T H:
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities, to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
as provided in the Indenture; and
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a new series of its Debt
Securities to be known as its 8.50% Junior Subordinated Deferrable Interest
Debentures due December 31, 2037 (the "Subordinated Debentures"), the form
and substance of which and the terms, provisions and conditions thereof to be
set forth as provided in the Indenture and this First Supplemental Indenture;
and
WHEREAS, TDS Capital I, a Delaware statutory business trust (the
Trust"), has offered to the public $150,000,000 aggregate stated liquidation
amount of its Trust Originated Preferred Securities (the "Preferred
Securities") and has offered to the Company $4,640,000 aggregate stated
liquidation amount of its Trust Originated Common Securities (the "Common
Securities"), such Preferred Securities and Common Securities representing
undivided beneficial interests in the assets of the Trust, and proposes to
invest the proceeds from such offering in $154,640,000 aggregate principal
amount of the Subordinated Debentures; and
WHEREAS, the Company has requested the Trustee to execute and
deliver this First Supplemental Indenture, and all requirements necessary to
make this First Supplemental Indenture a valid instrument, in accordance with
its terms, and to make the Subordinated Debentures, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations
of the Company, have been performed, and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects;
NOW, THEREFORE, in consideration of the purchase and acceptance of
the Subordinated Debentures by the holder thereof, and for the purpose of
setting forth, as provided in the Indenture, the form and substance of the
Subordinated Debentures and the terms, provisions and conditions thereof, the
Company covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, (a) a term defined in the Indenture has the same meaning when used
in this First Supplemental Indenture; (b) a term defined anywhere in this
First Supplemental Indenture has the same meaning throughout; and (c) the
following terms have the meanings given to them in the Declaration: (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Redemption Tax Opinion; (iv)
Preferred Security Certificate; (v) Property Trustee; (vi) Pro Rata; (vii)
Regular Trustees; and (viii) Tax Event.
In addition, the following terms have the following respective
meanings:
DECLARATION:
The term "Declaration" shall mean the Amended and Restated
Declaration of Trust of TDS Capital I, a Delaware business trust, dated as of
November 18, 1997.
MATURITY DATE:
The term "Maturity Date" shall mean the date on which the
Subordinated Debentures mature and on which the principal shall be due and
payable together with all accrued and unpaid interest thereon including
Compounded Interest (as defined in Section 4.1) and Additional Interest (as
defined in Section 2.5(c)), if any.
SENIOR INDEBTEDNESS:
The term "Senior Indebtedness" shall mean (i) any payment in
respect of (A) indebtedness of the Company for money borrowed and (B)
indebtedness evidenced by securities, debentures, bonds, notes or other
similar instruments issued by the Company; (ii) all capital lease obligations
of the Company; (iii) all obligations of the Company issued or assumed as the
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deferred purchase price of property, all conditional sale obligations of the
Company and all of its obligations under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of business);
(iv) all obligations of the Company for reimbursement on any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons for the payment of which the Company is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any lien on any property or asset of the Company (whether
or not such obligation is assumed by the Company), except for (1) the
Subordinated Debentures and any other indebtedness that is by its terms
subordinated to or pari passu with the Subordinated Debentures, as the case
may be, including all other debt securities and guarantees in respect of
those debt securities, issued to any other trusts, partnerships or any other
entity affiliated with the Company which is a financing vehicle of the
Company ("Financing Entity") in connection with an issuance of preferred
securities by such Financing Entity or other securities which rank pari passu
with, or junior to, the Preferred Securities, and (2) any indebtedness
between or among the Company and its Affiliates.
SECTION 1.2. INTERPRETATION. Each definition in this First
Supplemental Indenture includes the singular and the plural, and references
to the neuter gender include the masculine and feminine where appropriate.
Terms which relate to accounting matters shall be interpreted in accordance
with generally accepted accounting principles in effect from time to time.
References to any statute mean such statute as amended at the time and
include any successor legislation. The word "or" is not exclusive, and the
words "herein," "hereof" and "hereunder" refer to this First Supplemental
Indenture as a whole. The headings to the Articles and Sections are for
convenience of reference and shall not affect the meaning or interpretation
of this First Supplemental Indenture. References to Articles and Sections
mean the Articles and Sections of this First Supplemental Indenture unless
otherwise specified.
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ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE SUBORDINATED DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT. There is hereby
authorized a series of Debt Securities designated the "8.50% Junior
Subordinated Deferrable Interest Debentures due December 31, 2037," limited
in aggregate principal amount to $154,640,000, which amount shall be as set
forth in any written order of the Company for the authentication and delivery
of such Debt Securities pursuant to Section 2.04 of the Indenture.
SECTION 2.2. MATURITY. The Maturity Date will be the Stated
Maturity Date provided that the Company may at its option at any time prior
to the Stated Maturity Date extend the Maturity Date to a date not later than
December 31, 2046; PROVIDED, HOWEVER, that at the time such election is made
and at the effective time of such extension (as specified by the Company) (i)
the Company is not in bankruptcy, otherwise insolvent or in liquidation, (ii)
the Company is not in default in the payment of any interest or principal on
the Subordinated Debentures, and (iii) in the case of Subordinated Debentures
held by the Trust, the Trust is not in arrears on payments of Distributions
and no deferred Distributions are accumulated. In the event the Company
elects to extend the stated maturity of the Subordinated Debentures, it shall
give notice of any such change to the Trustee, and the Trustee shall give
notice of such extension to the Holders of the Subordinated Debentures, not
more than 90 and not less than 30 days prior to the effective time of such
extension.
SECTION 2.3. FORM AND PAYMENT. Except as provided in Section 2.4,
the Subordinated Debentures shall be issued in fully registered certificated
form without interest coupons. Principal and interest on the Subordinated
Debentures issued in certificated form will be payable, the transfer of such
Subordinated Debentures will be registrable and such Subordinated Debentures
will be exchangeable for Subordinated Debentures bearing identical terms and
provisions at the office or agency of the Trustee in Chicago, Illinois,
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to the registered holder at such address as shall
appear in the Security Register or by wire transfer to such account as may
have been appropriately designated by such holder. Notwithstanding the
foregoing, so long as the registered holder of any Subordinated Debentures is
the Property Trustee, the
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payment of the principal of and interest (including Compounded Interest and
Additional Interest, if any) on such Subordinated Debentures held by the
Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee. The Subordinated Debentures will be
denominated in U.S. dollars and payments of principal and interest on the
Subordinated Debentures shall be made in U.S. dollars.
SECTION 2.4. GLOBAL SUBORDINATED DEBENTURE. In connection with
the dissolution of the Trust:
(a) the Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee in exchange for a Global
Security in an aggregate principal amount equal to the aggregate principal
amount of the Subordinated Debentures so presented, to be registered in
the name of the Depositary, or its nominee, and delivered by the Trustee
to the Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Regular Trustees. The Company, upon
any such presentation, shall execute a Global Security in such aggregate
principal amount and deliver the same to the Trustee for authentication
and delivery in accordance with the Indenture and this First Supplemental
Indenture. Payments on the Subordinated Debentures issued as a Global
security will be made to the Depositary; and
(b) if any Preferred Securities are held in non book-entry
certificated form, the Subordinated Debentures in certificated form may be
presented to the Trustee by the Property Trustee and any Preferred
Security Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee ("Non Book-
Entry Preferred Securities") will be deemed to represent beneficial
interests in Subordinated Debentures presented to the Trustee by the
Property Trustee having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security Certificates are presented to the
Security Registrar for transfer or reissuance at which time such Preferred
Security Certificates will be cancelled and a Subordinated Debenture,
registered in the name of the holder of the Preferred Security Certificate
or the transferee of the holder of such Preferred Security Certificate, as
the case may be, with an aggregate principal amount equal to the aggregate
stated liquidation amount of the Preferred Security Certificate cancelled,
will be executed by the Company and delivered to the Trustee for
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authentication and delivery in accordance with the Indenture and this
First Supplemental Indenture. On issue of such Subordinated Debentures,
Subordinated Debentures with an equivalent aggregate principal amount that
were presented by the Property Trustee to the Trustee will be deemed to
have been cancelled.
SECTION 2.5. INTEREST.
(a) Each Subordinated Debenture will bear interest at the rate of
8.50% per annum (the "Coupon Rate") from the original date of issuance until
the principal thereof becomes due and payable, and on any overdue principal
and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article IV)
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing on December 31,
1997, to the Person in whose name such Subordinated Debenture or any
predecessor Subordinated Debenture is registered, at the close of business on
the regular record date for such interest installment, which shall be the
close of business on the Business Day next preceding that Interest Payment
Date. If pursuant to the provisions of Section 2.11(c) of the Indenture the
Subordinated Debentures are no longer represented by a Global Security, the
Company may select a regular record date for such interest installment which
shall be any date at least fifteen days before an Interest Payment Date.
(b) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that
any date on which interest is payable on the Subordinated Debentures is not a
Business Day, then payment of interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed in such a
90-day quarter.
(c) If at any time while the Property Trustee is the holder of any
Subordinated Debentures, the Trust or the Property Trustee is required to pay
any taxes, duties, assessments or
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governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in any
case, the Company will pay as additional interest ("Additional Interest") on
the Subordinated Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the
Trust and the Property Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
ARTICLE III
REDEMPTION OF THE SUBORDINATED DEBENTURES
SECTION 3.1. TAX EVENT REDEMPTION. If a Tax Event has occurred
and is continuing and the Company has received a Redemption Tax Opinion,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the
Company shall have the right upon not less than 30 days' nor more than 60
days' notice to the registered holders of the Subordinated Debentures to
redeem the Subordinated Debentures, in whole but not in part, for cash within
90 days following the occurrence of such Tax Event (the "90 Day Period") at a
redemption price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon to the date of such redemption (the
"Redemption Price") PROVIDED THAT, if at the time there is available to the
Company the opportunity to eliminate, within the 90 Day Period, the Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a
form or making an election, or pursuing some other similar reasonable measure
that has no adverse effect on the Company, the Trust or the Holders of the
Trust Securities issued by the Trust, the Company shall pursue such
Ministerial Action in lieu of redemption; and PROVIDED FURTHER, that the
Company shall have no right to redeem the Subordinated Debentures while the
Trust is pursuing any Ministerial Action pursuant to its obligations under
the Declaration. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the
Company determines and specifies in the notice of redemption, provided the
Company shall deposit with the Trustee an amount sufficient to pay the
Special Redemption Price by 11:00 a.m. on the date such Redemption Price is
to be paid.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
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(a) Subject to the provisions of Article III of the Indenture and
to Section 3.2(b), the Company shall have the right to redeem the
Subordinated Debentures, in whole or in part, from time to time, on or after
November 18, 2002, at the Redemption Price. Any redemption pursuant to this
paragraph will be made upon not less than 30 days' nor more than 60 days'
notice to the registered holder of the Subordinated Debentures, at the
Redemption Price. If the Subordinated Debentures are only partially redeemed
pursuant to this Section 3.2, the Subordinated Debentures will be redeemed
pro rata or by lot or by any other method utilized by the Trustee; PROVIDED,
that if at the time of redemption, the Subordinated Debentures are registered
as a Global Security, the Depositary shall determine by lot the principal
amount of such Subordinated Debentures held by each holder to be redeemed.
The Redemption Price shall be paid prior to 12:00 noon, New York time, on the
date of such redemption or at such earlier time as the Company determines and
specifies in the notice of redemption, provided the Company shall deposit
with the Trustee an amount sufficient to pay the Redemption Price by 11:00
a.m. on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Subordinated Debentures would
result in the delisting of the Preferred Securities issued by the Trust from
any national securities exchange or other organization on which the Preferred
Securities are then listed, the Company shall not be permitted to effect such
partial redemption and may only redeem the Subordinated Debentures in whole.
SECTION 3.3. NO SINKING FUND. The Subordinated Debentures are not
entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD. The Company
shall have the right, at any time and from time to time during the term of
the Subordinated Debentures, to extend the interest payment period of such
Subordinated Debentures for up to twenty (20) consecutive quarters (the
"Extended Interest Payment Period"); provided, that, during any such Extended
Interest Payment Period, (a) the Company may not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of Company common stock
in connection with
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the satisfaction by the Company of its obligations under any employee benefit
plans or any other contractual obligation of the Company (other than a
contractual obligation ranking PARI PASSU with or junior to the Subordinated
Debentures), (ii) as a result of a reclassification of Company capital stock
or the exchange or conversion of one class or series of Company capital stock
for another class or series of Company capital stock or (iii) the purchase of
fractional interests in shares of Company capital stock pursuant to the
conversion or exchange provisions of such Company capital stock or the
security being converted or exchanged), (b) the Company may not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by the Company which
rank PARI PASSU with or junior to the Subordinated Debentures and (c) the
Company may not make any guarantee payments with respect to the foregoing
(other than pursuant to the Preferred Securities Guarantee). To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this
Section 4.1, will bear interest compounded quarterly at the Coupon Rate for
each quarter of the Extended Interest Payment Period ("Compounded Interest").
At the end of the Extended Interest Payment Period, the Company shall pay all
interest accrued and unpaid on the Subordinated Debentures, including any
Compounded Interest and Additional Interest ("Deferred Interest") which shall
be payable to the holders of the Subordinated Debentures in whose names the
Subordinated Debentures are registered in the Security Register on the first
record date after the end of the Extended Interest Payment Period. Prior to
the termination of any Extended Interest Payment Period, the Company may
further extend such period, PROVIDED that such period together with all such
further extensions thereof shall not exceed twenty (20) consecutive quarters
or extend beyond the maturity of the Subordinated Debentures. Upon the
termination of any Extended Interest Payment Period and upon the payment of
all Deferred Interest then due, the Company may select a new Extended
Interest Payment Period, subject to the foregoing requirements. No interest
shall be due and payable during an Extended Interest Payment Period, except
at the end thereof.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to both the Regular
Trustees and the Property Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next succeeding
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date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give notice of the record
or payment date for such Distributions to the New York Stock Exchange or
other applicable self-regulatory organization or to holders of the Preferred
Securities issued by the Trust, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the holders of the Subordinated
Debentures and the Trustee written notice of its selection of such Extended
Interest Payment Period ten (10) Business Days before the earlier of (i) the
next succeeding Interest Payment Date, or (ii) the date the Company is
required to give notice of the record or payment date of such interest
payment to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Subordinated Debentures, but in any event
at least two Business Days before such record date.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the
twenty quarters permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES. In connection with the
offering, sale and issuance of the Subordinated Debentures to the Property
Trustee in connection with the sale of the Trust Securities by the Trust, the
Company shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Subordinated Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and ex-
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penses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses
and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
ARTICLE VI
SUBORDINATION
SECTION 6.1. AGREEMENT TO SUBORDINATE. The Company covenants and
agrees, and each holder of Subordinated Debentures issued hereunder by such
holder's acceptance thereof likewise covenants and agrees, that all
Subordinated Debentures shall be issued subject to the provisions of this
Article VI; and each holder of a Subordinated Debenture, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to
be bound by such provisions.
The payment by the Company of the principal of, premium, if any,
and interest on all Subordinated Debentures issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and subject
in right of payment to the prior payment in full of all Senior Indebtedness
of the Company, whether outstanding at the date of this First Supplemental
Indenture or thereafter incurred.
No provision of this Article VI shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 6.2. DEFAULT ON SENIOR INDEBTEDNESS. In the event and
during the continuation of any default by the Company in the payment of
principal, premium, interest or any other payment due on any Senior
Indebtedness of the Company, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, then,
in either case, no payment shall be made by the Company with respect to the
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principal (including redemption payments) of, or premium, if any, or interest
on the Subordinated Debentures.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any holder of Subordinated Debentures when such
payment is prohibited by the preceding paragraph of this Section 6.2, such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant
to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the holders of
the Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee within 90 days of such payment of the amounts
then due and owing on the Senior Indebtedness and only the amounts specified
in such notice to the Trustee shall be paid to the holders of Senior
Indebtedness.
SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any
payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership
or other proceedings, all amounts due upon all Senior Indebtedness shall
first be paid in full, or payment thereof provided for in money in accordance
with its terms, before any payment is made by the Company on account of the
principal (and premium, if any) or interest on the Subordinated Debentures;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the
holders of the Subordinated Debentures or the Trustee would be entitled to
receive from the Company, except for the provisions of this Article VI, shall
be paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
holders of the Subordinated Debentures or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Indebtedness of
the Company (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, as calculated by the Company) or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
to the extent necessary to pay such Senior Indebtedness in full, in money or
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money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the holders of Subordinated Debentures or to the
Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee or the holders of the Subordinated Debentures before all
Senior Indebtedness of the Company is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit
of the holders of such Senior Indebtedness.
For purposes of this Article VI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article VI with respect to the Subordinated Debentures to the payment of all
Senior Indebtedness of the Company that may at the time be outstanding,
PROVIDED that (i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for
in Article X of the Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 6.3 if such
other corporation shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions stated in Article X of the Indenture.
Nothing in
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Section 6.2 or in this Section 6.3 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.06 of the Indenture.
SECTION 6.4. SUBROGATION. Subject to the payment in full of all
Senior Indebtedness of the Company, the rights of the holders of the
Subordinated Debentures shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to such Senior Indebtedness
until the all amounts owing on the Subordinated Debentures shall be paid in
full; and, for the purposes of such subrogation, no payments or distributions
to the holders of such Senior Indebtedness of any cash, property or
securities to which the holders of the Subordinated Debentures or the Trustee
would be entitled except for the provisions of this Article VI, and no
payment over pursuant to the provisions of this Article VI, to or for the
benefit of the holders of such Senior Indebtedness by holders of the
Subordinated Debentures or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness of the Company, and the
holders of the Subordinated Debentures be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that
the provisions of this Article VI are and are intended solely for the
purposes of defining the relative rights of the holders of the Subordinated
Debentures, on the one hand, and the holders of such Senior Indebtedness on
the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture
or in the Subordinated Debentures is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior Indebtedness of
the Company, and the holders of the Subordinated Debentures, the obligation
of the Company which is absolute and unconditional, to pay to the holders of
the Subordinated Debentures the principal of (and premium, if any) and
interest on the Subordinated Debentures as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holders of the Subordinated Debentures and
creditors of the Company, other than the holders of Senior Indebtedness of
the Company, nor shall anything herein or therein prevent the Trustee or the
holder of any Subordinated Debenture from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject to the
rights, if any, under this Article VI of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company,
received upon the exercise of any such remedy.
-14-
Upon any payment or distribution of assets of the Company referred
to in this Article VI, the Trustee, subject to the provisions of Section 7.01
of the Indenture, and the holders of the Subordinated Debentures, shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the holders of the
Subordinated Debentures, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article VI.
SECTION 6.5. TRUSTEE TO EFFECTUATE SUBORDINATION. Each holder of
a Subordinated Debenture by such holder's acceptance thereof authorizes and
directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article VI and appoints the Trustee such holder's attorney-in-fact for any
and all such purposes.
SECTION 6.6. NOTICE BY THE COMPANY. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to
the Company that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Subordinated Debentures pursuant to the
provisions of this Article VI. Notwithstanding the provisions of this
Article VI or any other provision of the Indenture and this First
Supplemental Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Subordinated Debentures
pursuant to the provisions of this Article VI unless and until a Responsible
Officer of the Trustee shall have received written notice thereof at the
Principal Office of the Trustee from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section
7.01 of the Indenture, shall be entitled in all respects to assume that no
such facts exist; PROVIDED, HOWEVER, that if the Trustee shall not have
received the notice provided for in this Section 6.6 at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of (or premium, if any) or interest on any Subordinated Debenture),
then, anything herein contained to
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the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they
were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 7.01 of the
Indenture, shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness
of the Company (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior indebtedness or a trustee on
behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any Person as a holder of such Senior Indebtedness to
participate in any payment or distribution pursuant to this Article VI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held
by such Person, the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the rights of
such Person under this Article VI, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 6.7. RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article VI in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article VI, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Section 7.01 of the
Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to holders of Subordinated
Debentures, the Company or any other Person money or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this
Article VI or otherwise.
-16-
SECTION 6.8. SUBORDINATION MAY NOT BE IMPAIRED. No right of any
present or future holder of any Senior Indebtedness of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of the
Indenture, regardless of any knowledge thereof that any such holder may have
or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
holders of the Subordinated Debentures, without incurring responsibility to
the holders of the Subordinated Debentures and without impairing or releasing
the subordination provided in this Article VI or the obligations hereunder of
the holders of the Subordinated Debentures to the holders of such Senior In
debtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE. If the Subordinated Debentures
are to be issued as a Global Security in connection with the distribution of
the Subordinated Debentures to the holders of the Preferred Securities issued
by the Trust upon the dissolution of the Trust, the Company will use its best
efforts to list such Subordinated Debentures on the American Stock Exchange
or on such other exchange as the Preferred Securities are then listed.
ARTICLE VIII
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FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE. The Subordinated
Debentures and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms:
(FORM OF FACE OF SUBORDINATED DEBENTURE)
[IF THE SUBORDINATED DEBENTURE IS TO BE A GLOBAL SECURITY, INSERT:
This Subordinated Debenture is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depositary. This Subordinated Debenture is
exchangeable for Subordinated Debentures registered in the name of a person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Subordinated Debenture
(other than a transfer of this Subordinated Debenture as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary) may be registered
except in limited circumstances.
Unless this Subordinated Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the issuer or its agent for registration of transfer, exchange
or payment, and any Subordinated Debenture issued is registered in the name
of Cede & Co. or such other name as requested by an authorized representative
of The Depository Trust Company and any payment hereon is made to Cede & Co.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
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No. $
CUSIP No.
TELEPHONE AND DATA SYSTEMS, INC.
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE ________, ____
TELEPHONE AND DATA SYSTEMS, INC., an Iowa corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _______ or
registered assigns, the principal sum of ____________ Dollars on ________,
____, or such earlier date established by the Company not earlier than March
________, and to pay interest on said principal sum from ________, 1997 or
from the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on March 31,
June 30, September 30 and December 31 of each year commencing, December 31,
1997, at the rate of ___% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest
compounded quarterly at the same rate per annum. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on this Subordinated Debenture is not a Business Day,
then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this
Subordinated Debenture (or one or more Predecessor Securities, as defined in
said Indenture) is registered at the close of business on the regular record
date for such interest installment [which shall be the close of business on
the Business Day next preceding such Interest Payment Date.] [IF PURSUANT TO
THE PROVISIONS OF Section 2.11(C) OF THE INDENTURE THE SUBORDINATED
DEBENTURES ARE NO
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LONGER REPRESENTED BY A GLOBAL SECURITY -- which shall be the close of
business on the ________ day preceding such Interest Payment Date.] Any such
interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the registered holders on such regular
record date, and may be paid to the Person in whose name this Subordinated
Debenture (or one or more Predecessor Securities) is registered at the close
of business on a special record date to be fixed by the Trustee for the
payment of such defaulted interest, notice whereof shall be given to the
registered holders of this series of Subordinated Debentures not less than
ten (10) days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Subordinated Debentures may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Subordinated Debenture shall be payable at the office or
agency of the Trustee maintained for that purpose in Chicago, Illinois, in
any coin or currency of the United States of America which at the time of
payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the holder of
this Subordinated Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Subordinated
Debenture will be made at such place and to such account as may be designated
by the Property Trustee.
The indebtedness evidenced by this Subordinated Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness, and this
Subordinated Debenture is issued subject to the provisions of the Indenture
with respect thereto. Each holder of this Subordinated Debenture, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on behalf of such holder to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided, (c) appoints the Trustee the attorney-in-fact of
such holder for any and all such purposes and (d) agrees to treat this
Subordinated Debenture as indebtedness and not as equity for federal income
tax purposes. Each holder hereof, by acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and
in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or
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hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Subordinated Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by the
Trustee referred to on the reverse side hereof, this Subordinated Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Subordinated Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
-21-
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: ___________
TELEPHONE AND DATA SYSTEMS, INC.
By
[Title]
Attest:
By
Secretary
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debentures of the series of Subordinated
Debentures described in the within-mentioned Indenture.
THE FIRST NATIONAL BANK
------------------------
OF CHICAGO, as Authentication Agent
Not in Its Individual
Capacity But Solely
as Trustee
By By
Authorized Signatory Authorized Signatory
(FORM OF REVERSE OF SUBORDINATED DEBENTURE)
This Subordinated Debenture is one of a duly authorized series of
Subordinated Debentures of the Company (herein sometimes referred to as the
"Subordinated Debentures"), specified in the Indenture, all issued or to be
issued in one or more series under and pursuant to an Indenture dated as of
_______, 1997, duly executed and delivered between the Company and The First
National Bank of Chicago, not in its individual capacity but solely as
trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of _______, 1997 between the Company and the Trustee (the Indenture
as so supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Subordinated Debentures.
By the terms of the Indenture, the Subordinated Debentures are issuable in
series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture provided. This series of Subordinated
Debentures is limited in aggregate principal amount as specified in said
First Supplemental Indenture.
Upon the occurrence and continuation of a Tax Event, in certain
circumstances this Subordinated Debenture will become due and payable at the
principal amount together with any interest accrued thereon (the "Redemption
Price"). The Redemption Price
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shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines. The Company
shall have the right to redeem this Subordinated Debenture at the option of
the Company, without premium or penalty, in whole or in part at any time on
or after March 31, 2002 (an "Optional Redemption"), at the Redemption Price.
Any Optional Redemption pursuant to this paragraph will be made upon not less
than 30 days' nor more than 60 days' notice, at the Redemption Price. If the
Subordinated Debentures are only partially redeemed by the Company pursuant
to an Optional Redemption, the Subordinated Debentures will be redeemed pro
rata or by lot or by any other method utilized by the Trustee; PROVIDED that
if at the time of redemption, the Subordinated Debentures are registered as a
Global Security, the Depositary shall determine by lot the principal amount
of such Subordinated Debentures held by each holder to be redeemed.
In the event of redemption of this Subordinated Debenture in part only,
a new Subordinated Debenture or Subordinated Debentures of this series for
the unredeemed portion hereof will be issued in the name of the holder hereof
upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Subordinated
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Subordinated Debentures of each series
affected at the time Outstanding, as defined in the Indenture, to execute
supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or of modifying in any manner the rights of
the holders of the Subordinated Debentures; PROVIDED, HOWEVER, that no such
supplemental indenture shall (i) extend the fixed maturity of any
Subordinated Debentures of any series, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, without
the consent of the holder of each Subordinated Debenture so affected or (ii)
reduce the aforesaid percentage of Subordinated Debentures, the holders of
which are required to consent to any such supplemental indenture, without the
consent
-24-
of the holders of each Subordinated Debenture then outstanding and affected
thereby. The Indenture also contains provisions permitting the holders of a
majority in aggregate principal amount of the Subordinated Debentures of any
series at the time outstanding affected thereby, on behalf of all of the
holders of the Subordinated Debentures of such series, to waive any past
default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Subordinated
Debentures of such series. Any such consent or waiver by the registered
holder of this Subordinated Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Subordinated Debenture and of any
Subordinated Debenture issued in exchange herefor or in place hereof (whether
by registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Subordinated Debenture.
No reference herein to the Indenture and no provision of this
Subordinated Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on this Subordinated Debenture
at the time and place and at the rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Subordinated Debentures, from time to time to extend the interest payment
period of such Subordinated Debentures for up to twenty (20) consecutive
quarters (an "Extended Interest Payment Period"), at the end of which period
the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Subordinated Debentures to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the
Company may further extend such Extended Interest Payment Period, PROVIDED
that such Extended Interest Payment Period together with all such further
extensions thereof shall not exceed twenty (20) consecutive quarters or
extend beyond the maturity of the Subordinated Debentures. At the
termination of any such Extended Interest Payment Period and upon the payment
of all accrued and unpaid interest then due, the Company may select a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Subordinated Debenture is transferable by the registered
holder hereof on the Security
-25-
Register of the Company, upon surrender of this Subordinated Debenture for
registration of transfer at the office or agency of the Trustee in Chicago,
Illinois, accompanied by a written instrument or instruments of transfer in
form satisfactory to the Company or the Trustee duly executed by the
registered holder hereof or the attorney of such holder duly authorized in
writing, and thereupon one or more new Subordinated Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will
be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Subordinated Debenture, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Subordinated Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if any, and
interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any Security Registrar shall be affected
by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Subordinated Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
[The Subordinated Debentures of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
thereof.] [This Global Security is exchangeable for Subordinated Debentures
in definitive form only under certain limited circumstances set forth in the
Indenture. Subordinated Debentures of this series so issued are issuable only
in registered form without coupons in denominations of $25 and any integral
multiple thereof.] As provided in the Indenture and subject to certain
limitations [herein and] therein
-26-
set forth, Subordinated Debentures of this series [so issued] are
exchangeable for a like aggregate principal amount of Subordinated Debentures
of this series of a different authorized denomination, as requested by the
holder surrendering the same.
All terms used in this Subordinated Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE IX
ORIGINAL ISSUE OF SUBORDINATED DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF SUBORDINATED DEBENTURES. Subordinated
Debentures in the aggregate principal amount of $154,640,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Subordinated Debentures to or upon
the written order of the Company, signed by its Chairman, its President, or
any Vice President and its Treasurer or an Assistant Treasurer, without any
further action by the Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE. The Indenture, as
supplemented by this First Supplemental Indenture, is in all respects
ratified and confirmed, and this First Supplemental Indenture shall be deemed
part of the Indenture in the manner and to the extent herein and therein
provided.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS. The recitals
herein contained are made by the Company and not by the Trustee, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture.
SECTION 10.3. GOVERNING LAW. This First Supplemental Indenture and
each Subordinated Debenture shall be deemed to be a contract made under the
internal laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of said State.
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SECTION 10.4. SEPARABILITY. In case any one or more of the provisions
contained in this First Supplemental Indenture or in the Subordinated
Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this First Supplemental Indenture or
of the Subordinated Debentures, but this First Supplemental Indenture and the
Subordinated Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
SECTION 10.5. COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
TELEPHONE AND DATA SYSTEMS, INC.
By:
----------------------------------
Title:
[Corporate Seal]
Attest:
Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Trustee
By:
----------------------------------
Title:
[Corporate Seal]
Attest:
Title:
STATE OF ILLINOIS )
COUNTY OF COOK ) ss:
On the day of _____, 1997, before me personally came ______________,
to me known, who, being by me duly sworn, did depose and say that he is a
______________ of TELEPHONE AND DATA SYSTEMS, INC., one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto
by like authority.
NOTARY PUBLIC
[seal] Commission expires
STATE OF ILLINOIS )
COUNTY OF COOK ):
On the day of April, 1997, before me personally came ____________,
to me known, who, being by me duly sworn, did depose and say that he is the
____________________ of THE FIRST NATIONAL BANK OF CHICAGO, one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
NOTARY PUBLIC
[seal] Commission expires