_______________________________________
FIRST SUPPLEMENTAL INDENTURE
Dated as of _______, 1997
Between
TELEPHONE AND DATA SYSTEMS, INC.
and
THE FIRST NATIONAL BANK OF CHICAGO
_______________________________________
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 . . . . . . . . . . . . . . . 4
SECTION 2.5. INTEREST. . . . . . . . . . . . . . . . . . . . . . . . . . 5
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
SECTION 6.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. . . . . . . . . . . .12
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SECTION 6.4. SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . .13
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 _________, 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 ___% Junior Subordinated Deferrable Interest Debentures due
________, ____ (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 $___________ aggregate stated liquidation
amount of its Trust Originated Preferred Securities (the "Preferred Securities")
and has offered to the Company $_________ 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 $___________ 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 ________,
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 "___% Junior Subordinated
Deferrable Interest Debentures due ________, 2027," limited in aggregate
principal amount to $___________, 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 ________, 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 payment of the principal of and interest (including Compounded
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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 authentication and delivery in
accordance with the Indenture and this First Supplemental Indenture. On
issue of such
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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
___% 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 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
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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.
(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
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time to time, on or after ________, 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 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
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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
date on which Distributions on the Trust Securities issued by the Trust are
payable, or (ii) the date the Trust is required to give
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notice of the record or payment date for such Distributions to the New York
Stock Exchange or other applicable self-regulatory organization or to holders of
the Preferred Securities issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Property Trustee is not the only holder of the
Subordinated Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the holders of the Subordinated
Debentures and the Trustee written notice of its selection of such Extended
Interest Payment Period ten (10) Business Days before the earlier of (i) the
next succeeding Interest Payment Date, or (ii) the date the Company is required
to give notice of the record or payment date of such interest payment to the New
York Stock Exchange or other applicable self-regulatory organization or to
holders of the Subordinated Debentures, but in any event at least two Business
Days before such record date.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the twenty quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES. In connection with the offering,
sale and issuance of the Subordinated Debentures to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, the Company
shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Subordinated Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 7.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust,
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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
principal (including redemption payments) of, or premium, if any, or interest
on the Subordinated Debentures.
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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
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.
-12-
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 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.
-13-
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 all amounts owing on the Subordinated Debentures shall be paid in full;
and, for the purposes of such subrogation, no payments or distributions to
the holders of such Senior Indebtedness of any cash, property or securities
to which the holders of the Subordinated Debentures or the Trustee would be
entitled except for the provisions of this Article VI, and no payment over
pursuant to the provisions of this Article VI, to or for the benefit of the
holders of such Senior Indebtedness by holders of the Subordinated Debentures
or the Trustee, shall, as between the Company, its creditors other than
holders of Senior Indebtedness of the Company, and the holders of the
Subordinated Debentures be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article VI are and are intended solely for the purposes of defining the
relative rights of the holders of the Subordinated Debentures, on the one
hand, and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article VI or elsewhere in this Indenture or
in the Subordinated Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the holders of the Subordinated Debentures, the obligation of the
Company which is absolute and unconditional, to pay to the holders of the
Subordinated Debentures the principal of (and premium, if any) and interest on
the Subordinated Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Subordinated Debentures and creditors of the
Company, other than the holders of Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Trustee or the holder of any Subordinated
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under the Indenture, subject to the rights, if any, under this
Article VI of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article VI, the Trustee, subject to the provisions of Section 7.01 of
the Indenture, and the holders of the Subordinated Debentures, shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction
-14-
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 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.
-15-
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.
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
-16-
failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of the Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the holders of the
Subordinated Debentures, without incurring responsibility to the holders of the
Subordinated Debentures and without impairing or releasing the subordination
provided in this Article VI or the obligations hereunder of the holders of the
Subordinated Debentures to the holders of such Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or any
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
ARTICLE VII
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. LISTING ON EXCHANGE. If the Subordinated Debentures
are to be issued as a Global Security in connection with the distribution of
the Subordinated Debentures to the holders of the Preferred Securities issued
by the Trust upon the dissolution of the Trust, the Company will use its best
efforts to list such Subordinated Debentures on the American Stock Exchange
or on such other exchange as the Preferred Securities are then listed.
ARTICLE VIII
FORM OF SUBORDINATED DEBENTURE
SECTION 8.1. FORM OF SUBORDINATED DEBENTURE. The Subordinated
Debentures and the Trustee's Certificate of
-17-
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 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) 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.]
-18-
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 LONGER REPRESENTED BY A GLOBAL
SECURITY -- which shall be the
-19-
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 hereafter incurred, and waives reliance by each such holder
upon said provisions.
-20-
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
-22-
(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 shall be paid prior to 12:00 noon, New York time,
on the date of
-23-
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 of the holders of each Subordinated
Debenture then outstanding
-24-
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 Register of the Company, upon surrender of this
Subordinated
-25-
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 set forth, Subordinated Debentures of this
series [so issued] are exchangeable for a like aggregate principal amount of
-26-
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 $___________ 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.
SECTION 10.4. SEPARABILITY. In case any one or more of the
provisions contained in this First Supplemental Indenture
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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:_______________________________
Name:
Title:
[Corporate Seal]
Attest:
Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity
but solely as Trustee
By:_______________________________
Title:
Name:
[Corporate Seal]
Attest:
Title:
STATE OF ILLINOIS )
COUNTY OF XXXX ) 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 XXXX ):
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
