S-3

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As filed with the securities and Exchange Commission on October 16, 2001

Registration No. 333-     

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

TELEPHONE AND DATA SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-2669023
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

30 North LaSalle Street
Chicago, Illinois 60602
(312) 630-1900

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

LeRoy T. Carlson, Chairman
Telephone and Data Systems, Inc.
30 North LaSalle Street
Chicago, Illinois 60602
(312) 630-1900 with a copy to:
William S. DeCarlo, Esq.
Sidley Austin Brown & Wood
One First National Plaza
Chicago, Illinois 60603
(312) 853-7000

(Names, addresses, including zip codes, and telephone numbers, including area code, of agent's for service)

Approximate date of commencement of proposed sale to the public:
From time to time after the Registration Statement becomes effective.

   If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / /

   If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. /x/

   If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / 

   If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

   If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per unit	Proposed maximum aggregate offering price	Amount of registration fee
Debt securities	$1,000,000,000(1)	(2)	$1,000,000,000(1)	$250,000(3)

(1)

This Registration Statement also covers (i) contracts which may be issued by the Registrant in connection with the issuance of Debt Securities, including contracts for the delayed delivery of such securities, (ii) such indeterminate amount of debt securities that may be remarketed under a remarketing arrangement, and (iii) such indeterminate amount of securities as may be issued in exchange for the securities registered hereunder. No additional consideration will be received by the registrant for any such contracts, remarketed securities or securities that may be issued in exchange for the Debt Securities. In no event will the aggregate offering price of the securities issued under this Registration Statement exceed $1,000,000,000, or the equivalent thereof in one or more foreign or composite currencies. If any Debt Securities are issued at an original issue discount, then additional Debt Securities may be issued so long as the aggregate initial offering price of all such Debt Securities, together with the initial offering price of all other securities registered and offered hereunder, does not exceed such amount.

(2)

The proposed maximum offering price per unit is omitted pursuant to General Instruction II(D) of Form S-3 Securities Act and will be determined from time to time by the Registrant in connection with the issuance by the Registrant of the securities registered hereunder.

(3)

The registration fee has been calculated in accordance with Regulation 457(o) under the Securities Act of 1933 and reflects the offering price rather than the principal amount of any Debt Securities which may be issued at a discount.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Preliminary, Subject to Completion, Dated            , 2001

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

Telephone and Data Systems, Inc.
Debt Securities

    We may use this prospectus from time to time to offer, on a delayed or periodic basis, debt securities consisting of debentures, notes, bonds and/or other evidences of indebtedness. The aggregate initial offering price of all securities will not exceed U.S. $1,000,000,000 or its equivalent in any other currency or units based on or relating to foreign currencies. We may offer debt securities in one or more series in amounts, at prices and on terms to be determined at the time of sale. The accompanying Prospectus Supplement sets forth the following information about offered securities: the specific designation, aggregate principal amount, currency denomination, maturity, interest rate—which may be fixed or variable, time of payment of interest, if any, any terms for redemption at our option or the holder's option, any terms for sinking fund payments, whether such securities are exchangeable into other securities, the initial public offering price and any other terms of the securities and the offering.

    Securities issued under the Indenture described in this Prospectus are expected to be unsecured and to rank pari passu with all of our other unsecured and unsubordinated indebtedness. As described in this Prospectus, any subordinated debt securities would be issued under a separate indenture.

    The debt securities are expected to be issued only in registered form. All or a portion of the debt securities of any series may be issued to a depository as a global security and may be exchangeable for physical securities only under limited conditions.

    We may sell securities to or through underwriters or dealers, and also may sell securities to other purchasers directly or through agents. The accompanying Prospectus Supplement sets forth the names of any underwriters, dealers or agents involved in the sale of the debt securities offered hereby, the principal amounts, if any, to be purchased by underwriters and the compensation of such underwriters, dealers or agents.

    Our Common Shares are listed for trading on the American Stock Exchange under the symbol "TDS". The relevant Prospectus Supplement will contain information, if applicable, as to whether the debt securities offered will be listed for trading on the American Stock Exchange or on any other securities exchange or other market.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or has passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

The date of this Prospectus is           , 2001

TABLE OF CONTENTS

	Page
FORWARD LOOKING STATEMENTS	2
WHERE YOU CAN FIND MORE INFORMATION	3
SUMMARY	4
TDS	5
USE OF PROCEEDS	5
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES	6
DESCRIPTION OF DEBT SECURITIES	6
PLAN OF DISTRIBUTION	15
LEGAL MATTERS	17
EXPERTS	17

FORWARD LOOKING STATEMENTS

    This Prospectus and the documents incorporated by reference herein contain statements that are not based on historical fact, including the words "believes," "anticipates," "intends," "expects," and similar words. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be significantly different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include:

•

general economic and business conditions, both nationally and in the regions in which TDS operates,

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technology changes,

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competition,

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changes in governmental regulations,

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changes in investments,

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pending and future litigation,

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changes in growth in cellular customers, penetration rates, churn rates, roaming rates and the mix of products and services offered in our markets,

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acquisition/divestiture of properties and/or licenses,

•

changes in growth of ILEC and CLEC customers, churn rates and mix of products and services offered in ILEC and CLEC markets and

•

other factors described or incorporated in this Prospectus.

Investors are encouraged to consider these and other risks and uncertainties that are discussed in documents filed by TDS with the Securities and Exchange Commission and incorporated by reference herein.

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WHERE YOU CAN FIND MORE INFORMATION

    Our Common Shares are listed for trading on the American Stock Exchange under the symbol "TDS". As a result, we file reports, proxy statements and other information with the Securities and Exchange Commission ("SEC"). You may inspect and copy such reports, proxy statements and other information at the public reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information. Such materials also may be accessed electronically by means of the SEC's web site at http://www.sec.gov.

    We filed a Registration Statement related to the offering described in this Prospectus. As allowed by SEC rules, this Prospectus does not contain all of the information which you can find in the Registration Statement. You are referred to the Registration Statement and the Exhibits thereto for further information. This document is qualified in its entirely by such other information.

    The SEC allows us to "incorporate by reference" information into this Prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this Prospectus, except for any information superseded by information in this Prospectus.

    This Prospectus incorporates by reference the documents set forth below that have been previously filed with the SEC. These documents contain important information about our business and finances.

1.

TDS's Annual Report on Form 10-K for the year ended December 31, 2000.



2.

TDS's Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2001.



3.

TDS's Current Reports on Form 8-K filed on January 25, February 2, June 5, June 19 and June 22, 2001.

    This Prospectus also incorporates by reference additional documents that may be filed by us with the SEC between the date of this Prospectus and the date our offering is completed.

You may obtain copies of such documents which are incorporated by reference in this Prospectus (other than exhibits thereto which are not specifically incorporated by reference herein), without charge, upon written or oral request to Investor Relations, Telephone and Data Systems, Inc., 30 N. LaSalle Street, Suite 4000, Chicago, IL 60602, (312) 630-1900. In order to ensure delivery of documents, any request therefor should be made not later than five business days prior to making an investment decision.

You should rely only on the information contained or incorporated by reference in this Prospectus. We have not authorized anyone to provide you with information that is different from what is contained in this Prospectus. You should not assume that the information contained in this Prospectus is accurate as of any date other than the date of such Prospectus, and neither the mailing of this Prospectus to shareholders nor the issuance of any securities hereunder shall create any implication to the contrary. This Prospectus does not offer to buy or sell securities in any jurisdiction where it is unlawful to do so.

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SUMMARY

This summary highlights selected information from this document and does not contain all of the information that is important to you. You should carefully read this entire document and the documents incorporated by reference in this document. See "Where You Can Find More Information."

TDS

    TDS is a diversified telecommunications service company that provides high-quality telecommunications services to more than four million wireless telephone and wireline telephone customers. TDS's business development strategy is to expand its existing operations through internal growth and acquisitions. The address of TDS is 30 North LaSalle Street, Suite 4000, Chicago, Illinois 60602; and its telephone number is (312) 630-1900.

The Securities We May Offer

    We may offer from time to time, on a delayed or continuous basis, up to $1,000,000,000 in debt securities consisting of debentures, notes, bonds and/or other evidences of indebtedness. This Prospectus describes the general terms of the debt securities that we may offer under the terms of the Indenture which has been filed as an exhibit to the registration statement of which this Prospectus is a part.

Rank of Securities

    Securities issued under the Indenture described in this Prospectus are expected to be unsecured and to rank pari passu with all other unsecured and unsubordinated indebtedness of TDS. Any subordinated debt securities would be issued under a separate indenture which would be filed as an exhibit to a post-effective amendment to the registration statement of which this Prospectus is a part and described in a Prospectus Supplement.

Designation and Specific Terms of Series of Securities

    The accompanying Prospectus Supplement sets forth the following information about offered securities: the specific designation, aggregate principal amount, currency denomination, maturity, interest rate—which may be fixed or variable, time of payment of interest, if any, any terms for redemption at our option or the holder's option, any terms for sinking fund payments, whether such securities are exchangeable into other securities, the initial public offering price and any other terms of the securities and the offering.

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TDS

    TDS is a diversified telecommunications service company with wireless telephone and wireline telephone operations. Our business development strategy is to expand our existing operations through internal growth and acquisitions.

    United States Cellular Corporation, an over 80%-owned subsidiary of TDS, operates and invests in wireless telephone companies and properties.

    TDS Telecommunications Corporation, a wholly-owned subsidiary of TDS, operates wireline telephone companies.

    TDS is a Delaware corporation that is the successor to Telephone and Data Systems, Inc., an Iowa corporation. In 1998, the Iowa corporation was merged with and into TDS, with TDS surviving the merger as a Delaware corporation. TDS's corporate headquarters are located at 30 N. LaSalle, Suite 4000, Chicago, Illinois 60602, and its telephone number is (312) 630-1900.

    For current selected financial information, cash dividends paid and other information about TDS, see the TDS Annual Report on Form 10-K for the most recent fiscal year, which includes certain portions of the TDS Annual Report to Shareholders, as incorporated by reference herein. See "Where You Can Find More Information" above.

USE OF PROCEEDS

    Unless otherwise indicated in the Prospectus Supplement, the net proceeds to be received by TDS from the sale of debt securities offered by this Prospectus will be used by us principally in connection with our acquisition, construction and development programs, including reduction of short-term debt incurred in connection therewith, and may also be used for working capital, to reduce existing long-term debt, to provide additional investments in our subsidiaries, and for other corporate purposes. Until the proceeds are used for these purposes, we may deposit them in interest-bearing accounts or invest them in short-term investment securities.

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CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

    The following table sets forth our historical ratios of earnings to fixed charges for each of the years ended December 31, 2000 through 1996 and for the six months ended June 30, 2001.

(Unaudited) Six Months Ended June 30,		Year Ended December 31,
2001(1)		2000	1999	1998	1997	1996
(5.30	)	3.39	5.27	3.60	2.72	4.05

(1)

The dollar amount of the deficiency resulting in a negative ratio is $484.5 million. In the first six months of 2001, TDS recognized a pre-tax loss of $644.9 million as a result of the conversion of its investment in common stock of VoiceStream Wireless Corporation into shares to Deutsche Telekom shares and cash pursuant to a merger of VoiceStream and Deutsche Telekom. This loss was the result of a decline in the market price of VoiceStream common stock between the time TDS acquired such stock on May 4, 2000 and the date of the merger of May 31, 2001. Excluding this amount, the ratio of earnings to fixed charges for the six months ended June 30, 2001 would be 3.08.

    For purposes of calculating this ratio, earnings consist of net income from continuing operations plus income taxes from continuing operations, fixed charges from continuing operations, estimated interest portion of rentals, distributions from minority investments and amortization of non-utility capitalized interest, less equity in undistributed earnings of unconsolidated investments, minority interest in pretax income of subsidiaries that have not incurred fixed charges and non-utility capitalized interest. Fixed charges consist of interest expense, estimated interest portion of rentals and preferred dividend requirements.

DESCRIPTION OF DEBT SECURITIES

    We expect to issue the debt securities under an Indenture to be entered into between TDS and BNY Midwest Trust Company, as Trustee, the form of which has been filed as an exhibit to the registration statement of which this Prospectus is a part. Any subordinated debt securities would be issued under a separate indenture which would be filed as an exhibit to the registration statement by post-effective amendment and would be described in a Prospectus Supplement. The following is a summary of the material terms of the Indenture relating to unsubordinated debt securities.

    The statements contained in this prospectus relating to the Indenture and the debt securities we may issue are summaries and are subject to, and are qualified in their entirety by reference to, all provisions of the Indenture (including those terms made a part of the Indenture by reference to the Trust Indenture Act of 1939) and the other instruments defining the rights of holders of specific debt securities to be filed with the SEC at the time that such debt securities are issued. You should read the Indenture and such other documents for information that may be important to you before you buy any debt securities.

General

    The debt securities that we may issue under the Indenture include debentures, notes, bonds and other evidences of indebtedness.

    The Indenture does not limit the aggregate principal amount of securities, secured or unsecured, which we may issue under the Indenture or otherwise.

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    We may issue debt securities under the Indenture from time to time in one or more series or tranches thereof, as authorized by a resolution of our board of directors and as set forth in a company order or one or more supplemental indentures creating such series.

    Unless otherwise indicated in the applicable Prospectus Supplement, the Indenture also permits us to increase the principal amount of any series of securities previously issued and to issue such increased principal amount.

    The securities may be denominated and payable in foreign currencies or units based on or relating to foreign currencies.

    We will describe any special United States federal income tax considerations applicable to the securities in the Prospectus Supplement relating to those securities.

    Debt securities issued under the Indenture are expected to be unsecured obligations of TDS and to rank pari passu with all other unsecured debt of TDS, except debt that by its terms is subordinated to the unsecured debt of TDS.

    However, TDS is a holding company. As a result, the right of TDS, and hence the right of the creditors of TDS, including the holders of securities, to participate in any distribution of the assets of any subsidiary upon its liquidation or reorganization or otherwise is subject to the prior claims of creditors of such subsidiary, except to the extent that claims of TDS as a creditor of such subsidiary may be recognized.

    The ability of TDS to make payments of principal and interest on the debt securities will be dependent upon the payment to it by its subsidiaries of dividends, loans or advances. As described in the notes to the TDS financial statements incorporated by reference in this Prospectus, such payments by TDS's regulated telephone company subsidiaries are subject to legal and contractual restrictions, primarily contained in the mortgages granted by certain such subsidiaries to the Rural Utilities Service.

    There is no restriction in the Indenture against TDS or its subsidiaries incurring secured or unsecured indebtedness or issuing secured or unsecured securities.

    The debt securities will be our direct obligations and may include debentures, notes, bonds and/or other evidences of indebtedness.

    The Indenture is subject to, and governed by, the Trust Indenture Act of 1939, as amended.

Designation of Terms of Securities

    We will execute a company order and/or a supplemental indenture relating to a particular series of debt securities if and when we issue any debt securities.

    We will describe the particular terms of each series of debt securities in a Prospectus Supplement relating to that series.

    We can issue these securities in one or more series with the same or various maturities, at par, at a premium, or at a discount.

    We will set forth in a Prospectus Supplement relating to any series of debt securities being offered, the aggregate principal amount and the following terms of the debt securities:

•

the title and designation of such debt securities and series;



•

any limitations on the aggregate principal amount of the debt securities of any series;



•

the stated maturity or maturities of such series;

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the date or dates from which interest will accrue, the interest payment dates on which such interest will be payable or the manner of determination of such interest payment dates and the record date for the determination of holders to whom interest is payable on any such interest payment date;



•

the interest rate or rates, which may be fixed or variable, or method of calculation of such rate or rates, for such series;



•

the terms, if any, regarding the redemption, purchase or repayment of such series;



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whether or not the debt securities of such series will be issued in whole or in part in the form of a global security and, if so, the depository for such global security and the related procedures with respect to transfer and exchange of such global security;



•

the form of the debt securities of such series;



•

the maximum annual interest rate, if any, of the debt securities permitted for such series;



•

whether the debt securities of such series shall be subject to periodic offering;



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the currency or currencies, including composite currencies, in which payment of the principal of (and premium, if any) and interest on the debt securities of such series will be payable, if other than dollars;



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any other information necessary to complete the debt securities of such series;



•

the establishment of any office or agency at which the principal of and interest, if any, on debt securities of that series will be payable;



•

if other than denominations of $1,000 or any integral multiple thereof, the denominations in which the debt securities of the series will be issuable;



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the obligations or instruments, if any, which may be eligible for use in defeasance of any debt securities in respect of the debt securities of a series denominated in a currency other than dollars or in a composite currency;



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whether or not the debt securities of such series will be issued as original issue discount securities and the terms thereof, including the portion of the principal amount thereof which will be payable upon declaration of acceleration of the maturity;



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whether the principal of and premium, if any, or interest, if any, on such debt securities is payable, at the election of TDS or the holder thereof, in coin or currency, including composite currencies, other than that in which the debt securities are stated to be payable;



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whether the amount of payment of principal of and premium, if any, or interest, if any, on such debt securities may be determined with reference to an index, formula or other method, or based on a coin or currency other than that in which the debt securities are stated to be payable;



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any addition to, or modification or deletion of, any covenants or terms to the Indenture, including events of default with respect to the debt securities of the series;



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the terms and conditions, if any, pursuant to which the debt securities of the series are secured;



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whether the debt securities of the series will be exchangeable into other securities and, if so, the terms and conditions upon which such securities will be exchangeable; and



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any other terms of such series not inconsistent with the Indenture.

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    We may issue debt securities at a discount below their stated principal amount and provide for less than the entire principal amount of the debt securities to be payable upon declaration of acceleration of maturity. In that event, we will describe any material federal income tax considerations and other material considerations in the applicable prospectus supplement.

Form, Exchange, Registration and Transfer

    Debt securities in definitive form will be issued as registered securities without coupons in denominations of $1,000 unless otherwise specified in the accompanying prospectus supplement and will be authenticated by the Trustee.

    You may present debt securities for registration or transfer, with the form of transfer endorsed thereon duly executed, or exchange, at the office of the security registrar, without service charge and upon payment of any taxes and other governmental charges.

    Such transfer or exchange will be effected upon TDS or the security registrar being satisfied with the documents of title and identity of the person making the request.

    It is expected that the security register will be maintained by the Trustee at its offices in New York, New York.

    We may change the securities registrar and the place for registration of transfer and exchange of the debt securities and may designate one or more additional places for such registration and exchange.

    We will not be required to:

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issue, register the transfer of or exchange any debt security during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the outstanding debt securities and ending at the close of business on the day of such mailing, or



•

register the transfer of or exchange any debt securities or portions thereof called for redemption in whole or in part.

Payment and Paying Agents

    You will receive payment of principal of and premium, if any, on any debt security only against surrender by you to the paying agent of such debt security.

    Principal of and any premium and interest on any debt security will be payable at the office of such paying agent or paying agents as we may designate from time to time, except that at our option, we may pay any interest by check mailed to the address of the person entitled thereto as such address will appear in the security register with respect to such debt security.

    It is expected that the Trustee will act as paying agent with respect to debt securities. We may at any time designate additional paying agents or rescind the designation of any paying agents or approve a change in the office through which any paying agent acts.

    All moneys paid by us to a paying agent for the payment of the principal of and premium, if any, or interest, if any, on any debt securities that remain unclaimed at the end of two years after such principal, premium, if any, or interest will have become due and payable, subject to applicable law, will be repaid to us and the holder of such debt security will thereafter look only to us for payment thereof.

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Book-Entry Debt Securities

    Except under the circumstances described below, the debt securities may be issued in whole or in part in the form of one or more global debt securities that will be deposited with, or on behalf of, a depository as we may designate and registered in the name of a nominee of such depository.

    It is expected that Depository Trust Company will be the designated depository. Information about the designated depository will be set forth in the Prospectus Supplement.

    Book-entry debt securities represented by a global security will not be exchangeable for certificated notes and, except as set forth below or in the Prospectus Supplement, will not otherwise be issuable as certificated notes. Except as set forth below or in the Prospectus Supplement, owners of beneficial interests in a global security will not be entitled to have any of the individual book-entry debt securities represented by a global security registered in their names, will not receive or be entitled to receive physical delivery of any such book-entry security and will not be considered the owners thereof under the Indenture, including, without limitation, for purposes of consenting to any amendment thereof or supplement thereto.

    So long as the depository, or its nominee, is the registered owner of a global security, such depository or such nominee, as the case may be, will be considered the sole owner of the individual book-entry debt securities represented by such global security for all purposes under the Indenture.

    None of TDS, the Trustee nor any agent for payment on or registration of transfer or exchange of any global security will have any responsibility or liability for any aspect of the depository's records relating to or payments made on account of beneficial interests in such global security or for maintaining, supervising or reviewing any records relating to such beneficial interests.

    Payments of principal of and premium, if any, and any interest on individual book-entry debt securities represented by a global security will be made to the depository or its nominee, as the case may be, as the owner of such global security.

    If the designated depository is at any time unwilling or unable to continue as depository and a successor depository is not appointed, we will issue individual certificated notes in exchange for the global note representing the corresponding book-entry debt securities.

    In addition, we may at any time and in our sole discretion determine not to have any debt securities represented by the global security and, in such event, will issue individual certificated notes in exchange for the global security representing the corresponding book-entry debt securities. In any such instance, an owner of a book-entry security represented by a global security will be entitled to physical delivery of individual certificated notes equal in principal amount to such book-entry security and to have such certificated notes registered in his or her name.

Modification of the Indenture

    With the Consent of Securityholders.  The Indenture contains provisions permitting TDS and the Trustee, with the consent of the holders of not less than a majority in principal amount of debt securities of each series that are affected by the modification, to modify the Indenture or any supplemental indenture affecting that series or the rights of the holders of that series of debt securities. However, no such modification, without the consent of the holder of each outstanding security affected thereby, may:

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extend the fixed maturity of any debt securities of any series,



•

reduce the principal amount of any debt securities of any series,



•

reduce the rate or extend the time of payment of interest on any debt securities of any series,

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reduce any premium payable upon the redemption of any debt securities of any series,



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reduce the amount of the principal of a discount security that would be due and payable upon a declaration of acceleration of the maturity of any debt securities of any series,



•

reduce the percentage of holders of aggregate principal amount of debt securities which are required to consent to any such supplemental indenture, or



•

reduce the percentage of holders of aggregate principal amount of debt securities which are required to waive any default and its consequences.

    Without the Consent of Securityholders.  In addition, TDS and the Trustee may execute, without the consent of any holder of debt securities, any supplemental indenture for certain other usual purposes, including:

•

to evidence the succession of another person to TDS or a successor to TDS, and the assumption by any such successor of the covenants of TDS contained in the Indenture or otherwise established with respect to the debt securities;



•

to add to the covenants of TDS further covenants, restrictions, conditions or provisions for the protection of the holders of the debt securities of all or any series, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions a default or an Event of Default with respect to such series permitting the enforcement of all or any of the several remedies provided in the Indenture;



•

to cure any ambiguity or to correct or supplement any provision contained in the Indenture or in any supplemental indenture which may be defective or inconsistent with any other provision contained in the Indenture or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under the Indenture as are not inconsistent with the provisions of the Indenture and will not adversely affect the rights of the holders of the Securities of any series which are outstanding in any material respect;



•

to change or eliminate any of the provisions of the Indenture or to add any new provision to the Indenture, except that such change, elimination or addition will become effective only as to debt securities issued pursuant to or subsequent to such supplemental indenture unless such change, elimination or addition does not adversely affect the rights of any securityholder of outstanding debt securities in any material respect;



•

to establish the form or terms of debt securities of any series as permitted by the Indenture;



•

to add any additional Events of Default with respect to all or any series of outstanding securities;



•

to add guarantees with respect to debt securities or to release a guarantor from guarantees in accordance with the terms of the applicable series of debt securities;



•

to secure a series of debt securities by conveying, assigning, pledging or mortgaging property or assets to the Trustee as collateral security for such series of debt securities;



•

to provide for uncertificated debt securities in addition to or in place of certificated debt securities;



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to provide for the authentication and delivery of bearer securities and coupons representing interest, if any, on such securities, and for the procedures for the registration, exchange and replacement of such securities, and for the giving of notice to, and the solicitation of the vote or consent of, the holders of such securities, and for any other matters incidental thereto;

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•

to evidence and provide for the acceptance of appointment by a separate or successor Trustee with respect to the debt securities and to add to or change any of the provisions of the Indenture as may be necessary to provide for or facilitate the administration of the trusts by more than one Trustee;



•

to change any place or places where

•
the principal of and premium, if any, and interest, if any, on all or any series of debt securities will be payable,

•
all or any series of debt securities may be surrendered for registration of transfer,

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all or any series of debt securities may be surrendered for exchange, and

•
notices and demands to or upon TDS in respect of all or any series of debt securities and the Indenture may be served, which must be located in New York, New York or be the principal office of TDS;

•

the principal of and premium, if any, and interest, if any, on all or any series of debt securities will be payable,



•

all or any series of debt securities may be surrendered for registration of transfer,



•

all or any series of debt securities may be surrendered for exchange, and



•

notices and demands to or upon TDS in respect of all or any series of debt securities and the Indenture may be served, which must be located in New York, New York or be the principal office of TDS;



•

to provide for the payment by TDS of additional amounts in respect of certain taxes imposed on certain holders and for the treatment of such additional amounts as interest and for all matters incidental thereto;



•

to provide for the issuance of debt securities denominated in a currency other than dollars or in a composite currency and for all matters incidental thereto; or



•

to comply with any requirements of the SEC or the Trust Indenture Act of 1939, as amended.

Events of Default

    The Indenture provides that any one or more of the following described events, which has occurred and is continuing, constitutes an "Event of Default" with respect to each series of debt securities:

•

failure for 30 days to pay interest on debt securities of that series when due and payable; or



•

failure for three business days to pay principal or premium, if any, on debt securities of that series when due and payable whether at maturity, upon redemption, pursuant to any sinking fund obligation, by declaration or otherwise; or



•

failure by TDS to observe or perform any other covenant (other than those specifically relating to another series) contained in the Indenture for 90 days after written notice to TDS from the Trustee or the holders of at least 33% in principal amount of the outstanding debt securities of that series; or



•

certain events involving bankruptcy, insolvency or reorganization of TDS; or



•

any other event of default provided for in a series of debt securities.

    The Trustee or the holders of not less than 33% in aggregate outstanding principal amount of any particular series of debt securities may declare the principal due and payable immediately upon an Event of Default with respect to such series. Holders of a majority in aggregate outstanding principal amount of such series may annul any such declaration and waive the default with respect to such series if the default has been cured and a sum sufficient to pay all matured installments of interest and principal otherwise than by acceleration and any premium has been deposited with the Trustee.

    The holders of a majority in aggregate outstanding principal amount of any series of debt securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee for that series.

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    Subject to the provisions of the Indenture relating to the duties of the Trustee in case an Event of Default will occur and be continuing, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the holders of the debt securities, unless such holders will have offered to the Trustee indemnity satisfactory to it.

    The holders of a majority in aggregate outstanding principal amount of any series of debt securities affected thereby may, on behalf of the holders of all debt securities of such series, waive any past default, except as discussed in the following paragraph.

    The holders of a majority in aggregate outstanding principal amount of any series of debt securities affected thereby may not waive a default in the payment of principal, premium, if any, or interest that shall become due otherwise than by

•

acceleration, unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal otherwise than by acceleration and any premium has been deposited with the Trustee, or



•

a call for redemption or any series of debt securities.

    We are required to file annually with the Trustee a certificate as to whether or not we are in compliance with all the conditions and covenants under the Indenture.

Consolidation, Merger and Sale

    The Indenture does not contain any covenant that restricts our ability to merge or consolidate with or into any other corporation, sell or convey all or substantially all of its assets to any person, firm or corporation or otherwise engage in restructuring transactions.

    The successor corporation must assume due and punctual payment of principal or premium, if any, and interest on the debt securities.

Defeasance

    Debt securities of any series may be defeased in accordance with their terms and, unless the supplemental indenture or company order establishing the terms of such series otherwise provides, as set forth below.

    We at any time may terminate as to a series our obligations with respect to the debt securities of that series under any restrictive covenant which may be applicable to that particular series, commonly known as "covenant defeasance". All of our other obligations would continue to be applicable to such series.

    We at any time may also terminate as to a series substantially all of our obligations with respect to the debt securities of such series and the Indenture, commonly known as "legal defeasance". However, in legal defeasance, certain of our obligations would not be terminated, including our obligations with respect to the defeasance trust and obligations to register the transfer or exchange of a security, to replace destroyed, lost or stolen debt securities and to maintain agencies in respect of the debt securities.

    We may exercise our legal defeasance option notwithstanding our prior exercise of any covenant defeasance option.

    If we exercise a defeasance option, the particular series will not be accelerated because of an event that, prior to such defeasance, would have constituted an Event of Default.

    To exercise either of our defeasance options as to a series, we must irrevocably deposit in trust with the Trustee or any paying agent money, certain eligible obligations as specified in the Indenture,

13

or a combination thereof, in an amount sufficient to pay when due the principal of and premium, if any, and interest, if any, due and to become due on the debt securities of such series that are outstanding.

    Such defeasance or discharge may occur only if, among other things, we have delivered to the Trustee an opinion of counsel stating that:

•

the holders of such debt securities will not recognize gain, loss or income for federal income tax purposes as a result of the satisfaction and discharge of the Indenture with respect to such series, and



•

such holders will realize gain, loss or income on such debt securities, including payments of interest thereon, in the same amounts and in the same manner and at the same time as would have been the case if such satisfaction and discharge had not occurred.

    The amount of money and eligible obligations on deposit with the Trustee may not be sufficient to pay amounts due on the debt securities of that series at the time of the acceleration resulting from such Event of Default if:

•

we exercise our option to effect a covenant defeasance with respect to the debt securities of any series, and



•

the debt securities of that series are thereafter declared due and payable because of the occurrence of any Event of Default.

    In such event, we would remain liable for such payments.

Governing Law

    The Indenture and the debt securities issued thereunder will be governed by the laws of the State of Illinois.

Concerning the Trustee

    BNY Midwest Trust Company, the trustee under the Indenture, is an affiliate of The Bank of New York, which is one of a number of banks with which TDS and its subsidiaries maintain ordinary banking relationships including, in certain cases, credit facilities. In connection therewith, we utilize or may utilize some of the banking and other services offered by The Bank of New York or its affiliates, including BNY Midwest Trust Company, in the normal course of business, including securities custody services.

    BNY Midwest Trust Company is also Trustee with respect to the Medium-Term Notes, Series A, B and C, and 7% Notes due August 1, 2006, of TDS. These notes were issued pursuant to an Indenture dated as of February 1, 1991, as supplemented, between TDS and BNY Midwest Trust Company, successor to Harris Trust and Savings Bank, as trustee, relating to unsubordinated and unsecured debt securities. None of the debt securities to be issued pursuant to this Prospectus will be issued under that prior indenture. For information about such prior indenture and the debt securities issued thereunder, see documents filed by TDS under the Securities Exchange Act of 1934. See "Where You Can Find More Information."

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PLAN OF DISTRIBUTION

    We may sell debt securities being offered hereby:

•

directly to purchasers,



•

through agents,



•

through underwriters and



•

through dealers.

    The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.

Directly to Purchasers

    Offers to purchase debt securities may be solicited directly by TDS and sales thereof may be made by TDS directly to institutional investors or others. The terms of any such sales will be described in the Prospectus Supplement relating thereto. Any purchasers of such securities may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale of those securities.

Agents

    Offers to purchase debt securities may be solicited by agents designated by TDS from time to time. Any such agent involved in the offer or sale of the debt securities in respect of which this Prospectus is delivered will be named, and any commissions payable by TDS to such agent will be set forth, in the Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Any agent may be deemed to be an underwriter, as that term is defined in the Securities Act, of the securities so offered and sold.

Underwriters

    If underwriters are utilized in the sale, TDS will execute an underwriting agreement with such underwriters at the time of sale to them and the names of the underwriters and the terms of the transaction will be set forth in the Prospectus Supplement, which will be used by the underwriters to make resales of the debt securities in respect of which this Prospectus is delivered to the public. Any underwriters will acquire debt securities for their own account and may resell such debt securities from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined at the time of sale. Debt securities may be offered to the public either through underwriting syndicates represented by managing underwriters, or directly by the managing underwriters. Only underwriters named in the Prospectus Supplement are deemed to be underwriters in connection with the debt securities offered thereby. If any underwriters are utilized in the sale of the debt securities, the underwriting agreement will provide that the obligations of the underwriters are subject to certain conditions precedent and that the underwriters with respect to a sale of debt securities will be obligated to purchase all such debt securities, if any are purchased.

Dealers

    If a dealer is utilized in the sale of the debt securities in respect of which this Prospectus is delivered, TDS will sell such debt securities to the dealer, as principal. The dealer may then resell such debt securities to the public at varying prices to be determined by such dealer at the time of resale. The name of the dealer and the terms of the transaction will be set forth in the prospectus supplement relating to those offers and sales. Any such dealer may be deemed to be an underwriter, as such term is defined in the Securities Act, of the securities so offered and sold.

15

Delayed Delivery Contracts

    If so indicated in the Prospectus Supplement, TDS will authorize agents and underwriters to solicit offers by certain institutions to purchase debt securities from TDS at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the Prospectus Supplement.

    Each delayed delivery contract will be for an amount not less than, and unless TDS otherwise agrees the aggregate principal amount of debt securities sold pursuant to delayed delivery contracts shall be not less nor more than, the respective amounts stated in the Prospectus Supplement. Institutions with whom delayed delivery contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all cases be subject to the approval of TDS.

    Delayed delivery contracts will not be subject to any conditions except that the purchase by an institution of the debt securities covered by its contract shall not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which such institution is subject.

    A commission indicated in the Prospectus Supplement will be paid to underwriters and agents soliciting purchases of debt securities pursuant to delayed delivery contracts accepted by TDS.

Remarketing

    Securities may also be offered and sold, if so indicated in the related Prospectus Supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment in connection with their terms, or otherwise, by one or more firms "remarketing firms," acting as principals for their own accounts or as agents for us and/or any selling shareholders. Any remarketing firm will be identified and the terms of its agreement, if any, with us and its compensation will be described in the related Prospectus Supplement. Remarketing firms may be deemed to be underwriters, as that term is defined in the Securities Act, in connection with the securities remarketed by them.

General Information

    Each series of debt securities will be a new issue and may have no established trading market. Unless otherwise specified in a related prospectus supplement, we will not be obligated to take any action to list any series of debt securities on an exchange or to otherwise facilitate a trading market for such securities. We cannot assure you that there will be any liquidity in the trading market for any of the securities. Agents, underwriters, dealers and remarketing firms may be customers of, engage in transactions with, or perform services for, us, our subsidiaries and/or any selling shareholders in the ordinary course of their businesses. The place, time of delivery and other terms of the sale of the offered securities will be described in the applicable prospectus supplement. In order to comply with the securities laws of some states, if applicable, the securities offered hereby will be sold in those jurisdictions only through registered or licensed brokers or dealers.

    In addition, in some states securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and complied with. Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short-covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the

16

price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.

    Agents, underwriters and dealers may be entitled under agreements entered into with TDS to indemnification by TDS against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the agents, underwriters or dealers may be required to make in respect thereof. In addition, directors, officers and controlling persons of TDS are entitled under the TDS charter and bylaws and Delaware law to indemnification for civil liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

    The validity of the debt securities offered hereby will be passed upon for TDS by Sidley Austin Brown & Wood, Chicago, Illinois. Walter C.D. Carlson, a director of TDS and of United States Cellular, Michael G. Hron, the General Counsel and an Assistant Secretary of TDS and United States Cellular and an Assistant Secretary of certain subsidiaries of TDS, William S. DeCarlo, the Assistant General Counsel and an Assistant Secretary of TDS and an Assistant Secretary of certain subsidiaries of TDS, and Stephen P. Fitzell, the Assistant General Counsel and an Assistant Secretary of United States Cellular and TDS Telecommunications and an Assistant Secretary of certain subsidiaries of TDS, are members of that law firm. Walter C.D. Carlson is also a trustee of a voting trust which controls TDS.

EXPERTS

    The audited consolidated financial statements and schedules of TDS incorporated by reference in this Prospectus have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated by reference herein. The financial statements and schedules referred to above have been incorporated by reference in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports.

17

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution

    The expenses in connection with the issuance and distribution of the securities being registered are:

Securities and Exchange Commission Registration Fee	$	250,000
Rating Agency Fees		225,000	*
Printing Expenses		65,000	*
Legal Fees and Expenses		45,000	*
Trustee Fees and Expenses		12,000	*
Accounting Fees and Expenses		10,000	*
Miscellaneous		8,000	*
	$	615,000

*

Estimated

Item 15.  Indemnification of Directors and Officers

    The Registrant's Restated Certificate of Incorporation contains a provision providing that no director or officer of the Registrant shall be personally liable to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director or officer except for breach of the director's or officer's duty of loyalty to the Registrant or its stockholders, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, unlawful payment of dividends, unlawful stock redemptions or repurchases and transactions from which the director or officer derived an improper personal benefit.

    The Restated Certificate of Incorporation also provides that the Registrant shall indemnify directors and officers of the Registrant, its consolidated subsidiaries and certain other related entities generally in the same manner and to the extent permitted by the Delaware General Corporation Law, as more specifically provided in the Bylaws of the Registrant. The Bylaws provide for indemnification and permit the advancement of expenses by the Registrant generally in the same manner and to the extent permitted by the Delaware General Corporation Law, subject to compliance with certain requirements and procedures specified in the Bylaws. In general, the Bylaws require that any person seeking indemnification must provide the Registrant with sufficient documentation as described in the Bylaws and, if an undertaking to return advances is required, to deliver an undertaking in the form prescribed by the Registrant and provide security for such undertaking if considered necessary by the Registrant. In addition, the Bylaws specify that, except to the extent required by law, the Registrant does not intend to provide indemnification to persons under certain circumstances, such as where the person was not acting in the interests of the Registrant or was otherwise involved in a crime or tort against the Registrant.

    Under the Delaware General Corporation Law, directors and officers, as well as other employees or persons, may be indemnified against judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation—a "derivative action"), and against expenses (including attorney's fees) in any action (including a derivative action), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their

II–1

conduct was unlawful. However, in the case of a derivative action, a person cannot be indemnified for expenses in respect of any matter as to which the person is adjudged to be liable to the corporation unless and to the extent a court determines that such person is fairly and reasonably entitled to indemnity for such expenses.

    Delaware law also provides that, to the extent a director, officer, employee or agent of a corporation has been successful on the merits or otherwise in defense of any action or matter, the corporation must indemnify such party against expenses (including attorneys' fees) actually and reasonably incurred by such party in connection therewith.

    Expenses incurred by a director or officer in defending any action may be paid by a Delaware corporation in advance of the final disposition of the action upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it is ultimately determined that such party is not entitled to be indemnified by the corporation.

    The Delaware General Corporation Law provides that the indemnification and advancement of expenses provided thereby are not exclusive of any other rights granted by bylaws, agreements or otherwise, and provides that a corporation shall have the power to purchase and maintain insurance on behalf of any person, whether or not the corporation would have the power to indemnify such person under Delaware law.

    The Registrant has directors' and officers' liability insurance which provides, subject to certain policy limits, deductible amounts and exclusions, coverage for all persons who have been, are or may in the future be, directors or officers of the Registrant, against amounts which such persons must pay resulting from claims against them by reason of their being such directors or officers during the policy period for certain breaches of duty, omissions or other acts done or wrongfully attempted or alleged.

    Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Item 16.  (a) Exhibits

Exhibit No.	Description of Document
1.1	Form of Underwriting Agreement. (1)
1.2	Form of Selling Agency Agreement. (1)
4.1	Form of Indenture.
4.2	Form of Debt Security. (1)
4.3	Other instruments defining the rights of security-holders. (1)
5	Opinion of Sidley Austin Brown & Wood relating to the securities.
12	Statements regarding computation of ratios.

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23.1	Consent of Independent Public Accountants.
23.3	Consent of Counsel (included in Exhibit 5 above).
24	Powers of Attorney for certain officers and directors (included on signature page).
25	Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of BNY Midwest Trust Company.

(1)

To be filed by post-effective amendment or under cover of Form 8-K prior to the offer or sale of any securities hereunder, if applicable.

(b) Schedules

    Report of Independent Public Accountants on Financial Statement Schedules*

Schedule I	Condensed Financial Information of Registrant—Balance Sheets as of December 31, 2000 and 1999, and Statements of Income and Statements of Cash Flows for each of the Three Years in the Period Ended December 31, 2000.*
Schedule II	Valuation and Qualifying Accounts for each of the Three Years in the Period Ended December 31, 2000.*

    All other schedules are omitted because they are not applicable or not required or because the required information is shown in the financial statements or notes thereto.

*

Incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the Year Ended December 31, 2000.

Item 17.  Undertakings

(a)

The undersigned registrant hereby undertakes:

    (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

     (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

    (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

    (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic

II–3

reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

    (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

    (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

    (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

    (c) If the securities to be registered are to be offered at competitive bidding, the undersigned registrant hereby undertakes: (1) to use its best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters, and dealers, a reasonable number of copies of a prospectus which at that time meets the requirements of Section 10(a) of the Act, and relating to the securities offered at competitive bidding, as contained in the registration statement, together with any supplements thereto, and (2) to file an amendment to the registration statement reflecting the results of bidding, the terms of the reoffering and related matters to the extent required by the applicable form, not later than the first use, authorized by the issuer after the opening of bids, of a prospectus relating to the securities offered at competitive bidding, unless no further public offering of such securities by the issuer and no reoffering of such securities by the purchasers is proposed to be made.

    (d) The undersigned registrant hereby undertakes to file, if necessary, an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended, in accordance with the rules and regulations prescribed by the Securities and Exchange Commission under Section 305(b)(2) of such Act.

    (e) Insofar as indemnification for liabilities arising under the Securities Act or 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registration the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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SIGNATURES

    Pursuant to requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement and/or Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois on the 16th day of October, 2001.

TELEPHONE AND DATA SYSTEMS, INC.
By	/s/ LEROY T. CARLSON LeRoy T. Carlson, Chairman

POWER OF ATTORNEY

    Each person whose signature appears below constitutes and appoints LeRoy T. Carlson and LeRoy T. Carlson, Jr., and each of them individually, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him or her and in his or her name, place and stead, in any and all capacities to sign any and all amendments (including post-effective amendments) to this Registration Statement and/or Amendment, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and to take such actions in, and file with the appropriate applications, statements, consents and other documents as may be necessary or expedient to register securities of the Registrant for sale, granting unto said attorney-in-fact and agent full power and authority to do so and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all the said attorney-in-fact and agent or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof and the registrant hereby confers like authority on its behalf.

    Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement and/or Amendment has been signed below by the following persons in the capacities and on the 16th day of October, 2001.

Signature	Title
/s/ LEROY T. CARLSON LeRoy T. Carlson	Chairman and Director
/s/ LEROY T. CARLSON, JR. LeRoy T. Carlson, Jr.	President and Chief Executive Officer and Director
/s/ SANDRA L. HELTON Sandra L. Helton	Executive Vice President and Chief Financial Officer and Director
/s/ JAMES BARR III James Barr III	Director
/s/ DONALD C. NEBERGALL Donald C. Nebergall	Director

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/s/ HERBERT S. WANDER Herbert S. Wander	Director
/s/ WALTER C.D. CARLSON Walter C.D. Carlson	Director
/s/ LETITIA G.C. CARLSON Letitia G.C. Carlson	Director
/s/ GEORGE W. OFF George W. Off	Director
/s/ MARTIN L. SOLOMON Martin L. Solomon	Director
/s/ KEVIN A. MUNDT Kevin A. Mundt	Director
/s/ MICHAEL D. BILLS Michael D. Bills	Director
/s/ D. MICHAEL JACK D. Michael Jack	Vice President and Controller (principal accounting officer)

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INDEX TO EXHIBITS

Exhibit No.	Description of Document
4.1	Form of Indenture
5	Opinion of Sidley Austin Brown & Wood
12	Statements regarding computation of ratios
23.1	Consent of independent public accountants
23.3	Consent of Sidley Austin Brown & Wood (included in Exhibit 5)
24	Powers of Attorney (included on signature page)
25	Form T-1

QuickLinks

TABLE OF CONTENTS
FORWARD LOOKING STATEMENTS
WHERE YOU CAN FIND MORE INFORMATION
SUMMARY
TDS
USE OF PROCEEDS
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
DESCRIPTION OF DEBT SECURITIES
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
POWER OF ATTORNEY
INDEX TO EXHIBITS

EX-4.1

                                                             EXHIBIT 4.1












                        TELEPHONE AND DATA SYSTEMS, INC.



                                       AND



                           BNY MIDWEST TRUST COMPANY,



                                   AS TRUSTEE



                                     -------



                                    INDENTURE

                           Dated as of ________, 2001





                                TABLE OF CONTENTS

                              CROSS-REFERENCE TABLE




      Section of
  Trust Indenture Act                                       Section of
  OF 1939, as amended                                        Indenture
  -------------------                                      ------------
                                                       

       310(a)                                                   7.09
       310(b)                                                   7.08
       310(b)                                                   7.10
       310(c)                                               Inapplicable
       311(a)                                                   7.13
       311(b)                                                   7.13
       311(c)                                               Inapplicable
       312(a)                                                   5.01
       312(a)                                                 5.02(a)
       312(b)                                                 5.02(c)
       312(b)                                                 5.02(d)
       312(c)                                                 5.02(e)
       313(a)                                                 5.04(a)
       313(b)                                                 5.04(b)
       313(c)                                                 5.04(a)
                                                              5.04(b)
       313(d)                                                 5.04(c)
       314(a)                                                   5.03
       314(b)                                               Inapplicable
       314(c)                                                 13.06(a)
       314(d)                                               Inapplicable
       314(e)                                                 13.06(b)
       314(f)                                               Inapplicable
       315(a)                                                 7.01(a)
       315(a)                                                   7.02
       315(b)                                                   6.07
       315(c)                                                 7.01(a)
       315(d)                                                 7.01(b)
       315(e)                                                   6.08
       316(a)                                                   6.06
       316(a)                                                   8.04
       316(b)                                                   6.04
       316(c)                                                   8.01
       317(a)                                                   6.02
       317(b)                                                   4.03
       318(a)                                                   13.08




                                TABLE OF CONTENTS
                                   (Continued)

         This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms or
provisions.



                                                                                                        Page
                                                                                                        ----
                                                                                                      
ARTICLE I.  DEFINITIONS...................................................................................2

         SECTION 1.01.  Certain defined terms.............................................................2

ARTICLE II.  ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES................8

         SECTION 2.01.  Designation, Terms, Amount, Authentication and Delivery
                        of Securities.....................................................................8

         SECTION 2.02.  Form of Security and Trustee's Certificate.......................................10

         SECTION 2.03.  Date and Denominations of Securities, and Provisions for
                        Payment of Principal, Premium and Interest.......................................10

         SECTION 2.04.  Execution of Securities..........................................................12

         SECTION 2.05.  Exchange of Securities...........................................................13
                  (a)   Registration and Transfer of Securities..........................................13
                  (b)   Security Register; Securities to be Accompanied by Proper Instruments of
                        Transfer.........................................................................13
                  (c)   Charges upon Exchange, Transfer or Registration of Securities....................14
                  (d)   Restrictions on Transfer or Exchange at Time of Redemption.......................14

         SECTION 2.06.  Temporary Securities.............................................................14

         SECTION 2.07.  Mutilated, Destroyed, Lost or Stolen Securities..................................15

         SECTION 2.08. Cancellation of Surrendered Securities............................................15

         SECTION 2.09. Provisions of Indenture and Securities for Sole Benefit of Parties and
                       Securityholders...................................................................16

         SECTION 2.10.  Appointment of Authenticating Agent..............................................16

         SECTION 2.11.  Global Security..................................................................16
                  (a)   Authentication and Delivery; Legend..............................................16
                  (b)   Transfer of Global Security......................................................17
                  (c)   Issuance of Securities in Definitive Form........................................17

         SECTION 2.12.  Payment in Proper Currency.......................................................17

         SECTION 2.13.  Identification of Securities.....................................................18

ARTICLE III.  REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS.......................................18

         SECTION 3.01.  Redemption of Securities.........................................................18

         SECTION 3.02.  Action to Redeem Securities......................................................18
                  (a)   Notice of Redemption.............................................................18
                  (b)   Notice to Trustee of Securities to be Redeemed...................................19



                                     ii



                                TABLE OF CONTENTS
                                   (Continued)


                                                                                                        Page
                                                                                                        ----
                                                                                                    
         SECTION 3.03.  Payment of Securities Called for Redemption......................................19
                  (a)   When Securities Called for Redemption become Due and Payable.....................19
                  (b)   Receipt of New Security upon Partial Payment.....................................20

         SECTION 3.04.  Sinking Fund for Securities......................................................20

         SECTION 3.05.  Satisfaction of Sinking Fund Payments with Securities............................20

         SECTION 3.06.  Redemption of Securities for Sinking Fund........................................20

ARTICLE IV.  PARTICULAR COVENANTS OF THE COMPANY.........................................................21

         SECTION 4.01.  Payment of Principal (and Premium if any) and Interest on Securities.............21

         SECTION 4.02.  Maintenance of Office or Agency for Payment, Registration, Transfer and Exchange
                        of Securities....................................................................21

         SECTION 4.03.  Paying Agent.....................................................................22
                  (a)   Duties of Paying Agent...........................................................22
                  (b)   Company as Paying Agent..........................................................22
                  (c)   Holding Sums in Trust............................................................22

         SECTION 4.04.  Appointment to Fill Vacancy in Office of Trustee.................................23

         SECTION 4.05.  Restriction on Consolidation, Merger of Trustee..................................23

         SECTION 4.06.  Original Issue Discount Security.................................................23

ARTICLE V.  SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE............................23

         SECTION 5.01.  Company to Furnish Trustee Information as to Names and Addresses of
                        Securityholders..................................................................23

         SECTION 5.02.  Responsibilities of Trustee Relating to Securityholder Information...............23
                  (a)   Trustee to Preserve Information as to Names and Addresses of Securityholders.....23
                  (b)   Trustee may Destroy List of Securityholders on Certain Conditions................23
                  (c)   Trustee to Make Information as to Names and Addresses of Securityholders
                        Available to Certain Applicants..................................................24
                  (d)   Procedure if Trustee Elects not to Make Information Available to Applicants......24
                  (e)   Company and Trustee not Accountable for Disclosure of Information................24

         SECTION 5.03.  Delivery Obligations of Company..................................................25
                  (a)   Annual and Other Reports to be Filed by Company with Trustee.....................25
                  (b)   Additional Information and Reports to be Filed with Trustee and Securities
                        and Exchange Commission..........................................................25
                  (c)   Summaries of Information and Reports to be Transmitted by Company to
                        Securityholders..................................................................25


                                      iii



                                TABLE OF CONTENTS
                                   (Continued)

                                                                                                        Page
                                                                                                        ----
                                                                                                      
                  (d)   Annual Certificate to be Furnished to Trustee....................................25
                  (e)   Effect of Delivery to Trustee....................................................26

         SECTION 5.04.  Delivery Obligations of Trustee..................................................26
                  (a)   Trustee to Transmit Annual Report to Securityholders.............................26
                  (b)   Trustee to Transmit Certain Further Reports to Securityholders...................27
                  (c)   Copies of Reports to be Filed with Stock Exchanges and Securities and Exchange
                        Commission.......................................................................27

ARTICLE VI.  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT.............................27

         SECTION 6.01.  Events of Default................................................................27
                  (a)   Events of Default Defined........................................................27
                  (b)   Acceleration of Maturity upon Event of Default...................................28
                  (c)   Waiver of Default and Rescission of Declaration of Maturity......................29
                  (d)   Restoration of Former Position and Rights upon Curing Default....................29

         SECTION 6.02.  Rights of Trustee upon Default...................................................29
                  (a)   Covenant of Company to Pay to Trustee Whole Amount due on Securities on
                        Default in Payment of Interest or Principal (and Premium, if any)................29
                  (b)   Trustee may Recover Judgment for Whole Amount due on Securities on Failure of
                        Company to Pay...................................................................29
                  (c)   Proof of Claim by Trustee in Bankruptcy, Reorganization or Receivership
                        Proceeding.......................................................................30
                  (d)   Rights of Action and of Asserting Claims may be Enforced by Trustee without
                        Possession of Securities.........................................................30

         SECTION 6.03.  Application of Monies Collected by Trustee.......................................31

         SECTION 6.04.  Limitation on Suits by Holders of Securities.....................................31

         SECTION 6.05.  Remedies; Delay or Omission in Exercise of Rights................................32
                  (a)   Remedies Cumulative..............................................................32
                  (b)   Delay or Omission in Exercise of Rights not Waiver of Default....................32

         SECTION 6.06.  Rights of Holders of Majority in Principal Amount of Securities to Direct
                        Trustee and to Waive Defaults....................................................32

         SECTION 6.07.  Notice of Known Defaults.........................................................32

         SECTION 6.08.  Undertaking to Pay Costs in Certain Suits under Indenture or Against Trustee.....33

ARTICLE VII.  CONCERNING THE TRUSTEE.....................................................................33

         SECTION 7.01.  Certain Duties and Responsibilities of Trustee...................................33
                  (a)   Upon Event of Default............................................................33
                  (b)   Negligence or Willful Misconduct by Trustee......................................34

         SECTION 7.02.  Certain Rights of Trustee........................................................35
                  (a)   Trustee Reliance on Documents....................................................35


                                       iv



                                TABLE OF CONTENTS
                                   (Continued)


                                                                                                       Page
                                                                                                       ----
                                                                                                   
                  (b)   Evidence Provided for Certain Instruments.......................................35
                  (c)   Trustee may Consult with Counsel and Act on Advice or Opinion of Counsel........35
                  (d)   Trustee may Require Indemnity from Securityholders..............................35
                  (e)   Trustee not Liable for Actions in Good Faith Believed to be Authorized..........35
                  (f)   Trustee not Bound to Investigate Facts or Matters...............................35
                  (g)   Trustee may Perform Duties Directly or through Agents or Attorneys..............36
                  (h)   Permissive Rights of Trustee....................................................36

         SECTION 7.03.  Limitations in Liability of Trustee.............................................36
                  (a)   Trustee not Liable for Recitals in Indenture or in Securities...................36
                  (b)   No Representations by Trustee as to Validity or Indenture or of Securities......36
                  (c)   Trustee not Accountable for Use of Securities or Proceeds.......................36

         SECTION 7.04.  Trustee, Paying Agent or Security Registrar may Own Securities..................36

         SECTION 7.05.  Monies Received by Trustee to be Held in Trust without Interest.................36

         SECTION 7.06.  Compensation and Reimbursement of Trustee.......................................36
                  (a)   Trustee Entitled to Compensation, Reimbursement and Indemnity...................37
                  (b)   Obligations to Trustee to be Secured by Lien prior to Securities................37
                  (c)   Nature of Expenses..............................................................37
                  (d)   Survival of Obligations.........................................................37

         SECTION 7.07.  Trustee May Rely on Certificate of Officers of Company..........................37

         SECTION 7.08.  Trustee Must Eliminate Conflict or Resign.......................................37

         SECTION 7.09.  Requirements for Eligibility of Trustee.........................................38

         SECTION 7.10.  Trustee.........................................................................38
                  (a)   Resignation of Trustee and Appointment of Successor.............................38
                  (b)   Removal of Trustee by Company or by Court on Securityholders' Application.......38
                  (c)   Removal of Trustee by Holders of Majority in Principal Amount of Securities.....39
                  (d)   Time when Resignation or Removal of Trustee Effective...........................39
                  (e)   One Trustee for each Series.....................................................39

         SECTION 7.11.  Successor Trustee...............................................................39
                  (a)   Acceptance by Successor Trustee.................................................39
                  (b)   Trustee with Respect to Less than all Series....................................40
                  (c)   Company to Confirm Trustee's Rights.............................................40
                  (d)   Successor Trustee to be Qualified...............................................40
                  (e)   Notice of Succession............................................................40

         SECTION 7.12.  Successor to Trustee by Merger, Consolidation of Succession to Business.........41



                                       v



                                TABLE OF CONTENTS
                                   (Continued)


                                                                                                      Page
                                                                                                      ----
                                                                                                  
         SECTION 7.13.  Limitations on Rights of Trustee as a Creditor to Obtain Payment of Certain
                        Claims..........................................................................41

ARTICLE VIII.  CONCERNING THE SECURITYHOLDERS...........................................................41

         SECTION 8.01.  Evidence of Action by Securityholders...........................................41

         SECTION 8.02.  Proof of Execution of Instruments and of Holding of Securities..................42

         SECTION 8.03.  Who may be Deemed Owners of Securities..........................................42

         SECTION 8.04.  Securities Owned by Company or Affiliated Persons Disregarded for Certain
                        Purposes........................................................................42

         SECTION 8.05.  Instruments Executed by Securityholders Binding on Future Holders...............43

ARTICLE IX.  SUPPLEMENTAL INDENTURES....................................................................43

         SECTION 9.01.  Supplemental Indenture Without Consent of Securityholders.......................43

         SECTION 9.02.  Supplemental Indenture with Consent of Securityholders..........................46

         SECTION 9.03.  Effect of Supplemental Indentures...............................................47

         SECTION 9.04.  Securities may Bear Notation of Changes by Supplemental Indentures..............47

         SECTION 9.05.  Opinion of Counsel..............................................................47

ARTICLE X.  CONSOLIDATION, MERGER AND SALE..............................................................47

         SECTION 10.01. Consolidations or Mergers of Company and Sales or Conveyances of Property of
                        Company.........................................................................47

         SECTION 10.02.  Successor to Company...........................................................48
                  (a)    Rights and Duties of Successor Company.........................................48
                  (b)    Appropriate Changes may be made in Phraseology and Form of Securities..........48
                  (c)    Company may Consolidate or Merge into Itself or Acquire Properties of Other
                         Corporations...................................................................48

         SECTION 10.03.  Opinion of Counsel.............................................................48

ARTICLE XI.  DEFEASANCE AND CONDITIONS TO DEFEASANCE; UNCLAIMED MONIES..................................49

         SECTION 11.01.  Defeasance and Conditions to Defeasance........................................49
                  (a)    Securities may be Defeased.....................................................49
                  (b)    Covenant and Legal Defeasance..................................................49
                  (c)    Conditions for Defeasance......................................................49
                  (d)    Event of Default Following Covenant Defeasance.................................50
                  (e)    Effect of Defeasance...........................................................50


                                       vi



                                TABLE OF CONTENTS
                                   (Continued)


                                                                                                      Page
                                                                                                      ----
                                                                                                  
         SECTION 11.02.  Application by Trustee of Funds Deposited for Payment of Securities............50

         SECTION 11.03.  Repayment of Monies held by Paying Agent.......................................50

         SECTION 11.04.  Repayment of Monies held by Trustee............................................50

         SECTION 11.05.  Delivery of Officer's Certificate and Opinion of Counsel.......................51

ARTICLE XII.  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................51

         SECTION 12.01. Incorporators, Stockholders, Officers and Directors of Company Exempt from
                        Individual Liability............................................................51

ARTICLE XIII.  MISCELLANEOUS PROVISIONS.................................................................51

         SECTION 13.01.  Successors and Assigns of Company Bound by Indenture...........................51

         SECTION 13.02.  Acts of Board, Committee or Officer of Successor Company.......................51

         SECTION 13.03.  Headings.......................................................................51

         SECTION 13.04.  Notices........................................................................52

         SECTION 13.05.  Governing Law..................................................................52

         SECTION 13.06.  Officers' Certificate and Opinion of Counsel...................................52
                  (a)    When Required..................................................................52
                  (b)    Statements to be Included in each Certificate or Opinion.......................52

         SECTION 13.07.  Payments Due on Non-Business Days..............................................52

         SECTION 13.08.  Provisions Required by Trust Indenture Act of 1939.............................53

         SECTION 13.09.  Execution in Counterparts......................................................53

         SECTION 13.10.  Separability of Indenture Provisions...........................................53

         SECTION 13.11.  Successors and Assigns.........................................................53

         SECTION 13.12.  Securities in Foreign Currencies...............................................53



                                      vii




                                    INDENTURE

         THIS INDENTURE, dated as of the _____ day of __________, 2001, between
TELEPHONE AND DATA SYSTEMS, INC., a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter sometimes referred to as
the "Company"), and BNY MIDWEST TRUST COMPANY, an Illinois Trust Company, as
trustee (hereinafter sometimes referred to as the "Trustee"):

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured promissory notes or other evidences of indebtedness
(hereinafter referred to as the "Securities"), in an unlimited aggregate
principal amount to be issued from time to time in one or more series as in this
Indenture provided, as registered Securities without coupons, to be manually
authenticated by the certificate of the Trustee, and which will rank pari passu
with all other unsecured and unsubordinated debt of the Company;

         WHEREAS, to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture;

         WHEREAS, the Securities and the certificate of authentication to be
borne by the Securities (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by a Company Order (as defined
below), or set forth in this Indenture or in any indenture supplemental to this
Indenture;

         AND WHEREAS, all acts and things necessary to make the Securities
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
indenture and agreement according to its terms, have been done and performed or
will be done and performed prior to the issuance of such Securities, and the
execution of this Indenture has been and the issuance hereunder of the
Securities has been or will be prior to issuance in all respects duly
authorized, and the Company, in the exercise of the legal right and power in it
vested, executes this Indenture and proposes to make, execute, issue and deliver
the Securities;

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the
Securities are and are to be authenticated, issued and delivered, and in
consideration of the premises, of the purchase and acceptance of the Securities
by the holders thereof and of the sum of one dollar ($1.00) to it duly paid by
the Trustee at the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee, for the equal
and proportionate benefit (subject to the provisions of this Indenture) of the
respective holders from time to time of the Securities, without any
discrimination, preference or priority of any one Security over any other by
reason of priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:



                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.01. CERTAIN DEFINED TERMS. The terms defined in this Section
(except as in this Indenture otherwise expressly provided or unless the context
otherwise requires) for all purposes of this Indenture, any Company Order, any
Board Resolution, and any indenture supplemental hereto shall have the
respective meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended, or
which are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of the
execution of this instrument.


Affiliate

         The term "Affiliate" shall have the meaning set forth in the Securities
Act of 1933, as amended.


Authenticating Agent

         The term "Authenticating Agent" shall mean an authenticating agent with
respect to all or any of the series of Securities, as the case may be, appointed
with respect to all or any series of the Securities, as the case may be, by the
Trustee pursuant to Section 2.10.


Authorized Officer

         The term "Authorized Officer" shall mean the Chairman of the Board
(whether or not such person is an officer of the Company), the President, any
Vice President, the Treasurer or any other officer or agent of the Company duly
authorized by the Board of Directors to act in respect of matters relating to
this Indenture.


Board of Directors or Board

         The term "Board of Directors" or "Board" shall mean the Board of
Directors of the Company, or any duly authorized committee of such Board.


Board Resolution

         The term "Board Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification.


Business Day

         The term "Business Day", with respect to any Security, shall mean any
day that (a) in the Place of Payment (or in any of the Places of Payment, if
more than one) in which amounts are payable as specified in the form of such
Security and (b) in the city in which the Trustee

                                       2



administers its corporate trust business, is not a day on which banking
institutions are authorized or required by law or regulation to close.


Certificate

         The term "Certificate" shall mean a certificate signed by an Authorized
Officer. The Certificate need not comply with the provisions of Section 13.06.


Commission

         The term "Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body, if
any, performing such duties on such date.


Company

         The term "Company" shall mean Telephone and Data Systems, Inc., a
corporation duly organized and existing under the laws of Delaware, and, subject
to the provisions of Article Ten, shall also include its successors and assigns.


Company Order

         The term "Company Order" shall mean a written order signed in the name
of the Company by an Authorized Officer and the Secretary or an Assistant
Secretary of the Company, pursuant to a Board Resolution establishing a series
of Securities.


Corporate Trust Office

         The term "Corporate Trust Office" shall mean the office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office at the date of the execution of this
Indenture is located at 2 North LaSalle Street, Suite 1020, Chicago, IL 60602.


Default

         The term "Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.


Depository

         The term "Depository" shall mean, with respect to Securities of any
series, for which the Company shall determine that such Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency under
the Exchange Act or other applicable statute or regulation, which, in each case,
shall be designated by the Company pursuant to either Section 2.01 or 2.11.

                                       3



Dollar

         The term "Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.


Eligible Obligations

         The term "Eligible Obligations" means (a) with respect to Securities
denominated in Dollars, Governmental Obligations; or (b) with respect to
Securities denominated in a currency other than Dollars or in a composite
currency, such other obligations or instruments as shall be specified with
respect to such Securities, as contemplated by Section 2.01.


Event of Default

         The term "Event of Default" with respect to Securities of a particular
series shall mean any event specified in Section 6.01, continued for the period
of time, if any, therein designated.


Global Security

         The term "Global Security" shall mean, with respect to any series of
Securities, a Security executed by the Company and authenticated and delivered
by the Trustee to the Depository or pursuant to the Depository's instruction,
all in accordance with the Indenture, which shall be registered in the name of
the Depository or its nominee.


Governmental Authority

         The term "Governmental Authority" means the government of the United
States or of any State or Territory thereof or of the District of Columbia or of
any county, municipality or other political subdivision of any of the foregoing,
or any department, agency, authority or other instrumentality of any of the
foregoing.


Governmental Obligations

         The term "Governmental Obligations" shall mean securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by such
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depository receipt.


                                       4



Indenture

         The term "Indenture" shall mean this instrument as originally executed,
or, if amended or supplemented as herein provided, as so amended or
supplemented, and shall include the terms of a particular series of Securities
established as contemplated by Section 2.01.


Instructions

         The term "Instructions" shall mean instructions acceptable to the
Trustee issued pursuant to a Company Order in connection with a Periodic
Offering and signed by an Authorized Officer. Instructions need not comply with
the provisions of Section 13.06.


Interest

         The term "interest" when used with respect to non-interest bearing
Securities shall mean interest payable after maturity (whether at stated
maturity, upon acceleration or redemption or otherwise) or after the date, if
any, on which the Company becomes obligated to acquire a Security, whether by
purchase or otherwise.


Interest Payment Date

         The term "Interest Payment Date" when used with respect to any
installment of interest on a Security of a particular series shall mean the date
specified in such Security or in a Board Resolution, Company Order or an
indenture supplemental hereto with respect to such series as the fixed date on
which an installment of interest with respect to Securities of that series is
due and payable.


Officers' Certificate

         The term "Officers' Certificate" shall mean a certificate signed by an
Authorized Officer and by the Secretary or Assistant Secretary of the Company.
Each such certificate shall include the statements provided for in Section
13.06, if and to the extent required by the provisions hereof.


Opinion of Counsel

         The term "Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be the General Counsel of or counsel for the Company.
Each such opinion shall include the statements provided for in Section 13.06, if
and to the extent required by the provisions hereof.


Original Issue Discount Security

         The term "Original Issue Discount Security" means any Security which
(i) is issued at a price lower than the amount payable upon the maturity thereof
and (ii) provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 6.01(b).


                                       5



Outstanding

         The term "outstanding", when used with reference to Securities of any
series, shall, subject to the provisions of Section 8.04, mean, as of any
particular time, all Securities of that series theretofore authenticated and
delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or which have previously been canceled; (b)
Securities or portions thereof for the payment or redemption of which monies or
Eligible Obligations in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Company) or shall have
been set aside and segregated in trust by the Company (if the Company shall act
as its own paying agent); provided, however, that if such Securities or portions
of such Securities are to be redeemed prior to the maturity thereof, notice of
such redemption shall have been given as in Article Three provided, or provision
satisfactory to the Trustee shall have been made for giving such notice; and (c)
Securities in lieu of or in substitution for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07. The
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for purposes of this Indenture shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof.


Periodic Offering

         The term "Periodic Offering" means an offering of Securities of a
series from time to time, during which any or all of the specific terms of the
Securities, including without limitation the rate or rates of interest, if any,
thereon, the maturity or maturities thereof and the redemption provisions, if
any, with respect thereto, are to be determined by the Company or its agents
upon the issuance of such Securities.


Person

         The term "person" means any individual, corporation, partnership,
limited liability company, joint venture, trust or unincorporated organization
or any Governmental Authority.


Place of Payment

         The term "Place of Payment" shall mean the place or places where the
principal of and interest, if any, on the Securities of any series are payable
as specified in accordance with Section 2.01.


Predecessor Security

         The term "Predecessor Security" of any particular Security shall mean
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.


                                       6



Responsible Officer

         The term "Responsible Officer" when used with respect to the Trustee
shall mean the chairman of the board of directors, the president, any vice
president, the secretary, the treasurer, any trust officer, any corporate trust
officer or any other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of his or her knowledge of and familiarity with the particular
subject.


Security or Securities

         The term "Security" or "Securities" shall mean any Security or
Securities, as the case may be, authenticated and delivered under this
Indenture.


Securityholder

         The term "Securityholder", "holder of Securities" or "registered
holder" shall mean the person or persons in whose name or names a particular
Security shall be registered on the books of the Company kept for that purpose
in accordance with the terms of this Indenture.


series

         The term "series" means a series of Securities established pursuant to
this Indenture and includes, if the context so requires, each Tranche thereof.


Tranche

         The term "Tranche" means Securities which (a) are of the same series
and (b) have identical terms except as to terms that may vary as specified in a
Company Order or supplemental indenture.


Trustee

         The term "Trustee" shall mean BNY Midwest Trust Company, and, subject
to the provisions of Article Seven, shall also include its successors and
assigns, and, if at any time there is more than one person acting in such
capacity hereunder, "Trustee" shall mean each such person. The term "Trustee" as
used with respect to a particular series of the Securities shall mean the
trustee with respect to that series.


Trust Indenture Act

         The term "Trust Indenture Act", subject to the provisions of Sections
9.01, 9.02, and 10.01, shall mean the Trust Indenture Act of 1939, as amended
and in effect at the date of execution of this Indenture.


United States

         The term "United States" means the United States of America, its
territories, its possessions and other areas subject to its political
jurisdiction.

                                       7




                                   ARTICLE II
                      ISSUE, DESCRIPTION, TERMS, EXECUTION,
                     REGISTRATION AND EXCHANGE OF SECURITIES

         SECTION 2.01. DESIGNATION, TERMS, AMOUNT, AUTHENTICATION AND DELIVERY
OF SECURITIES. The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

         The Securities may be issued from time to time in one or more series
and in one or more Tranches thereof. Each series shall be authorized by a
Company Order or Orders and/or one or more indentures supplemental hereto, which
shall specify whether the Securities of such series shall be subject to a
Periodic Offering. The Company Order or Orders or supplemental indenture and, in
the case of a Periodic Offering, Instructions or other procedures acceptable to
the Trustee specified in such Company Order or Orders, shall establish the terms
of the series, which may include the following:

                  (a) the title and designation of the Securities and the
series;

                  (b) imitations on the aggregate principal amount of the
Securities to be authenticated and delivered under this Indenture as part of
such series (except for Securities authenticated and delivered upon registration
of transfer of, in exchange for or in lieu of other Securities of that series);

                  (c) the stated maturity or maturities of such series;

                  (d) the date or dates from which interest shall accrue, the
Interest Payment Dates on which such interest will be payable or the manner of
determination of such Interest Payment Dates and the record date for the
determination of holders to whom interest is payable on any such Interest
Payment Date;

                  (e) the interest rate or rates (which may be fixed or
variable), or method of calculation of such rate or rates, for such series;

                  (f) the terms, if any, regarding the redemption, purchase or
repayment of such series (whether at the option of the Company or a holder of
the Securities of such series and whether pursuant to a sinking fund or
analogous provisions, including payments made in cash in anticipation of future
sinking fund obligations), including redemption, purchase or repayment date or
dates of such series, if any, and the price or prices and other terms and
conditions applicable to such redemption, purchase or repayment (including any
premium);

                  (g) whether or not the Securities of such series shall be
issued in whole or in part in the form of a Global Security and, if so, the
Depositary for such Global Security and the related procedures with respect to
transfer and exchange of such Global Security;

                  (h) the form of the Securities of such series;

                  (i) the maximum annual interest rate, if any, of the
Securities permitted for such series;

                                       8




                  (j) whether the Securities of such series shall be subject to
Periodic Offering;

                  (k) the currency or currencies, including composite
currencies, in which payment of the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, if other than
Dollars;

                  (l) any other information necessary to complete the Securities
of such series;

                  (m) the establishment of any office or agency pursuant to
Section 4.02 hereof and any other place or places which the principal of and
interest, if any, on Securities of that series shall be payable;

                  (n) other than denominations of $1,000 or any integral
multiple thereof, the denominations in which the Securities of the series shall
be issuable;

                  (o) the obligations or instruments, if any, which shall be
considered to be Eligible Obligations in respect of the Securities of such
series denominated in a currency other than Dollars or in a composite currency;

                  (p) whether or not the Securities of such series shall be
issued as Original Issue Discount Securities and the terms thereof, including
the portion of the principal amount thereof which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.01(b);

                  (q) if the principal of and premium, if any, or interest, if
any, on such Securities are to be payable, at the election of the Company or the
holder thereof, in coin or currency, including composite currencies, other than
that in which the Securities are stated to be payable, the period or periods
within which, and the terms and conditions upon which, such election shall be
made;

                  (r) if the amount of payment of principal of and premium, if
any, or interest, if any, on such Securities may be determined with reference to
an index, formula or other method, or based on a coin or currency other than
that in which the Securities are stated to be payable, the manner in which such
amount shall be determined;

                  (s) any addition to, or modification or deletion of, any
covenants or terms herein, including restrictive covenants or Events of Default
provided for with respect to the Securities of the series;

                  (t) the terms and conditions, if any, pursuant to which the
Securities of the series are secured;

                  (u) whether the Securities of the series will be exchangeable
into other securities and, if so, the terms and conditions upon which such
Securities will be so exchangeable, including whether exchange is mandatory, at
the option of the holder, or at the option of the Company, the exchange price,
the exchange period and any provisions pursuant to which the securities to be
received by the holders of such series of Securities would be subject to
adjustment; and

                                       9



                  (v) any other terms of such series not inconsistent with this
Indenture.

         All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to any such Company Order or in any indentures supplemental hereto.

         If any of the terms of the series are established by action taken
pursuant to a Company Order, a copy of an appropriate record of the applicable
Board Resolution shall be certified by the Secretary or an Assistant Secretary
of the Company and delivered to the Trustee at or prior to the delivery of the
Company Order setting forth the terms of that series.

         SECTION 2.02. FORM OF SECURITY AND TRUSTEE'S CERTIFICATE. The
Securities of any series shall be substantially of the tenor and purport (i) as
set forth in one or more indentures supplemental hereto or as provided in a
Company Order, or (ii) with respect to any Tranche of Securities of a series
subject to Periodic Offering, to the extent permitted by any of the documents
referred to in clause (i) above, in Instructions, or by other procedures
acceptable to the Trustee specified in such Company Order or Orders, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Securities of that series may be listed or of the Depository,
or to conform to usage.

         The Trustee's Certificate of Authentication shall be in substantially
the following form:

         "This is one of the Securities of the series designated in accordance
with, and referred to in, the within-mentioned Indenture.

         Dated:

         BNY Midwest Trust Company, as Trustee

         By:___________________________
               Authorized Signatory"

         SECTION 2.03. DATE AND DENOMINATIONS OF SECURITIES, AND PROVISIONS FOR
PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. Except as otherwise specified as
contemplated by Section 2.01, the Securities shall be issuable as registered
Securities and in the denominations of $1,000 or any integral multiple thereof.
The Securities of a particular series shall bear interest payable on the dates
and at the rate or rates specified with respect to that series. Except as
otherwise specified as contemplated by Section 2.01, the principal of and the
interest on the Securities of any series, as well as any premium thereon in case
of redemption thereof prior to maturity, shall be payable in Dollars at the
office or agency of the Company maintained for that purpose. Each Security shall
be dated the date of its authentication.


                                       10




         The interest installment on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date for
Securities of that series shall be paid to the person in whose name said
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment, except that
interest payable on redemption or maturity shall be payable as set forth in the
Company Order or indenture supplemental hereto establishing the terms of such
series of Securities. Except as otherwise specified as contemplated by Section
2.01, interest on Securities will be computed on the basis of a 360-day year of
twelve 30-day months.

         Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date for Securities of the
same series (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company, at its election, as provided in clause (1) or clause (2) below:

         (1) The Company may make payment of any Defaulted Interest on
Securities to the persons in whose names such Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Security and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall not be more than 15 nor less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Security Register (as hereinafter defined), not less than 10 days
prior to such special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the persons in whose names
such Securities (or their respective Predecessor Securities) are registered on
such special record date and shall be no longer payable pursuant to the
following clause (2).

         (2) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.

         Unless otherwise set forth in a Company Order or one or more indentures
supplemental hereto establishing the terms of any series of Securities pursuant
to Section 2.01 hereof, the term "regular record date" as used in this Section
with respect to a series of Securities with respect to any Interest Payment Date
for such series shall mean either (i) the fifteenth day of the month or

                                       11



the next Business Day immediately preceding the month in which an Interest
Payment Date established for such series pursuant to Section 2.01 hereof shall
occur, if such Interest Payment Date is the first day of a month, or (ii) the
last day of the month or the next Business Day immediately preceding the month
in which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth
day of a month, whether or not such date is a Business Day.

         Subject to the foregoing provisions of this Section, each Security of a
series delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Security of such series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.

         SECTION 2.04. EXECUTION OF SECURITIES. The Securities shall, subject
to the provisions of Section 2.06, be printed on steel engraved borders or
fully or partially engraved, or legibly typed, as the proper officer of the
Company may determine, and shall be signed on behalf of the Company by an
Authorized Officer. The signature of such Authorized Officer upon the
Securities may be in the form of a facsimile signature of a present or any
future Authorized Officer and may be imprinted or otherwise reproduced on the
Securities and for that purpose the Company may use the facsimile signature
of any person who shall have been an Authorized Officer, notwithstanding the
fact that at the time the Securities shall be authenticated and delivered or
disposed of such person shall have ceased to be an Authorized Officer.

         Only such Securities as shall bear thereon a Certificate of
Authentication substantially in the form established for such Securities,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Securities, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
certificate executed by the Trustee, or by any Authenticating Agent appointed by
the Trustee with respect to such Securities, upon any Security executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered hereunder and that the registered holder
thereof is entitled to the benefits of this Indenture.

         At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with an indenture
supplemental hereto or a Company Order for the authentication and delivery of
such Securities and the Trustee, in accordance with such supplemental indenture
or Company Order, shall authenticate and deliver such Securities; provided,
however, that in the case of Securities offered in a Periodic Offering, the
Trustee shall authenticate and deliver such Securities from time to time in
accordance with Instructions or such other procedures acceptable to the Trustee
as may be specified by or pursuant to such supplemental indenture or Company
Order delivered to the Trustee prior to the time of the first authentication of
Securities of such series.

         In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall receive and (subject to Section 7.01) shall be fully protected in
relying upon, (i) an Opinion of Counsel and/or (ii) an Officers' Certificate,
each stating that the form and terms thereof have been established in conformity
with the provisions of this Indenture; provided, however, that, with respect to
Securities of a series

                                       12


subject to a Periodic Offering, the Trustee shall be entitled to receive such
Opinion of Counsel and/or Officers' Certificate only once at or prior to the
time of the first authentication of Securities of such series and that, in such
opinion or certificate, the opinion or certificate described above may state
that when the terms of such Securities, or each Tranche thereof, shall have been
established pursuant to a Company Order or Orders, supplemental indenture or
indentures, Instruction or Instructions or pursuant to such procedures
acceptable to the Trustee, as may be specified by a Company Order, such terms
will have been established in conformity with the provisions of this Indenture.
Each Opinion of Counsel and Officers' Certificate delivered pursuant to this
Section 2.04 shall include all statements prescribed in Section 13.06(b). Such
Opinion of Counsel shall also be to the effect that when such Securities have
been executed by the Company and authenticated by the Trustee in accordance with
the provisions of this Indenture and delivered to and duly paid for by the
purchasers thereof, they will be valid and legally binding obligations of the
Company, enforceable in accordance with their terms (subject to customary
exceptions) and will be entitled to the benefits of this Indenture.

         With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the forms and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Company Order, Opinion of
Counsel, Instruction, Officers' Certificate and other documents delivered
pursuant to Sections 2.01 and this Section, as applicable, at or prior to the
time of the first authentication of Securities of such series unless and until
such Company Order, Opinion of Counsel, Instruction, Officers' Certificate or
other documents have been superseded or revoked or expire by their terms.

         The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.

         SECTION 2.05. EXCHANGE OF SECURITIES.

                  (a) REGISTRATION AND TRANSFER OF SECURITIES. Securities of any
series may be exchanged upon presentation thereof at the office or agency of the
Company designated for such purpose, for other Securities of such series of
authorized denominations, and for a like aggregate principal amount, upon
payment of a sum sufficient to cover any tax or other governmental charge in
relation thereto, all as provided in this Section. In respect of any Securities
so surrendered for exchange, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in exchange therefor the
Security or Securities of the same series which the Securityholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.

                  (b) SECURITY REGISTER; SECURITIES TO BE ACCOMPANIED BY PROPER
INSTRUMENTS OF TRANSFER. The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose in the Borough of Manhattan, the
City and State of New York, or such other location designated by the Company a
register or registers (herein referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
register the Securities and the transfers of Securities as in this Article
provided and which at

                                       13


all reasonable times shall be open for inspection by the Trustee. The registrar
for the purpose of registering Securities and transfer of Securities as herein
provided shall initially be the Trustee or such other person as may be
subsequently appointed as authorized by Board Resolution or Company Order (the
"Security Registrar").

         Upon surrender for transfer of any Security at the office or agency of
the Company designated for such purpose in the Borough of Manhattan, the City
and State of New York, or other location as aforesaid, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in the name of the transferee or transferees a new Security or Securities of the
same series as the Security presented for a like aggregate principal amount.

         All Securities presented or surrendered for exchange or registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Security Registrar) by a written instrument or instruments of
transfer, in form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by his duly authorized attorney in writing.

                  (c) CHARGES UPON EXCHANGE, TRANSFER OR REGISTRATION OF
SECURITIES. Except as provided in the first paragraph of Section 2.07, no
service charge shall be made for any exchange or registration of transfer of
Securities, or issue of new Securities in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than exchanges pursuant
to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

                  (d) RESTRICTIONS ON TRANSFER OR EXCHANGE AT TIME OF
REDEMPTION. The Company shall neither be required (i) to issue, exchange or
register the transfer of any Securities during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the outstanding Securities of the same series and ending at the
close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for
redemption or as to which the holder thereof has exercised its right, if any, to
require the Company to repurchase such Security in whole or in part, except that
portion of such Security not required to be repurchased. The provisions of this
Section 2.05 are, with respect to any Global Security, subject to Section 2.11
hereof.

         SECTION 2.06. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any series, the Company may execute, and the Trustee
shall authenticate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination, and substantially in the form of
the definitive Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Company. Every temporary Security of
any series shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities of such series in accordance with Section
2.04. Without unnecessary delay the Company will execute and will furnish
definitive Securities of such series and thereupon any or all temporary
Securities of such series may be surrendered in exchange therefor (without
charge to the holders thereof), at the office or agency of the Company
designated for the purpose, and the Trustee shall authenticate


                                       14



and such office or agency shall deliver in exchange for such temporary
Securities an equal aggregate principal amount of definitive Securities of such
series, unless the Company advises the Trustee to the effect that definitive
Securities need not be executed and furnished until further notice from the
Company. Until so exchanged, the temporary Securities of such series shall be
entitled to the same benefits under this Indenture as definitive Securities of
such series authenticated and delivered hereunder.

         SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. In case
any temporary or definitive Security shall become mutilated or be destroyed,
lost or stolen, the Company (subject to the next succeeding sentence) shall
execute, and upon its request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Security of the same series bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Security, or in lieu of and in substitution for the Security so destroyed, lost
or stolen. In every case the applicant for a substituted Security shall furnish
to the Company and to the Trustee such security or indemnity as may be required
by them to save each of them harmless, and, in every case of destruction, loss
or theft, the applicant shall also furnish to the Company and to the Trustee
evidence to their satisfaction of the destruction, loss or theft of the
applicant's Security and of the ownership thereof. The Trustee may authenticate
any such substituted Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any
substituted Security, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith. In case any Security which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Security, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Security) if
the applicant for such payment shall furnish to the Company and to the Trustee
such security or indemnity as they may require to save them harmless, and, in
case of destruction, loss or theft, evidence to the satisfaction of the Company
and the Trustee of the destruction, loss or theft of such Security and of the
ownership thereof.

         Every Security issued pursuant to the provisions of this Section in
substitution for any Security which is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the mutilated, destroyed, lost or stolen Security shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
the same series duly issued hereunder. All Securities shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.

         SECTION 2.08. CANCELLATION OF SURRENDERED SECURITIES. All Securities
surrendered for the purpose of payment, redemption, exchange or registration of
transfer, or for credit against a sinking fund, shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be canceled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of
the

                                       15



provisions of this Indenture. On request of the Company, the Trustee shall
deliver to the Company canceled Securities held by the Trustee. In the absence
of such request the Trustee may dispose of canceled Securities in accordance
with its standard procedures. If the Company shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee for cancellation.

         SECTION 2.09. PROVISIONS OF INDENTURE AND SECURITIES FOR SOLE BENEFIT
OF PARTIES AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and the holders of the Securities,
any legal or equitable right, remedy or claim under or in respect of this
Indenture, or under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole benefit of the
parties hereto and of the holders of the Securities.

         SECTION 2.10. APPOINTMENT OF AUTHENTICATING AGENT. So long as any of
the Securities of any series remain outstanding there may be an Authenticating
Agent for any or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon exchange,
transfer or partial redemption thereof, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Securities by the Trustee shall be
deemed to include authentication by an Authenticating Agent for such series
except for authentication upon original issuance or pursuant to Section 2.07
hereof. Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and which is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease to be eligible
in accordance with these provisions it shall resign immediately.

         Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto. The Company agrees
to pay to each Authenticating Agent from time to time reasonable compensation
for its services under this Section.

         SECTION 2.11. GLOBAL SECURITY.

                  (a) AUTHENTICATION AND DELIVERY; LEGEND. If the Company shall
establish pursuant to Section 2.01 that the Securities of a particular series
are to be issued as a Global

                                       16



Security, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and deliver, a Global Security which (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series, (ii)
shall be registered in the name of the Depository or its nominee, (iii) shall be
authenticated and delivered by the Trustee to the Depository or pursuant to the
Depository's instruction and (iv) shall bear a legend substantially to the
following effect: "Except as otherwise provided in Section 2.11 of the
Indenture, this Security may be transferred, in whole but not in part, only to
another nominee of the Depository or to a successor Depository or to a nominee
of such successor Depository."

                  (b) TRANSFER OF GLOBAL SECURITY. Notwithstanding the
provisions of Section 2.05, the Global Security of a series may be transferred,
in whole but not in part and in the manner provided in Section 2.05, only to
another nominee of the Depository for such series, or to a successor Depository
for such series selected or approved by the Company or to a nominee of such
successor Depository.

                  (c) ISSUANCE OF SECURITIES IN DEFINITIVE FORM. If at any time
the Depository for a series of Securities notifies the Company that it is
unwilling or unable to continue as Depository for such series or if at any time
the Depository for such series shall no longer be registered or in good standing
under the Exchange Act, or other applicable statute or regulation and a
successor Depository for such series is not appointed by the Company within 90
days after the Company receives such notice or becomes aware of such condition,
as the case may be, this Section 2.11 shall no longer be applicable to the
Securities of such series and the Company will execute, and subject to Section
2.05, the Trustee will authenticate and deliver Securities of such series in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security. In addition, the
Company may at any time determine that the Securities of any series shall no
longer be represented by a Global Security and that the provisions of this
Section 2.11 shall no longer apply to the Securities of such series. In such
event the Company will execute, and subject to Section 2.05, the Trustee, upon
receipt of an Officers' Certificate evidencing such determination by the
Company, will authenticate and deliver Securities of such series in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Security
of such series in exchange for such Global Security. Upon the exchange of the
Global Security for such Securities in definitive registered form without
coupons, in authorized denominations, the Global Security shall be canceled by
the Trustee. Such Securities in definitive registered form issued in exchange
for the Global Security pursuant to this Section 2.11(c) shall be registered in
such names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Security Registrar. The Trustee shall deliver such Securities to
the Depository for delivery to the persons in whose names such Securities are so
registered.

         SECTION 2.12. PAYMENT IN PROPER CURRENCY. In the case of the Securities
of any series denominated in any currency other than Dollars or in a composite
currency (the "Required Currency"), except as otherwise specified with respect
to such Securities as contemplated by Section 2.01, the obligation of the
Company to make any payment of the principal thereof, or the premium or interest
thereon, shall not be discharged or satisfied by any tender by the Company,


                                       17




or recovery by the Trustee, in any currency other than the Required Currency,
except to the extent that such tender or recovery shall result in the Trustee
timely holding the full amount of the Required Currency then due and payable. If
any such tender or recovery is in a currency other than the Required Currency,
the Trustee may take such actions as it considers appropriate to exchange such
currency for the Required Currency. The costs and risks of any such exchange,
including, without limitation, the risks of delay and exchange rate fluctuation,
shall be borne by the Company, the Company shall remain fully liable for any
shortfall or delinquency in the full amount of Required Currency then due and
payable, and in no circumstances shall the Trustee be liable therefor except in
the case of its negligence or willful misconduct.

         SECTION 2.13. IDENTIFICATION OF SECURITIES. The Company in issuing
Securities may use "CUSIP" numbers (if then generally in use) and, if so used,
the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience
to holders of Securities; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or contained in any notice of redemption and that reliance may
be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of
such numbers. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers.

                                   ARTICLE III
                    REDEMPTION OF SECURITIES AND SINKING FUND
                                   PROVISIONS

         SECTION 3.01. REDEMPTION OF SECURITIES. The Company may redeem the
Securities of any series issued hereunder on and after the dates and in
accordance with the terms established for such series pursuant to Section 2.01
hereof.

         SECTION 3.02. ACTION TO REDEEM SECURITIES.

                  (a) NOTICE OF REDEMPTION. In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a portion of the
Securities of any series in accordance with the right reserved so to do, it
shall give notice of such redemption to holders of the Securities of such series
to be redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before the date fixed
for redemption of that series to such holders at their last addresses as they
shall appear upon the Security Register. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the registered holder receives the notice. In any case, failure
duly to give such notice to the holder of any Security of any series designated
for redemption in whole or in part, or any defect in the notice, shall not
affect the validity of the proceedings for the redemption of any other
Securities of such series or any other series. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption or
subject to compliance with certain conditions provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with any such restriction or
condition.

         Unless otherwise so provided as to a particular series of Securities,
if at the time of mailing of any notice of redemption the Company shall not have
deposited with the paying agent

                                       18



an amount in cash sufficient to redeem all of the Securities called for
redemption, including accrued interest to the date fixed for redemption, such
notice shall state that it is subject to the receipt of redemption moneys by the
paying agent on or before the date fixed for redemption (unless such redemption
is mandatory) and such notice shall be of no effect unless such moneys are so
received on or before such date.

         Each such notice of redemption shall identify the Securities to be
redeemed (including CUSIP numbers, if any), specify the date fixed for
redemption and the redemption price at which Securities of that series are to be
redeemed, and shall state that payment of the redemption price of such
Securities to be redeemed will be made at the office or agency of the Company,
upon presentation and surrender of such Securities, that interest accrued to the
date fixed for redemption will be paid as specified in said notice, that from
and after said date interest will cease to accrue and that the redemption is for
a sinking fund, if such is the case. If less than all the Securities of a series
are to be redeemed, the notice to the holders of Securities of that series to be
redeemed in whole or in part shall specify the particular Securities to be so
redeemed. In case any Security is to be redeemed in part only, the notice which
relates to such Security shall state the portion of the principal amount thereof
to be redeemed, and shall state that on and after the redemption date, upon
surrender of such Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be issued.

                  (b) NOTICE TO TRUSTEE OF SECURITIES TO BE REDEEMED. If less
than all the Securities of a series are to be redeemed, the Company shall give
the Trustee at least 45 days' notice in advance of the date fixed for redemption
(unless the Trustee shall agree to a shorter period) as to the aggregate
principal amount of Securities of the series to be redeemed, and thereupon the
Trustee shall select, by lot or in such other manner as it shall deem
appropriate and fair in its discretion and which may provide for the selection
of a portion or portions (equal to the smallest denomination of one whole
Security of such series or any integral multiple thereof) of the principal
amount of such Securities of a denomination larger than the smallest
denomination of one whole Security of such series, the Securities to be redeemed
and shall thereafter promptly notify the Company in writing of the numbers of
the Securities to be redeemed, in whole or in part.

         The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by an Authorized Officer, instruct the Trustee
or any paying agent to call all or any part of the Securities of a particular
series for redemption and to give notice of redemption in the manner set forth
in this Section, such notice to be in the name of the Company or its own name as
the Trustee or such paying agent may deem advisable. In any case in which notice
of redemption is to be given by the Trustee or any such paying agent, the
Company shall deliver or cause to be delivered to, or permit to remain with, the
Trustee or such paying agent, as the case may be, such Security Register,
transfer books or other records, or suitable copies or extracts therefrom,
sufficient to enable the Trustee or such paying agent to give any notice by mail
that may be required under the provisions of this Section.

         SECTION 3.03. PAYMENT OF SECURITIES CALLED FOR REDEMPTION.

                  (a) WHEN SECURITIES CALLED FOR REDEMPTION BECOME DUE AND
PAYABLE. If the giving of notice of redemption shall have been completed as
above provided, the Securities or

                                       19



portions of Securities of the series to be redeemed specified in such notice
shall become due and payable on the date and at the place stated in such notice
at the applicable redemption price, together with, subject to the Company Order
or supplemental indenture hereto establishing the terms of such series of
Securities, interest accrued to the date fixed for redemption and interest on
such Securities or portions of Securities shall cease to accrue on and after the
date fixed for redemption, unless the Company shall default in the payment of
such redemption price and accrued interest with respect to any such Security or
portion thereof. On presentation and surrender of such Securities on or after
the date fixed for redemption at the place of payment specified in the notice,
said Securities shall be paid and redeemed at the applicable redemption price
for such series, together with, subject to the Company Order or supplemental
indenture hereto establishing the terms of such series of Securities, interest
accrued thereon to the date fixed for redemption.

                  (b) RECEIPT OF NEW SECURITY UPON PARTIAL PAYMENT. Upon
presentation of any Security of such series which is to be redeemed in part
only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Security is presented shall deliver to the holder
thereof, at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations in principal amount equal to the unredeemed
portion of the Security so presented.

         SECTION 3.04. SINKING FUND FOR SECURITIES. The provisions of this
Section 3.04 and Sections 3.05 and 3.06 shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 2.01 for Securities of such series.

         The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 3.05. Each sinking fund payment shall be applied to the
redemption of Securities of such series as provided for by the terms of
Securities of such series.

         SECTION 3.05. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (i) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (ii) may apply as a credit Securities of a
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any mandatory sinking fund payment; provided
that such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the redemption price
specified in such Securities for redemption through operation of the mandatory
sinking fund and the amount of such mandatory sinking fund payment shall be
reduced accordingly.

         SECTION 3.06. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than
45 days prior to each sinking fund payment date for any series of Securities,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment

                                       20


for that series pursuant to the terms of that series, the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 3.05 and the basis for such credit and will, together
with such Officers' Certificate, deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.02 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.02, except that the notice of redemption
shall also state that the Securities of such series are being redeemed by
operation of the sinking fund and the sinking fund payment date. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Section 3.03.

                                   ARTICLE IV
                       PARTICULAR COVENANTS OF THE COMPANY

         The Company covenants and agrees for each series of the Securities as
follows:

         SECTION 4.01. PAYMENT OF PRINCIPAL (AND PREMIUM IF ANY) AND INTEREST ON
SECURITIES. The Company will duly and punctually pay or cause to be paid the
principal of (and premium, if any) and interest on the Securities of that series
at the time and place and in the manner provided herein and established with
respect to such Securities.

         SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY FOR PAYMENT,
REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES. So long as any series of the
Securities remain outstanding, the Company agrees to maintain an office or
agency with respect to each such series, which shall be in the Borough of
Manhattan, the City and State of New York or at such other location or locations
as may be designated as provided in this Section 4.02, where (i) Securities of
that series may be presented for payment, (ii) Securities of that series may be
presented as hereinabove authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by an Authorized Officer and delivered to the
Trustee, designate some other office or agency for such purposes or any of them.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, notices and demands. The Trustee or its agent
will initially act as paying agent for the Securities.

         The Company may also from time to time, by written notice signed by an
Authorized Officer and delivered to the Trustee, designate one or more other
offices or agencies for the foregoing purposes within or outside the Borough of
Manhattan, City of New York, and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligations to maintain an office or
agency in the Borough of Manhattan, City of New York for the foregoing purposes.
The Company will give prompt written notice to the Trustee of any change in the
location of any such other office or agency.

                                       21




         SECTION 4.03. PAYING AGENT.

                  (a) DUTIES OF PAYING AGENT. If the Company shall appoint one
or more paying agents for all or any series of the Securities, other than the
Trustee, the Company will cause each such paying agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section:

                  (1) that it will hold all sums held by it as such agent for
         the payment of the principal of (and premium, if any) or interest on
         the Securities of that series (whether such sums have been paid to it
         by the Company or by any other obligor of such Securities) in trust for
         the benefit of the persons entitled thereto;

                  (2) that it will give the Trustee prompt notice of any failure
         by the Company (or by any other obligor of such Securities) to make any
         payment of the principal of (and premium, if any) or interest on the
         Securities of that series when the same shall be due and payable;

                  (3) that it will, at any time during the continuance of any
         failure referred to in the preceding paragraph (a)(2) above, upon the
         written request of the Trustee, forthwith pay to the Trustee all sums
         so held in trust by such paying agent; and

                  (4) that it will perform all other duties of paying agent as
         set forth in this Indenture.

                  (b) COMPANY AS PAYING AGENT. If the Company shall act as its
own paying agent with respect to any series of the Securities, it will on or
before each due date of the principal of (and premium, if any) or interest on
Securities of that series, set aside, segregate and hold in trust for the
benefit of the persons entitled thereto a sum sufficient to pay such principal
(and premium, if any) or interest so becoming due on Securities of that series
until such sums shall be paid to such persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of such action, or any failure (by
it or any other obligor on such Securities) to take such action. Whenever the
Company shall have one or more paying agents for any series of Securities, it
will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities of that series, deposit with the paying agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

                  (c) HOLDING SUMS IN TRUST. Anything in this Section to the
contrary notwithstanding, (i) the agreement to hold sums in trust as provided in
this Section is subject to the provisions of Section 11.04, and (ii) the Company
may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or direct any paying agent to pay,
to the Trustee all sums held in trust by the Company or such paying agent, such
sums to be held by the Trustee upon the same terms and conditions as those upon
which such sums were held by the Company or such paying agent; and, upon such
payment by any paying agent to the Trustee, such paying agent shall be released
from all further liability with respect to such money.

                                       22



         SECTION 4.04. APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 7.10, a Trustee, so that there
shall at all times be a Trustee hereunder.

         SECTION 4.05. RESTRICTION ON CONSOLIDATION, MERGER OF TRUSTEE. The
Company will not, while any of the Securities remain outstanding, consolidate
with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article Ten hereof are complied with.

         SECTION 4.06. ORIGINAL ISSUE DISCOUNT SECURITY. In the event that the
Company issues an Original Issue Discount Security, the Company shall file with
the Trustee at or prior to the time of the authentication of such Original Issue
Discount Security a written notice, in such form as mutually agreed upon by the
Company and the Trustee, specifying the amount of original issue discount that
will be accrued on such Original Issue Discount Security in each calendar year
from the date of issuance to the maturity thereof.

                                    ARTICLE V
                    SECURITYHOLDERS' LISTS AND REPORTS BY THE
                             COMPANY AND THE TRUSTEE

         SECTION 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF SECURITYHOLDERS. The Company will furnish or cause to be furnished
to the Trustee (a) on each regular record date (as defined in Section 2.03) for
the Securities of each Tranche of a series a list (at intervals of at least
every six months), in such form as the Trustee may reasonably require, of the
names and addresses of the holders of such Tranche of Securities as of such
regular record date, provided, that the Company shall not be obligated to
furnish or cause to be furnished such list at any time that the list shall not
differ in any respect from the most recent list furnished to the Trustee by the
Company and (b) at such other times as the Trustee may request in writing within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished; provided, however, no such list need be furnished for any series
for which the Trustee shall be the Security Registrar.

         SECTION 5.02. RESPONSIBILITIES OF TRUSTEE RELATING TO SECURITYHOLDER
INFORMATION.

                  (a) TRUSTEE TO PRESERVE INFORMATION AS TO NAMES AND ADDRESSES
OF SECURITYHOLDERS. The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Securities contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if
acting in such capacity).

                  (b) TRUSTEE MAY DESTROY LIST OF SECURITYHOLDERS ON CERTAIN
CONDITIONS. The Trustee may destroy any list furnished to it as provided in
Section 5.01 upon receipt of a new list so furnished.

                                       23



                  (c) TRUSTEE TO MAKE INFORMATION AS TO NAMES AND ADDRESSES OF
SECURITYHOLDERS AVAILABLE TO CERTAIN APPLICANTS. In case three or more holders
of Securities of a series (hereinafter referred to as "applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other holders of Securities of such series
or holders of all Securities with respect to their rights under this Indenture
or under such Securities, and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either:

                  (1) afford to such applicants access to the information
         preserved at the time by the Trustee in accordance with the
         provisions of subsection (a) of this Section 5.02; or

                  (2) inform such applicants as to the approximate number of
         holders of Securities of such series or of all Securities, as the
         case may be, whose names and addresses appear in the information
         preserved at the time by the Trustee, in accordance with the
         provisions of subsection (a) of this Section 5.02, and as to the
         approximate cost of mailing to such Securityholders the form of
         proxy or other communication, if any, specified in such application.

                  (d) PROCEDURE IF TRUSTEE ELECTS NOT TO MAKE INFORMATION
AVAILABLE TO APPLICANTS. If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall, upon the written
request of such applicants, mail to each holder of such series or of all
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 5.02, a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
Securities of such series or of all Securities, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Securityholders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise, the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.

                  (e) COMPANY AND TRUSTEE NOT ACCOUNTABLE FOR DISCLOSURE OF
INFORMATION. Each and every holder of the Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent nor any Security Registrar shall be liable
under any law to the extent provided under the Trust Indenture

                                       24



Act by reason of the disclosure of any such information as to the names and
addresses of the holders of Securities in accordance with the provisions of
subsection (c) of this Section, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(c).

         SECTION 5.03. DELIVERY OBLIGATIONS OF COMPANY.

                  (a) ANNUAL AND OTHER REPORTS TO BE FILED BY COMPANY WITH
TRUSTEE. The Company covenants and agrees to file with the Trustee, within 30
days after the Company is required to file the same with the Commission, a copy
of the annual reports and of the information, documents and other reports (or a
copy of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Company is not required to file information, documents or
reports pursuant to either of such sections, then to file with the Trustee and,
unless the Commission shall not accept such information, documents or reports,
the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act, in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such
rules and regulations.

                  (b) ADDITIONAL INFORMATION AND REPORTS TO BE FILED WITH
TRUSTEE AND SECURITIES AND EXCHANGE COMMISSION. The Company covenants and agrees
to file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.

                  (c) SUMMARIES OF INFORMATION AND REPORTS TO BE TRANSMITTED BY
COMPANY TO SECURITYHOLDERS. The Company covenants and agrees to transmit by
mail, first class postage prepaid, and may also transit by reputable over-night
delivery service which provides for evidence of receipt, to the Securityholders,
as their names and addresses appear upon the Security Register, within 30 days
after the filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.

                  (d) ANNUAL CERTIFICATE TO BE FURNISHED TO TRUSTEE. The Company
covenants and agrees to furnish to the Trustee, on or before May 15 in each
calendar year in which any of the Securities are outstanding, or on or before
such other day in each calendar year as the Company and the Trustee may from
time to time agree upon, a certificate from the principal executive officer,
principal financial officer or principal accounting officer, as to his or her
knowledge, of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture.

                                       25



                  (e) EFFECT OF DELIVERY TO TRUSTEE. Delivery of such
information, documents or reports to the Trustee pursuant to Section 5.03(a) or
5.03(b) is for informational purposes only and the Trustee's receipt thereof
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including, in the case of
Section 5.03(b), the Company's compliance with any of the covenants hereunder.

         SECTION 5.04. DELIVERY OBLIGATIONS OF TRUSTEE.

                  (a) TRUSTEE TO TRANSMIT ANNUAL REPORT TO SECURITYHOLDERS. On
or before May 15 in each year in which any of the Securities are outstanding,
the Trustee shall transmit by mail, first class postage prepaid, to the
Securityholders, as their names and addresses appear upon the Security Register,
a brief report dated as of the preceding May 15, with respect to any of the
following events which may have occurred within the previous twelve months (but
if no such event has occurred within such period no report need be transmitted):

                  (1) any change to its eligibility under Section 7.09, and its
         qualifications under Section 310 of the Trust Indenture Act;

                  (2) the creation of or any material change to a relationship
         specified in paragraphs (1) through (10) of Section 310(b) of the Trust
         Indenture Act;

                  (3) the character and amount of any advances (and if the
         Trustee elects so to state, the circumstances surrounding the making
         thereof) made by the Trustee (as such) which remain unpaid on the date
         of such report, and for the reimbursement of which it claims or may
         claim a lien or charge, prior to that of the Securities, on any
         property or funds held or collected by it as trustee if such advances
         so remaining unpaid aggregate more than 1/2 of 1% of the principal
         amount of the Securities outstanding on the date of such report;

                  (4) any change to the amount, interest rate, and maturity date
         of all other indebtedness owing by the Company, or by any other obligor
         on the Securities, to the Trustee in its individual capacity, on the
         date of such report, with a brief description of any property held as
         collateral security therefor, except any indebtedness based upon a
         creditor relationship arising in any manner described in paragraphs
         (2), (3), (4) or (6) of Section 311(b) of the Trust Indenture Act;

                  (5) any change to the property and funds, if any, physically
         in the possession of the Trustee as such on the date of such report;

                  (6) any release, or release and substitution, of property
         subject to the lien, if any, of this Indenture (and the consideration
         therefor, if any) which it has not previously reported;

                  (7) any additional issue of Securities which the Trustee has
         not previously reported; and

                  (8) any action taken by the Trustee in the performance of its
         duties under this Indenture which it has not previously reported and
         which in its opinion materially affects


                                       26


         the Securities or the Securities of any series, except any action in
         respect of a default, notice of which has been or is to be withheld
         by it in accordance with the provisions of Section 6.07.

                  (b) TRUSTEE TO TRANSMIT CERTAIN FURTHER REPORTS TO
SECURITYHOLDERS. The Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Securities of any series on property
or funds held or collected by it as Trustee, and which it has not previously
reported pursuant to this subsection if such advances remaining unpaid at any
time aggregate more than 10% of the principal amount of Securities of such
series outstanding at such time, such report to be transmitted within 90 days
after such time.

                  (c) COPIES OF REPORTS TO BE FILED WITH STOCK EXCHANGES AND
SECURITIES AND EXCHANGE COMMISSION. A copy of each such report shall, at the
time of such transmission to Securityholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Securities are listed (if so
listed) and also with the Commission. The Company agrees to notify the Trustee
when any Securities become listed on any stock exchange or delisted therefrom.

                                   ARTICLE VI
                   REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
                               ON EVENT OF DEFAULT

         SECTION 6.01. EVENTS OF DEFAULT.

                  (a) EVENTS OF DEFAULT DEFINED. Whenever used herein with
respect to Securities of a particular series, "Event of Default" means any one
or more of the following events which has occurred and is continuing:

                  (1) default in the payment of any installment of interest upon
         any of the Securities of that series, as and when the same shall become
         due and payable, and continuance of such default for a period of 30
         days;

                  (2) default in the payment of the principal of (or premium, if
         any, on) any of the Securities of that series as and when the same
         shall become due and payable whether at maturity, upon redemption,
         pursuant to any sinking fund obligation, by declaration or otherwise,
         and continuance of such default for a period of three Business Days;

                  (3) failure on the part of the Company duly to observe or
         perform any other of the covenants or agreements on the part of the
         Company with respect to that series contained in such Securities or
         otherwise established with respect to that series of Securities
         pursuant to Section 2.01 hereof or contained in this Indenture (other
         than a

                                       27



         covenant or agreement which has been expressly included in this
         Indenture solely for the benefit of one or more series of Securities
         other than such series) for a period of 90 days after the date on which
         written notice of such failure, requiring the same to be remedied and
         stating that such notice is a "Notice of Default" hereunder, shall have
         been given to the Company by the Trustee, by registered or certified
         mail, or to the Company and the Trustee by the holders of at least 33%
         in principal amount of the Securities of that series at the time
         outstanding;

                  (4) a decree or order by a court having jurisdiction in the
         premises shall have been entered adjudging the Company as bankrupt or
         insolvent, or approving as properly filed a petition seeking
         liquidation or reorganization of the Company under the Federal
         Bankruptcy Code or any other similar applicable Federal or State law,
         and such decree or order shall have continued unvacated and unstayed
         for a period of 90 consecutive days; or an involuntary case shall be
         commenced under such Code in respect of the Company and shall continue
         undismissed for a period of 90 consecutive days or an order for relief
         in such case shall have been entered; or a decree or order of a court
         having jurisdiction in the premises shall have been entered for the
         appointment on the ground of insolvency or bankruptcy of a receiver or
         custodian or liquidator or trustee or assignee in bankruptcy or
         insolvency of the Company or of its property, or for the winding up or
         liquidation of its affairs, and such decree or order shall have
         remained in force unvacated and unstayed for a period of 90 consecutive
         days;

                  (5) the Company shall institute proceedings to be adjudicated
         a voluntary bankrupt, or shall consent to the filing of a bankruptcy
         proceeding against it, or shall file a petition or answer or consent
         seeking liquidation or reorganization under the Federal Bankruptcy Code
         or any other similar applicable Federal or State law, or shall consent
         to the filing of any such petition, or shall consent to the appointment
         on the ground of insolvency or bankruptcy of a receiver or custodian or
         liquidator or trustee or assignee in bankruptcy or insolvency of it or
         of its property, or shall make an assignment for the benefit of
         creditors; or

                  (6) the occurrence of any other Event of Default with respect
         to Securities of such series, as contemplated by Section 2.01 hereof.

                  (b) ACCELERATION OF MATURITY UPON EVENT OF DEFAULT. The
Company shall file with the Trustee written notice of the occurrence of any
Event of Default within five Business Days of the Company's becoming aware of
any such Event of Default. In each and every such case, unless the principal of
all the Securities of that series shall have already become due and payable,
either the Trustee or the holders of not less than 33% in aggregate principal
amount of the Securities of that series then outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by such Securityholders),
may declare the principal (or, if any of such Securities are Original Issue
Discount Securities, such portion of the principal amount thereof as may be
specified by their terms as contemplated by Section 2.01) of all the Securities
of that series to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable, anything
contained in this Indenture or in the Securities of that series or established
with respect to that series pursuant to Section 2.01 hereof to the contrary
notwithstanding.

                                       28




                  (c) WAIVER OF DEFAULT AND RESCISSION OF DECLARATION OF
MATURITY. Section 6.01(b), however, is subject to the condition that if, at any
time after the principal of the Securities of that series shall have been so
declared due and payable, and before any judgment or decree for the payment of
the monies due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay all
matured installments of interest upon all the Securities of that series and the
principal of (and premium, if any, on) any and all Securities of that series
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and, to the extent that such payment is
enforceable under applicable law, upon overdue installments of interest, at the
rate per annum expressed in the Securities of that series to the date of such
payment or deposit) and the amount payable to the Trustee under Section 7.06,
and any and all defaults under the Indenture, other than the nonpayment of
principal on Securities of that series which shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06, then and
in every such case the holders of a majority in aggregate principal amount of
the Securities of that series then outstanding, by written notice to the Company
and to the Trustee, may rescind and annul such declaration and its consequences
with respect to that series of Securities; but no such rescission and annulment
shall extend to or shall affect any subsequent default, or shall impair any
right consequent thereon.

                  (d) RESTORATION OF FORMER POSITION AND RIGHTS UPON CURING
DEFAULT. In case the Trustee shall have proceeded to enforce any right with
respect to Securities of that series under this Indenture and such proceedings
shall have been discontinued or abandoned because of such rescission or
annulment or for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.

         SECTION 6.02. RIGHTS OF TRUSTEE UPON DEFAULT.

                  (a) COVENANT OF COMPANY TO PAY TO TRUSTEE WHOLE AMOUNT DUE ON
SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL (AND PREMIUM, IF ANY).
The Company covenants that in case an Event of Default described in subsection
6.01(a)(1) or (a)(2) shall have occurred and be continuing, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Securities of that series, the whole amount that then shall have become due
and payable on all such Securities for principal (and premium, if any) or
interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law and without duplication of any other amounts
paid by the Company in respect thereof) upon overdue installments of interest at
the rate per annum expressed in the Securities of that series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, and the amount payable to the Trustee under Section
7.06.

                  (b) TRUSTEE MAY RECOVER JUDGMENT FOR WHOLE AMOUNT DUE ON
SECURITIES ON FAILURE OF COMPANY TO PAY. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final

                                       29



decree, and may enforce any such judgment or final decree against the Company or
other obligor upon the Securities of that series and collect in the manner
provided by law out of the property of the Company or other obligor upon the
Securities of that series wherever situated the monies adjudged or decreed to be
payable.

                  (c) PROOF OF CLAIM BY TRUSTEE IN BANKRUPTCY, REORGANIZATION OR
RECEIVERSHIP PROCEEDING. In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or other
judicial proceedings affecting the Company, any other obligor on such
Securities, or the creditors or property of either, the Trustee shall have power
to intervene in such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise provided by law) be
entitled to file such proofs of claim and other papers and documents as may be
necessary or advisable in order to have the claims of the Trustee and of the
holders of Securities of such series allowed for the entire amount due and
payable by the Company or such other obligor under this Indenture at the date of
institution of such proceedings and for any additional amount which may become
due and payable by the Company or such other obligor after such date, and to
collect and receive any monies or other property payable or deliverable on any
such claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders of
Securities of such series to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
such Securityholders, to pay to the Trustee any amount due it under Section
7.06.

                  (d) RIGHTS OF ACTION AND OF ASSERTING CLAIMS MAY BE ENFORCED
BY TRUSTEE WITHOUT POSSESSION OF SECURITIES. All rights of action and of
asserting claims under this Indenture, or under any of the terms established
with respect to Securities of that series, may be enforced by the Trustee
without the possession of any of such Securities, or the production thereof at
any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for payment
to the Trustee of any amounts due under Section 7.06, be for the ratable benefit
of the holders of the Securities of such series.

         In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.

         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities of that series or the rights of any holder thereof or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.

                                       30




         SECTION 6.03. APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to Section 6.02 with respect to a particular
series of Securities shall be applied in the order following, at the date or
dates fixed by the Trustee and, in case of the distribution of such monies on
account of principal (or premium, if any) or interest, upon presentation of the
several Securities of that series, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:

         FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 7.06;

         SECOND: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively; and

         THIRD: To the Company.

         SECTION 6.04. LIMITATION ON SUITS BY HOLDERS OF SECURITIES. No holder
of any Security of any series shall have any right by virtue or by availing of
any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to Securities of
such series specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 33% in aggregate principal amount of
the Securities of such series then outstanding shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have failed to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by the taker and holder of every Security of such series
with every other such taker and holder and the Trustee, that no one or more
holders of Securities of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Securities, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Securities of such series. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.

         Notwithstanding any other provisions of this Indenture, however, the
right of any holder of any Security to receive payment of the principal of (and
premium, if any) and interest on such Security, as therein provided, on or after
the respective due dates expressed in such Security (or in the case of
redemption, on the redemption date), or to institute suit for the enforcement of
any such payment on or after such respective dates or redemption date, shall not
be impaired or affected without the consent of such holder.

                                       31



         SECTION 6.05. REMEDIES; DELAY OR OMISSION IN EXERCISE OF RIGHTS.

                  (a) REMEDIES CUMULATIVE. All powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any others thereof or of any
other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Securities.

                  (b) DELAY OR OMISSION IN EXERCISE OF RIGHTS NOT WAIVER OF
DEFAULT. No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.

         SECTION 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF
SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULTS. The holders of a majority in
aggregate principal amount of the Securities of any series at the time
outstanding, determined in accordance with Section 8.04, shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee with respect to such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this Indenture or unduly
prejudicial to the rights of holders of Securities of any other series at the
time outstanding determined in accordance with Section 8.04 not parties thereto.
Subject to the provisions of Section 7.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding so
directed might involve the Trustee in personal liability. The holders of a
majority in aggregate principal amount of the Securities of any series at the
time outstanding affected thereby, determined in accordance with Section 8.04,
may on behalf of the holders of all of the Securities of such series waive any
past default in the performance of any of the covenants contained herein or
established pursuant to Section 2.01 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 Securities of that series as and when the
same shall become due by the terms of such Securities otherwise than by
acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal otherwise than by acceleration
and any premium has been deposited with the Trustee (in accordance with Section
6.01(c))) or a call for redemption of Securities of that series. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Securities
of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.

         SECTION 6.07. NOTICE OF KNOWN DEFAULTS. The Trustee shall, within 90
days after the occurrence of a default with respect to a particular series,
transmit by mail, first class postage prepaid, to the holders of Securities of
that series, as their names and addresses appear upon the Security Register,
notice of all defaults with respect to that series known to the Trustee, unless

                                       32



such defaults shall have been cured or waived before the giving of such notice
(the term "defaults" for the purposes of this Section being hereby defined to be
the events specified in subsections (1), (2), (3), (4), (5), (6) and (7) of
Section 6.01(a), not including any periods of grace provided for therein and
irrespective of the giving of notice provided for by subsection (4) of Section
6.01(a)); provided, that, except in the case of default in the payment of the
principal of (or premium, if any) or interest on any of the Securities of that
series or in the payment of any sinking or analogous fund installment
established with respect to that series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers, of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the holders of Securities of that series; provided further, that in
the case of any default of the character specified in Section 6.01(a)(4) with
respect to Securities of such series no such notice to the holders of the
Securities of that series shall be given until at least 30 days after the
occurrence thereof.

         The Trustee shall not be deemed to have knowledge of any default,
except (i) a default under subsection (a)(1), (a)(2) or (a)(3) of Section 6.01
as long as the Trustee is acting as paying agent for such series of Securities
or (ii) any default as to which the Trustee shall have received written notice
or a Responsible Officer charged with the administration of this Indenture shall
have obtained written notice.

         SECTION 6.08. UNDERTAKING TO PAY COSTS IN CERTAIN SUITS UNDER INDENTURE
OR AGAINST TRUSTEE. All parties to this Indenture agree, and each holder of any
Securities by his or her acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
outstanding Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.

                                  ARTICLE VII
                             CONCERNING THE TRUSTEE

         SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE.

                  (a) UPON EVENT OF DEFAULT. The Trustee, prior to the
occurrence of an Event of Default with respect to Securities of a series and
after the curing of all Events of Default with respect to Securities of that
series which may have occurred, shall undertake to perform with respect to
Securities of such series such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee. In case an Event of Default with
respect to Securities of a series has occurred

                                       33


(which has not been cured or waived), the Trustee shall exercise with respect to
Securities of that series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

                  (b) NEGLIGENCE OR WILLFUL MISCONDUCT BY TRUSTEE. No provision
of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                  (1) prior to the occurrence of an Event of Default with
         respect to Securities of a series and after the curing or waiving of
         all such Events of Default with respect to that series which may have
         occurred:

                       (i) the duties and obligations of the Trustee shall with
         respect to Securities of such series be determined solely by the
         express provisions of this Indenture, and the Trustee shall not be
         liable with respect to Securities of such series except for the
         performance of such duties and obligations as are specifically set
         forth in this Indenture, and no implied covenants or obligations shall
         be read into this Indenture against the Trustee; and

                       (ii) in the absence of bad faith on the part of the
         Trustee, the Trustee may with respect to Securities of such series
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon any certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture; but in the case of any such certificates or opinions
         which by any provision hereof are specifically required to be furnished
         to the Trustee, the Trustee shall be under a duty to examine the same
         to determine whether or not they conform to the requirements of this
         Indenture (but need not confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein);

                  (2) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer or Responsible Officers of
         the Trustee, unless it shall be proved that the Trustee was negligent
         in ascertaining the pertinent facts;

                  (3) the Trustee shall not be liable with respect to any action
         taken or omitted to be taken by it in good faith in accordance with the
         written direction of the holders of not less than a majority in
         principal amount of the Securities of any series at the time
         outstanding relating to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee, or exercising any
         trust or power conferred upon the Trustee under this Indenture with
         respect to the Securities of that series; and

                  (4) none of the provisions contained in this Indenture shall
         require the Trustee to expend or risk its own funds or otherwise incur
         or risk personal financial liability in the performance of any of its
         duties or in the exercise of any of its rights or powers, if the
         Trustee reasonably believes that the repayment of such funds or
         liability is not reasonably assured to it under the terms of this
         Indenture or adequate indemnity against such risk is not reasonably
         assured to it.

                                       34




         SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided
in Section 7.01:

                  (a) TRUSTEE RELIANCE ON DOCUMENTS. The Trustee may
conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, demand, approval, bond, security or
other paper or document believed by it (i) to be genuine and (ii) to have been
signed or presented by the proper party or parties;

                  (b) EVIDENCE PROVIDED FOR CERTAIN INSTRUMENTS. Any request,
direction, order or demand of the Company mentioned herein shall be sufficiently
evidenced by a Board Resolution or an Officers' Certificate (unless other
evidence in respect thereof is specifically prescribed herein);

                  (c) TRUSTEE MAY CONSULT WITH COUNSEL AND ACT ON ADVICE OR
OPINION OF COUNSEL. The Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;

                  (d) TRUSTEE MAY REQUIRE INDEMNITY FROM SECURITYHOLDERS. The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Securityholders, pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing herein contained shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default with
respect to a series of the Securities (which has not been cured or waived) to
exercise with respect to Securities of that series such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs;

                  (e) TRUSTEE NOT LIABLE FOR ACTIONS IN GOOD FAITH BELIEVED TO
BE AUTHORIZED. The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;

                  (f) TRUSTEE NOT BOUND TO INVESTIGATE FACTS OR MATTERS. The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, direction, order, demand, approval, bond, security, or
other papers or documents, unless requested in writing so to do by the holders
of not less than a majority in principal amount of the outstanding Securities of
the particular series affected thereby (determined as provided in Section 8.04);
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by

                                       35



the Company or, if paid by the Trustee, shall be repaid by the Company upon
demand. Notwithstanding the foregoing, the Trustee, in its direction, may make
such further inquiry or investigation into such facts or matters as it may see
fit. In making any investigation required or authorized by this subparagraph,
the Trustee shall be entitled to examine books, records and premises of the
Company, personally or by agent or attorney at the expense of the Company and
shall incur no liability of any kind by reason of such inquiry or investigation;

                  (g) TRUSTEE MAY PERFORM DUTIES DIRECTLY OR THROUGH AGENTS OR
ATTORNEYS. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;

                  (h) PERMISSIVE RIGHTS OF TRUSTEE. The permissive right of the
Trustee to do things enumerated in this Indenture shall not be construed as a
duty.

         SECTION 7.03. LIMITATIONS IN LIABILITY OF TRUSTEE.

                  (a) TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN
SECURITIES. The recitals contained herein and in the Securities (other than the
Certificate of Authentication on the Securities) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same.

                  (b) NO REPRESENTATIONS BY TRUSTEE AS TO VALIDITY OR INDENTURE
OR OF SECURITIES. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.

                  (c) TRUSTEE NOT ACCOUNTABLE FOR USE OF SECURITIES OR PROCEEDS.
The Trustee shall not be accountable for the use or application by the Company
of any of the Securities or of the proceeds of such Securities, or for the use
or application of any monies paid over by the Trustee in accordance with any
provision of this Indenture or established pursuant to Section 2.01, or for the
use or application of any monies received by any paying agent other than the
Trustee.

         SECTION 7.04. TRUSTEE, PAYING AGENT OR SECURITY REGISTRAR MAY OWN
SECURITIES. The Trustee or any paying agent or Security Registrar, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not Trustee, paying agent or
Security Registrar.

         SECTION 7.05. MONIES RECEIVED BY TRUSTEE TO BE HELD IN TRUST WITHOUT
INTEREST. Subject to the provisions of Section 11.04, all monies received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any monies received by it hereunder except such as it
may agree in writing with the Company to pay thereon.

         SECTION 7.06. COMPENSATION AND REIMBURSEMENT OF TRUSTEE.

                                       36



                  (a) TRUSTEE ENTITLED TO COMPENSATION, REIMBURSEMENT AND
INDEMNITY. The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the reasonable expenses and disbursements of its counsel and agents and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as shall be determined to have been caused by its own negligence,
willful misconduct or bad faith. The Company also covenants to indemnify the
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any loss, liability or expense incurred without negligence,
willful misconduct or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder.

                  (b) OBLIGATIONS TO TRUSTEE TO BE SECURED BY LIEN PRIOR TO
SECURITIES. The obligations of the Company under this Section to compensate and
indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular
Securities.

                  (c) NATURE OF EXPENSES. Without prejudice to any other rights
available to the Trustee under applicable law, when the Trustee incurs expenses
or renders services in connection with an Event of Default, the expenses
(including reasonable charges and expenses of its counsel) and compensation for
its services are intended to constitute expenses of administration under
applicable federal or state bankruptcy, insolvency or similar law.

                  (d) SURVIVAL OF OBLIGATIONS. The provisions of this Section
7.06 shall survive the satisfaction and discharge of this Indenture or the
appointment of a successor trustee.

         SECTION 7.07. TRUSTEE MAY RELY ON CERTIFICATE OF OFFICERS OF COMPANY.
Except as otherwise provided in Section 7.01, whenever in the administration of
the provisions of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of bad
faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee and such
certificate, in the absence of bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted to be
taken by it under the provisions of this Indenture upon the faith thereof.

         SECTION 7.08. TRUSTEE MUST ELIMINATE CONFLICT OR RESIGN. If the Trustee
has acquired or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee

                                       37



shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.

         SECTION 7.09. REQUIREMENTS FOR ELIGIBILITY OF TRUSTEE. There shall at
all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or other person permitted to act as
trustee by the Commission, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
dollars, and subject to supervision or examination by Federal, State,
Territorial, or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Company may not, nor may any person
directly or indirectly controlling, controlled by, or under common control with
the Company, serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 7.10.

         SECTION 7.10. TRUSTEE.

                  (a) RESIGNATION OF TRUSTEE AND APPOINTMENT OF SUCCESSOR. The
Trustee or any successor hereafter appointed, may at any time resign with
respect to the Securities of one or more series by giving written notice thereof
to the Company and by transmitting notice of resignation by mail, first class
postage prepaid, to the Securityholders of such series, as their names and
addresses appear upon the Security Register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee with respect
to Securities of such series by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be delivered
to the resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning Trustee may
petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor trustee with respect to Securities of such
series, or any Securityholder of that series who has been a bona fide holder of
a Security or Securities for at least six months may, subject to the provisions
of Section 6.08, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.

                  (b) REMOVAL OF TRUSTEE BY COMPANY OR BY COURT ON
SECURITYHOLDERS' APPLICATION. In case at any time any of the following shall
occur:

                  (1) the Trustee shall fail to comply with the provisions of
         Section 7.08 after written request therefor by the Company or by any
         Securityholder who has been a bona fide holder of a Security or
         Securities for at least six months; or


                                       38



                  (2) The Trustee shall cease to be eligible in accordance with
         the provisions of Section 7.09 and shall fail to resign after written
         request therefor by the Company or by any such Securityholder; or

                  (3) the Trustee shall become incapable of acting, or shall be
         adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
         its property shall be appointed, or any public officer shall take
         charge or control of the Trustee or of its property or affairs for the
         purpose of rehabilitation, conservation or liquidation;

then, in any such case, the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor trustee,
or, subject to the provisions of Section 6.08, unless, with respect to
subsection (b)(1) above, the Trustee's duty to resign is stayed as provided in
Section 310(b) of the Trust Indenture Act, any Securityholder who has been a
bona fide holder of a Security or Securities for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a successor trustee.

                  (c) REMOVAL OF TRUSTEE BY HOLDERS OF MAJORITY IN PRINCIPAL
AMOUNT OF SECURITIES. The holders of a majority in aggregate principal amount of
the Securities of any series at the time outstanding may at any time remove the
Trustee with respect to such series and appoint a successor trustee.

                  (d) TIME WHEN RESIGNATION OR REMOVAL OF TRUSTEE EFFECTIVE. Any
resignation or removal of the Trustee and appointment of a successor trustee
with respect to the Securities of a series pursuant to any of the provisions of
this Section shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.

                  (e) ONE TRUSTEE FOR EACH SERIES. Any successor trustee
appointed pursuant to this Section may be appointed with respect to the
Securities of one or more series or all of such series, and at any time there
shall be only one Trustee with respect to the Securities of any particular
series.

                  (f) REMOVAL OF TRUSTEE BY THE COMPANY. So long as no Event of
Default has occurred and is continuing with respect to the Securities of a
series, the Company may at any time remove the Trustee with respect to such
series and appoint a successor trustee.

         SECTION 7.11. SUCCESSOR TRUSTEE.

                  (a) ACCEPTANCE BY SUCCESSOR TRUSTEE. In case of the
appointment hereunder of a successor trustee with respect to all Securities,
every such successor trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor trustee, such retiring Trustee shall, upon payment of

                                       39



its charges, execute and deliver an instrument transferring to such successor
trustee all the rights, powers, and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor trustee all property and
money held by such retiring Trustee hereunder, subject to any prior lien
provided for in Section 7.06(b).

                  (b) TRUSTEE WITH RESPECT TO LESS THAN ALL SERIES. In case of
the appointment hereunder of a successor trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each
successor trustee with respect to the Securities of one or more series shall
execute and deliver an indenture supplemental hereto wherein each successor
trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor trustee relates, (2) shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust, that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee and that no Trustee shall be responsible for any act or failure to
act on the part of any other Trustee hereunder; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein, such
retiring Trustee shall with respect to the Securities of that or those series to
which the appointment of such successor trustee relates have no further
responsibility for the exercise of rights and powers or for the performance of
the duties and obligations vested in the Trustee under this Indenture, and each
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor trustee relates; but, on request of the Company or
any successor trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor trustee relates.

                  (c) COMPANY TO CONFIRM TRUSTEE'S RIGHTS. Upon request of any
such successor trustee, the Company shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.

                  (d) SUCCESSOR TRUSTEE TO BE QUALIFIED. No successor trustee
shall accept its appointment unless at the time of such acceptance such
successor trustee shall be qualified under the Trust Indenture Act and eligible
under this Article.

                  (e) NOTICE OF SUCCESSION. Upon acceptance of appointment by a
successor trustee as provided in this Section, the Company shall transmit notice
of the succession of such

                                       40



trustee hereunder by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.

         SECTION 7.12. SUCCESSOR TO TRUSTEE BY MERGER, CONSOLIDATION OF
SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be qualified under the provisions of
the Trust Indenture Act and eligible under the provisions of Section 7.09,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. In
case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.

         SECTION 7.13. LIMITATIONS ON RIGHTS OF TRUSTEE AS A CREDITOR TO OBTAIN
PAYMENT OF CERTAIN CLAIMS. If and when the Trustee shall become a creditor of
the Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding collection of
claims against the Company (or any other obligor upon the Securities).

                                  ARTICLE VIII
                         CONCERNING THE SECURITYHOLDERS

         SECTION 8.01. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in this
Indenture it is provided that the holders of a majority or specified percentage
in aggregate principal amount of the Securities of a particular series may take
any action (including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the fact that at
the time of taking any such action the holders of such majority or specified
percentage of that series have joined therein may be evidenced by any instrument
or any number of instruments of similar tenor executed by such holders of
Securities of that series in person or by agent or proxy appointed in writing.

         If the Company shall solicit from the Securityholders of any series any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite proportion
of outstanding Securities of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the

                                       41



outstanding Securities of that series shall be computed as of the record date;
provided that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.

         In determining whether the holders of the requisite aggregate principal
amount of Securities of a particular series have concurred in any direction,
consent or waiver under this Indenture, the principal amount of an Original
Issue Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as of
the date of such determination upon a declaration of acceleration of the
maturity thereof pursuant to Section 6.01.

         SECTION 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to the provisions of Section 7.01, proof of the execution of
any instrument by a Securityholder (such proof will not require notarization) or
his agent or proxy and proof of the holding by any person of any of the
Securities shall be sufficient if made in the following manner:

                  (a) The fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable to the Trustee.

                  (b) The ownership of Securities shall be proved by the
Security Register of such Securities or by a certificate of the Security
Registrar thereof.

                  (c) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.

         SECTION 8.03. WHO MAY BE DEEMED OWNERS OF SECURITIES. Prior to the due
presentment for registration of transfer of any Security, the Company, the
Trustee, any paying agent and any Security Registrar may deem and treat the
person in whose name such Security shall be registered upon the books of the
Company as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notice of ownership or writing thereon
made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of and premium, if any, and (subject
to Section 2.03) interest on such Security 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.

         SECTION 8.04. SECURITIES OWNED BY COMPANY OR AFFILIATED PERSONS
DISREGARDED FOR CERTAIN PURPOSES. In determining whether the holders of the
requisite aggregate principal amount of Securities of a particular series have
concurred in any direction, consent or waiver under this Indenture, Securities
of that series which are owned by the Company or any other obligor on the
Securities of that series or by any person directly or indirectly controlling or
controlled by or under common control with the Company or any other obligor on
the Securities of that series shall be disregarded and deemed not to be
outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities of such series which the
Trustee actually knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as outstanding for the
purposes of this Section, if the

                                       42



pledgee shall establish to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not a person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.

         SECTION 8.05. INSTRUMENTS EXECUTED BY SECURITYHOLDERS BINDING ON FUTURE
HOLDERS. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Securities of a
particular series specified in this Indenture in connection with such action,
any holder of a Security of that series which is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 8.02, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Securities of a particular series specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Securities of that series.

                                   ARTICLE IX.
                             SUPPLEMENTAL INDENTURES

         SECTION 9.01. SUPPLEMENTAL INDENTURE WITHOUT CONSENT OF
SECURITYHOLDERS. In addition to any supplemental indenture otherwise authorized
by this Indenture, the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect), without the consent of the
Securityholders, for one or more of the following purposes:

                  (a) to evidence the succession of another person to the
Company or a successor to the Company, and the assumption by any such successor
of the covenants of the Company contained herein or otherwise established with
respect to the Securities; or

                  (b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of the
holders of the Securities of all or any series, and to make the occurrence, or
the occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions a default or an Event of
Default with respect to such series permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction, condition
or provision such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default or may limit the

                                       43



right of the holders of a majority in aggregate principal amount of the
Securities of such series to waive such default; or

                  (c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not be inconsistent with the
provisions of this Indenture and shall not adversely affect the rights of the
holders of the Securities of any series which are outstanding in any material
respect; or

                  (d) to change or eliminate any of the provisions of this
Indenture or to add any new provision to this Indenture; provided, however, that
such change, elimination or addition shall become effective only as to
Securities issued pursuant to or subsequent to such supplemental indenture
except to the extent such change, elimination or addition does not adversely
affect the rights of any Securityholder of Outstanding Securities in any
material respect; or

                  (e) to establish the form or terms of Securities of any series
as permitted by Section 2.01; or

                  (f) to add any additional Events of Default with respect to
all or any series of outstanding Securities; or

                  (g) to add guarantees with respect to debt securities or to
release a guarantor from guarantees in accordance with the terms of the
applicable series of Securities;

                  (h) to secure a series of Securities by conveying, assigning,
pledging or mortgaging property or assets to the Trustee as collateral security
for such series of Securities; or

                  (i) to provide for uncertificated Securities in addition to or
in place of certificated Securities; or

                  (j) to provide for the authentication and delivery of bearer
securities and coupons appertaining thereto representing interest, if any,
thereon and for the procedures for the registration, exchange and replacement
thereof and for the giving of notice to, and the solicitation of the vote or
consent of, the holders thereof, and for any other matters incidental thereto;
or

                  (k) evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements
of Article Seven; or

                  (l) to change any place or places where (1) the principal of
and premium, if any, and interest, if any, on all or any series of Securities
shall be payable, (2) all or any series of Securities may be surrendered for
registration of transfer, (3) all or any series of Securities may be surrendered
for exchange and (4) notices and demands to or upon the Company in respect of

                                       44



all or any series of Securities and this Indenture may be served; provided,
however, that any such place shall be located in New York, New York or be the
principal office of the Company; or

                  (m) to provide for the payment by the Company of additional
amounts in respect of certain taxes imposed on certain holders and for the
treatment of such additional amounts as interest and for all matters incidental
thereto; or

                  (n) to provide for the issuance of Securities denominated in a
currency other than Dollars or in a composite currency and for all matters
incidental thereto; or

                  (o) to comply with any requirements of the Commission or the
Trust Indenture Act of 1939, as amended.

         Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the execution and delivery of this
Indenture or at any time thereafter shall be amended and

         (x) if any such amendment shall require one or more changes to any
provisions hereof or the inclusion herein of any additional provisions, or shall
by operation of law be deemed to effect such changes or incorporate such
provisions by reference or otherwise, this Indenture shall be deemed to have
been amended so as to conform to such amendment to the Trust Indenture Act, and
the Company and the Trustee may, without the consent of any Securityholders,
enter into a supplemental indenture hereto to effect or evidence such changes or
additional provisions; or

         (y) if any such amendment shall permit one or more changes to, or
the elimination of, any provisions hereof which, at the date of the execution
and delivery hereof or at any time thereafter, are required by the Trust
Indenture Act to be contained herein, this Indenture shall be deemed to have
been amended to effect such changes or elimination, and the Company and the
Trustee may, without the consent of any Securityholders, enter into a
supplemental indenture hereto to effect such changes or elimination; or

         (z) if, by reason of any such amendment, one or more provisions
which, at the date of the execution and delivery hereof or at any time
thereafter, are required by the Trust Indenture Act to be contained herein shall
be deemed to be incorporated herein by reference or otherwise, or otherwise made
applicable hereto, and shall no longer be required to be contained herein, the
Company and the Trustee may, without the consent of any Securityholders, enter
into a supplemental indenture hereto to effect the elimination of such
provisions.

         The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 9.02.

                                       45



         SECTION 9.02. SUPPLEMENTAL INDENTURE WITH CONSENT OF SECURITYHOLDERS.
With the consent (evidenced as provided in Section 8.01) of the holders of not
less than a majority in aggregate principal amount of the Securities of each
series affected by such supplemental indenture or indentures at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner the rights of the
holders of the Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Securities 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, or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the maturity thereof pursuant to Section
6.01, without the consent of the holders of each Security then outstanding and
affected, (ii) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture, or reduce the
percentage of Securities, the holders of which are required to waive any default
and its consequences, without the consent of the holder of each Security then
outstanding and affected thereby, or (iii) modify any provision of Section
6.01(c) (except to increase the percentage of principal amount of securities
required to rescind and annul any declaration of amounts due and payable under
the Securities) without the consent of the holders of each Security then
outstanding and affected thereby.

         Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders required
to consent thereto as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.

         A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities, or that modifies the
rights of holders of Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of the holders of Securities of any other series.

         It shall not be necessary for the consent of the Securityholders of any
series affected thereby under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.

         Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and addresses
appear upon the Security Register. Any failure of the Trustee to mail such
notice, or any defect

                                       46



therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.

         SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, this Indenture shall, with respect to such series, be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Securities of the
series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.

         SECTION 9.04. SECURITIES MAY BEAR NOTATION OF CHANGES BY SUPPLEMENTAL
INDENTURES. Securities of any series, affected by a supplemental indenture,
authenticated and delivered after the execution of such supplemental indenture
pursuant to the provisions of this Article, Article Two or Article Seven or of
Section 10.01, may bear a notation in form approved by the Company, provided
such form meets the requirements of any exchange upon which such series may be
listed, as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of that series so modified as to
conform, in the opinion of the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of that series then outstanding.

         SECTION 9.05. OPINION OF COUNSEL. The Trustee, subject to the
provisions of Section 7.01, shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Trustee under the provisions of this Article to join in the execution
thereof.

                                   ARTICLE X.
                         CONSOLIDATION, MERGER AND SALE

         SECTION 10.01. CONSOLIDATIONS OR MERGERS OF COMPANY AND SALES OR
CONVEYANCES OF PROPERTY OF COMPANY. Nothing contained in this Indenture or in
any of the Securities shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or not affiliated
with the Company), or successive consolidations or mergers in which the Company
or its successor or successors shall be a party or parties, or shall prevent any
sale, conveyance, transfer or other disposition of all or substantially all of
the property of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Company or its successor or successors) authorized to
acquire and operate the same; provided, however, the Company hereby covenants
and agrees that, upon any such consolidation, merger, sale, conveyance, transfer
or other disposition, the due and punctual payment of the principal of (premium,
if any) and interest on all of the Securities of all series in accordance with
the terms of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
with respect to each series or established with respect to such series pursuant
to

                                       47


Section 2.01 to be kept or performed by the Company, shall be expressly assumed,
by supplemental indenture (which shall conform to the provisions of the Trust
Indenture Act as then in effect) satisfactory in form to the Trustee executed
and delivered to the Trustee by the entity formed by such consolidation, or into
which the Company shall have been merged, or by the entity which shall have
acquired such property.

         SECTION 10.02. SUCCESSOR TO COMPANY.

                  (a) RIGHTS AND DUTIES OF SUCCESSOR COMPANY. In case of any
such consolidation, merger, sale, conveyance, transfer or other disposition and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the due and punctual payment of the principal of and premium, if any, and
interest on all of the Securities of all series outstanding and the due and
punctual performance of all of the covenants and conditions of this Indenture or
established with respect to each series of the Securities pursuant to Section
2.01 to be kept or performed by the Company with respect to each series, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein as the party of the first part,
and thereupon (provided, that in the case of a lease, the term of the lease is
at least as long as the longest maturity of any Securities outstanding at such
time) the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company or any other predecessor obligor on the Securities, any or
all of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor company, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the predecessor Company to the Trustee
for authentication, and any Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.

                  (b) APPROPRIATE CHANGES MAY BE MADE IN PHRASEOLOGY AND FORM OF
SECURITIES. In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued as may be
appropriate.

                  (c) COMPANY MAY CONSOLIDATE OR MERGE INTO ITSELF OR ACQUIRE
PROPERTIES OF OTHER CORPORATIONS. Nothing contained in this Indenture or in any
of the Securities shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the property of any other
corporation (whether or not affiliated with the Company).

         SECTION 10.03. OPINION OF COUNSEL. The Trustee, subject to the
provisions of Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Article.

                                       48



                                  ARTICLE XI.
                    DEFEASANCE AND CONDITIONS TO DEFEASANCE;
                                UNCLAIMED MONIES

         SECTION 11.01. DEFEASANCE AND CONDITIONS TO DEFEASANCE.

                  (a) SECURITIES MAY BE DEFEASED. Securities of a series may be
defeased in accordance with their terms and, unless the Company Order or
supplemental indenture establishing the series otherwise provides, in accordance
with this Article.

                  (b) COVENANT AND LEGAL DEFEASANCE. The Company at any time may
terminate as to a series its obligations, if any, under any restrictive
covenants which may be applicable to a particular series, to the extent provided
for in a Company order or supplemental indenture relating to such series
("covenant defeasance"). The Company at any time may terminate as to a series
all of its obligations for such series under this Indenture ("legal
defeasance"), except that the Company's obligations in Sections 2.05, 2.07,
4.02, 7.06, 7.10 and 11.04 shall survive until the Securities of the series are
no longer outstanding and, thereafter, the Company's obligations in Sections
7.06, 7.10 and 11.04 shall survive. The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.

                  (c) CONDITIONS FOR DEFEASANCE. The Company shall exercise as
to a series its legal defeasance option or its covenant defeasance option if:

                  (1) The Company irrevocably deposits in trust with the Trustee
         or another trustee (x) money in an amount which shall be sufficient; or
         (y) Eligible Obligations the principal of and the interest on which
         when due, without regard to reinvestment thereof, will provide moneys,
         which, together with the money, if any, deposited or held by the
         Trustee or such other trustee, shall be sufficient; or (z) a
         combination of money and Eligible Obligations which shall be
         sufficient, to pay the principal of and premium, if any, and interest,
         if any, due and to become due on such Securities on or prior to
         maturity;

                  (2) the Company delivers to the Trustee a Certificate to the
         effect that the requirements set forth in clause (1) above have been
         satisfied;

                  (3) immediately after the deposit no Default exists; and

                  (4) the Company delivers to the Trustee an Opinion of Counsel
         to the effect that holders of the series will not recognize income,
         gain or loss for Federal income tax purposes as a result of the
         defeasance but will realize income, gain or loss on the Securities,
         including payments of interest thereon, in the same amounts and in the
         same manner and at the same time as would have been the case if such
         defeasance had not occurred and which, in the case of legal defeasance,
         shall be (x) accompanied by a ruling of the Internal Revenue Service
         issued to the Company or (y) based on a change in law or regulation
         occurring after the date hereof; and

                                       49



                  (5) the deposit specified in paragraph (1) above shall not
         result in the Company, the Trustee or the trust created in connection
         with such defeasance being deemed an "investment company" under the
         Investment Company Act of 1940, as amended.

                  (d) EVENT OF DEFAULT FOLLOWING COVENANT DEFEASANCE. In the
event (i) the Company exercises its option to effect a covenant defeasance with
respect to the Securities of any series, (ii) the Securities of that series are
thereafter declared due and payable pursuant to Section 6.01(b) hereof because
of the occurrence of any Event of Default that results from an event, act or
condition which does not arise from any covenant that has been defeased, and
(iii) the amount of money and securities on deposit with the Trustee are not
sufficient to pay amounts due on the Securities of that series at the time of
the acceleration resulting from such Event of Default, the Company shall be
liable for any such deficiency.

                  (e) EFFECT OF DEFEASANCE. Upon the satisfaction of each of the
foregoing conditions, the obligations of the Company under the restrictive
covenants defeased (in the case of covenant defeasance), and all obligations of
the Company except as set forth in paragraph (b) of this Section 11.01 (in the
case of legal defeasance), shall be terminated with respect to such series.

         SECTION 11.02. APPLICATION BY TRUSTEE OF FUNDS DEPOSITED FOR PAYMENT OF
SECURITIES. All monies or Eligible Obligations deposited with the Trustee
pursuant to Section 11.01 shall be held in trust and shall be available for
payment as due, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the particular series
of Securities for the payment or redemption of which such monies or Eligible
Obligations have been deposited with the Trustee.

         SECTION 11.03. REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture all monies or Eligible
Obligations then held by any paying agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee and thereupon such
paying agent shall be released from all further liability with respect to such
monies or Eligible Obligations.

         SECTION 11.04. REPAYMENT OF MONIES HELD BY TRUSTEE. Any monies or
Eligible Obligations deposited with any paying agent or the Trustee, or then
held by the Company, in trust for payment of principal of or premium or interest
on the Securities of a particular series that are not applied but remain
unclaimed by the holders of such Securities for at least two years after the
date upon which the principal of (and premium, if any) or interest on such
Securities shall have respectively become due and payable, upon the written
request of the Company and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, shall be repaid to
the Company on May 31 of each year or (if then held by the Company) shall be
discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such monies or Eligible
Obligations, and the holder of any of the Securities entitled to receive such
payment shall thereafter, as an unsecured general creditor, look only to the
Company for the payment thereof.

                                       50



         SECTION 11.05. DELIVERY OF OFFICER'S CERTIFICATE AND OPINION OF
COUNSEL. In connection with any satisfaction and discharge of this Indenture
pursuant to this Article Eleven, the Company shall deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that all
conditions precedent in this Indenture provided for relating to such
satisfaction and discharge have been complied with.

                                  ARTICLE XII.
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

         SECTION 12.01. INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
COMPANY EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Security, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, past, present or future as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such 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; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.

                                 ARTICLE XIII.
                            MISCELLANEOUS PROVISIONS

         SECTION 13.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Company shall bind its successors and assigns,
whether so expressed or not.

         SECTION 13.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR
COMPANY. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.

         SECTION 13.03. HEADINGS. The Article and Section Headings in this
Indenture and the Table of Contents are for convenience only and shall not
affect the construction hereof.

                                       51




         SECTION 13.04. NOTICES. Except as otherwise expressly provided herein
any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Securities
to or on the Company may be given or served by being deposited first class
postage prepaid in a post office letter box addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Telephone and
Data Systems, Inc., 30 North LaSalle Street, Suite 4000, Chicago, Illinois
60603, Attention: President, with a copy to Sidley Austin Brown & Wood, 10 South
Dearborn Street, Chicago, Illinois, 60603, Attention: William S. DeCarlo, Esq.
Any notice, election, request or demand by the Company or any Securityholder to
or upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.

         SECTION 13.05. GOVERNING LAW. This Indenture and each Security shall be
deemed to be a contract made under the laws of the State of Illinois, and for
all purposes shall be construed in accordance with the laws of said State.

         SECTION 13.06. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL.

                  (a) WHEN REQUIRED. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and, if required hereby, an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.

                  (b) STATEMENTS TO BE INCLUDED IN EACH CERTIFICATE OR OPINION.
Each certificate or opinion provided for in this Indenture and delivered to the
Trustee with respect to compliance with a condition or covenant in this
Indenture (other than the certificate provided pursuant to Section 5.03(d) of
this Indenture) shall include (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.

         SECTION 13.07. PAYMENTS DUE ON NON-BUSINESS DAYS. Except as provided
pursuant to Section 2.01 pursuant to a Company Order, or established in one or
more indentures supplemental to this Indenture, in any case where the date of
maturity of principal or an Interest Payment Date of any Security or the date of
redemption, purchase or repayment of any Security shall not be a Business Day
then payment of interest or principal (and premium, if any) may be made on the
next succeeding Business Day with the same force and effect as if made on the

                                       52



nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.

         SECTION 13.08. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939. If
and to the extent that any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by the Trust Indenture Act, such imposed
duties shall control.

         SECTION 13.09. EXECUTION IN COUNTERPARTS. This 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.

         SECTION 13.10. SEPARABILITY OF INDENTURE PROVISIONS. In case any one
or more of the provisions contained in this Indenture or in the Securities of
any series 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 Indenture or of such Securities, but this Indenture
and such Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.

         SECTION 13.11. SUCCESSORS AND ASSIGNS. The Company will have the right
at all times to assign any of its rights or obligations under the Indenture to a
direct or indirect wholly owned subsidiary of the Company; provided that, in the
event of any such assignment, the Company will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and inures
to the benefit of the parties thereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.

         SECTION 13.12. SECURITIES IN FOREIGN CURRENCIES. Whenever this
Indenture provides for any action by, or the determination of any rights of,
holders of Securities of any series in which not all of such Securities are
denominated in the same currency, in the absence of any provision to the
contrary in the form of Security of any particular series, any amount in respect
of any Security denominated in a currency other than Dollars shall be treated
for any such action or determination of rights as that amount of Dollars that
could be obtained for such amount on such reasonable basis of exchange and as of
the record date with respect to Securities of such series (if any) for such
action or determination of rights (or, if there shall be no applicable record
date, such other date reasonably proximate to the date of such action or
determination of rights) as the Company may specify in a written notice to the
Trustee or, in the absence of such written notice, as the Trustee may determine.

         BNY Midwest Trust Company, as Trustee, hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions hereinabove
set forth.


                                       53




         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.


                       TELEPHONE AND DATA SYSTEMS, INC.

                       By:  _____________________________________________
                            Name:  LeRoy T. Carlson, Jr.
                            Title: President and Chief Executive Officer


                       By:  ______________________________________________
                            Name:  Sandra L. Helton
                            Title: Executive Vice President and
                                   Chief Financial Officer


                       BNY MIDWEST TRUST COMPANY, as Trustee


                       By:  _______________________________________________
                            Name:
                            Title:


                                       54

EX-5

                                                                       EXHIBIT 5

                       [SIDLEY AUSTIN BROWN & WOOD LETTERHEAD]



                                October 16, 2001


Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602

       Re:   $1,000,000,000 in Debt Securities of Telephone and
             Data Systems, Inc.
             --------------------------------------------------
Ladies and Gentlemen:

     We are counsel to Telephone and Data Systems, Inc., a Delaware corporation
(the "Company"), and have represented the Company with respect to the
Registration Statement on Form S-3 (the "Registration Statement") being filed by
the Company with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
registration of $1,000,000,000 in debt securities of the Company to be issued
under an Indenture (the "Indenture") to be entered between the Company and BNY
Midwest Trust Company (the "Debt Securities").

     In rendering this opinion letter, we have examined and relied upon a copy
of the Registration Statement. We have also examined originals, or copies of
originals certified to our satisfaction, of such agreements, documents,
certificates and other statements of governmental officials and other
instruments, and have examined such questions of law and have satisfied
ourselves as to such matters of fact, as we have considered relevant and
necessary as a basis for this opinion.

     Based on the foregoing, it is our opinion that:

     1. The Company is duly incorporated and validly existing under the laws of
        the State of Delaware.

     2. The Company has the corporate power and authority to execute and deliver
        the Indenture and to authorize and sell the Debt Securities.




SIDLEY AUSTIN BROWN & WOOD                                           CHICAGO

Telephone and Data Systems, Inc.
October 16, 2001
Page 2

     3. Each series of Debt Securities will be legally issued and binding
        obligations of the Company (except to the extent enforceability may be
        limited by applicable bankruptcy, insolvency, reorganization,
        moratorium, fraudulent transfer or other similar laws affecting the
        enforcement of creditors' rights generally and by the effect of general
        principles of equity, regardless of whether enforceability is considered
        in a proceeding in equity or at law) when (i) the Registration
        Statement, as finally amended (including any necessary post-effective
        amendments), shall have become effective under the Securities Act, (ii)
        the Indenture (including any necessary supplemental indenture) shall
        have been duly executed and delivered by the Company and the Trustee;
        (iii) the Indenture shall have been duly qualified under the Trust
        Indenture Act of 1939, as amended; (iv) the Company's Board of Directors
        or a duly authorized committee thereof shall have duly adopted final
        resolutions authorizing the issuance and sale of such series of Debt
        Securities under the Indenture as contemplated by the Registration
        Statement; (v) a Prospectus Supplement with the respect to such series
        of Debt Securities shall have been filed with the Commission pursuant to
        Rule 424 under the Securities Act; and (vi) such series of Debt
        Securities shall have been duly executed and authenticated as provided
        in the Indenture and such resolutions and shall have been duly delivered
        to the purchasers thereof against payment of the agreed consideration
        therefor.

     For the purposes of this opinion letter, we have assumed that, at the time
of the issuance, sale and delivery of each series of Debt Securities, the
authorization thereof by the Company will not have been modified or rescinded,
and there will not have occurred any change in law affecting the validity,
legally binding character or enforceability thereof; and the Indenture will not
have been modified or amended.

     We do not find it necessary for the purposes of this opinion letter to
cover, and accordingly we express no opinion as to, the application of the
securities or blue sky laws of the various states or the District of Columbia to
the sale of the Debt Securities.

     This opinion letter is limited to the General Corporation Law of the State
of Delaware, the laws of the State of Illinois and the federal laws of the
United States of America (excluding the Federal Communications Act, as amended,
and any rules and regulations in effective thereunder) to the extent applicable.

     Walter C.D. Carlson, a director of the Company and of a subsidiary of the
Company, Michael G. Hron, the General Counsel and an Assistant Secretary of the
Company and a subsidiary of the Company and an Assistant Secretary of certain
subsidiaries of the Company, William S. DeCarlo, the Assistant General Counsel
and an Assistant Secretary of the Company and an Assistant Secretary of certain
subsidiaries


                                        2


SIDLEY AUSTIN BROWN & WOOD                                           CHICAGO

Telephone and Data Systems, Inc.
October 16, 2001
Page 3


of the Company, and Stephen P. Fitzell, the Assistant General Counsel and an
Assistant Secretary of certain subsidiaries of the Company, are members of that
law firm. Walter C.D. Carlson is also a trustee of a voting trust which controls
the Company.

     We hereby consent to the filing of this opinion letter as an Exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement.



                                         Very truly yours,


                                         /s/ Sidley Austin Brown & Wood



                                       3

EX-12

                                                                      EXHIBIT 12

                        TELEPHONE AND DATA SYSTEMS, INC.
                       RATIOS OF EARNINGS TO FIXED CHARGES
              For the Six Months Ended December 31, 1996 - Restated
                             (Dollars In Thousands)


                                                                           
EARNINGS:
  Income from Continuing Operations before income taxes                           $ 293,408
  Add (Deduct):
    Earnings on Equity Method                                                       (53,881)
    Distributions from Minority Subsidiaries                                         25,453
    Amortization of Non-Telephone Capitalized Interest                                    3
    Minority interest in pre-tax income of subsidiaries
      that do not have fixed charges                                                (11,357)
                                                                              -----------------
                                                                                    253,626

    Add fixed charges:
      Consolidated interest expense                                                  65,343
      Interest Portion (1/3) of Consolidated Rent Expense                             8,015
                                                                              -----------------
                                                                                  $ 326,984
                                                                              =================

FIXED CHARGES:
    Consolidated interest expense                                                 $  65,343
    Capitalized interest                                                              3,722
    Interest Portion (1/3) of Consolidated Rent Expense                               8,015
                                                                              -----------------
                                                                                  $  77,080
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES                                                     4.24
                                                                              =================

    Tax-Effected Redeemable Preferred Dividends                                   $     246
    Fixed Charges                                                                    77,080
                                                                              -----------------
    Fixed Charges and Redeemable Preferred Dividends                              $  77,326
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND REDEEMABLE PREFERRED DIVIDENDS                                                   4.23
                                                                              =================

    Tax-Effected Preferred Dividends                                              $   3,558
    Fixed Charges                                                                    77,080
                                                                              -----------------
    Fixed Charges and Preferred Dividends                                         $  80,638
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND PREFERRED DIVIDENDS                                                              4.05
                                                                              =================





                        TELEPHONE AND DATA SYSTEMS, INC.
                       RATIOS OF EARNINGS TO FIXED CHARGES
                 For the Year ended December 31, 1997 - Restated
                             (Dollars In Thousands)


                                                                            
EARNINGS:
  Income from Continuing Operations before income taxes                             $ 221,872
  Add (Deduct):
    Earnings on Equity Method                                                         (76,811)
    Distributions from Minority Subsidiaries                                           56,413
    Amortization of Non-Telephone Capitalized Interest                                      3
    Minority interest in pre-tax income of subsidiaries
      that do not have fixed charges                                                  (12,669)
                                                                              -----------------
                                                                                      188,808

    Add fixed charges:
      Consolidated interest expense                                                    93,533
      Interest Portion (1/3) of Consolidated Rent Expense                              11,039
                                                                              -----------------
                                                                                    $ 293,380
                                                                              =================

FIXED CHARGES:
    Consolidated interest expense                                                   $  93,533
    Interest Portion (1/3) of Consolidated Rent Expense                                11,039
                                                                              -----------------
                                                                                    $ 104,572
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES                                                       2.81
                                                                              =================

    Tax-Effected Redeemable Preferred Dividends                                     $     191
    Fixed Charges                                                                     104,572
                                                                              -----------------
    Fixed Charges and Redeemable Preferred Dividends                                $ 104,763
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND REDEEMABLE PREFERRED DIVIDENDS                                                     2.80
                                                                              =================

    Tax-Effected Preferred Dividends                                                $   3,330
    Fixed Charges                                                                     104,572
                                                                              -----------------
    Fixed Charges and Preferred Dividends                                           $ 107,902
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND PREFERRED DIVIDENDS                                                                2.72
                                                                              =================





                        TELEPHONE AND DATA SYSTEMS, INC.
                       RATIOS OF EARNINGS TO FIXED CHARGES
                 For the Year ended December 31, 1998 - Restated
                             (Dollars In Thousands)


                                                                            
EARNINGS:
  Income from Continuing Operations before income taxes                              $ 393,918
  Add (Deduct):
    Earnings on Equity Method                                                          (29,379)
    Distributions from Minority Subsidiaries                                            28,912
    Amortization of Non-Telephone Capitalized Interest                                       3
    Minority interest in pre-tax income of subsidiaries
      that do not have fixed charges                                                    (6,413)
                                                                              --------------------
                                                                                       387,041

    Add fixed charges:
      Consolidated interest expense                                                    131,875
      Interest Portion (1/3) of Consolidated Rent Expense                               13,111
                                                                              --------------------
                                                                                     $ 532,027
                                                                              ====================

FIXED CHARGES:
    Consolidated interest expense                                                    $ 131,875
    Interest Portion (1/3) of Consolidated Rent Expense                                 13,111
                                                                              --------------------
                                                                                     $ 144,986
                                                                              ====================

RATIO OF EARNINGS TO FIXED CHARGES                                                        3.67
                                                                              ====================

    Tax-Effected Redeemable Preferred Dividends                                      $     143
    Fixed Charges                                                                      144,986
                                                                              --------------------
    Fixed Charges and Redeemable Preferred Dividends                                 $ 145,129
                                                                              ====================

RATIO OF EARNINGS TO FIXED CHARGES
  AND REDEEMABLE PREFERRED DIVIDENDS                                                      3.67
                                                                              ====================

    Tax-Effected Preferred Dividends                                                 $   2,795
    Fixed Charges                                                                      144,986
                                                                              --------------------
    Fixed Charges and Preferred Dividends                                            $ 147,781
                                                                              ====================

RATIO OF EARNINGS TO FIXED CHARGES
  AND PREFERRED DIVIDENDS                                                                3.60
                                                                              ====================





                        TELEPHONE AND DATA SYSTEMS, INC.
                       RATIOS OF EARNINGS TO FIXED CHARGES
                 For the Year ended December 31, 1999 - Restated
                             (Dollars In Thousands)

                                                                            
EARNINGS:
  Income from Continuing Operations before income taxes                              $ 607,444
  Add (Deduct):
    Earnings on Equity Method                                                          (18,397)
    Distributions from Minority Subsidiaries                                            26,061
    Amortization of Non-Telephone Capitalized Interest                                       3
    Minority interest in pre-tax income of subsidiaries
      that do not have fixed charges                                                    (7,034)
                                                                              -----------------
                                                                                       608,077

    Add fixed charges:
      Consolidated interest expense                                                    124,794
      Interest Portion (1/3) of Consolidated Rent Expense                               15,275
                                                                              -----------------
                                                                                     $ 748,146
                                                                              =================

FIXED CHARGES:
    Consolidated interest expense                                                    $ 124,794
    Interest Portion (1/3) of Consolidated Rent Expense                                 15,275
                                                                              -----------------
                                                                                     $ 140,069
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES                                                        5.34
                                                                              =================

    Tax-Effected Redeemable Preferred Dividends                                      $     113
    Fixed Charges                                                                      140,069
                                                                              -----------------
    Fixed Charges and Redeemable Preferred Dividends                                 $ 140,182
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND REDEEMABLE PREFERRED DIVIDENDS                                                      5.34
                                                                              =================

    Tax-Effected Preferred Dividends                                                  $  1,954
    Fixed Charges                                                                      140,069
                                                                              -----------------
    Fixed Charges and Preferred Dividends                                             $142,023
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND PREFERRED DIVIDENDS                                                                 5.27
                                                                              =================





                        TELEPHONE AND DATA SYSTEMS, INC.
                       RATIOS OF EARNINGS TO FIXED CHARGES
                 For the Year ended December 31, 2000 - Restated
                             (Dollars In Thousands)

                                                                            
EARNINGS:
  Income from Continuing Operations before income taxes                              $ 346,433
  Add (Deduct):
    Earnings on Equity Method                                                          (28,465)
    Distributions from Minority Subsidiaries                                            34,834
    Amortization of Non-Telephone Capitalized Interest                                       1
    Minority interest in pre-tax income of subsidiaries
      that do not have fixed charges                                                    (7,408)
                                                                              -----------------
                                                                                       345,395

    Add fixed charges:
      Consolidated interest expense                                                    125,369
      Interest Portion (1/3) of Consolidated Rent Expense                               17,790
                                                                              -----------------
                                                                                     $ 488,554
                                                                              =================

FIXED CHARGES:
    Consolidated interest expense                                                    $ 125,369
    Interest Portion (1/3) of Consolidated Rent Expense                                 17,790
                                                                              -----------------
                                                                                     $ 143,159
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES                                                        3.41
                                                                              =================

    Tax-Effected Redeemable Preferred Dividends                                      $      72
    Fixed Charges                                                                      143,159
                                                                              -----------------
    Fixed Charges and Redeemable Preferred Dividends                                 $ 143,231
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND REDEEMABLE PREFERRED DIVIDENDS                                                      3.41
                                                                              =================

    Tax-Effected Preferred Dividends                                                 $     886
    Fixed Charges                                                                      143,159
                                                                              ------------------
    Fixed Charges and Preferred Dividends                                            $ 144,045
                                                                              ==================

RATIO OF EARNINGS TO FIXED CHARGES
  AND PREFERRED DIVIDENDS                                                                 3.39
                                                                              ==================





                        TELEPHONE AND DATA SYSTEMS, INC.
                       RATIOS OF EARNINGS TO FIXED CHARGES
                 For the Six Months ended June 30, 2001 - Restated
                             (Dollars In Thousands)



                                                                                    (Unaudited)
                                                                            
EARNINGS:
  Income from Continuing Operations before income taxes                             $ (469,842)
  Add (Deduct):
    Earnings on Equity Method                                                          (17,175)
    Distributions from Minority Subsidiaries                                             7,540
    Amortization of Non-Telephone Capitalized Interest                                       0
    Minority interest in pre-tax income of subsidiaries
      that do not have fixed charges                                                    (5,022)
                                                                              -----------------
                                                                                      (484,499)

    Add fixed charges:
      Consolidated interest expense                                                     67,633
      Interest Portion (1/3) of Consolidated Rent Expense                                8,895
                                                                              -----------------
                                                                                    $ (407,971)
                                                                              =================

FIXED CHARGES:
    Consolidated interest expense                                                   $   67,633
    Interest Portion (1/3) of Consolidated Rent Expense                                  8,895
                                                                              -----------------
                                                                                    $   76,528
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES                                                       (5.33)
                                                                              =================

    Tax-Effected Redeemable Preferred Dividends                                     $       29
    Fixed Charges                                                                       76,528
                                                                              -----------------
    Fixed Charges and Redeemable Preferred Dividends                                $   76,557
                                                                              =================

RATIO OF EARNINGS TO FIXED CHARGES
  AND REDEEMABLE PREFERRED DIVIDENDS                                                     (5.33)
                                                                              =================

    Tax-Effected Preferred Dividends                                                $      384
    Fixed Charges                                                                       76,528
                                                                              ------------------
    Fixed Charges and Preferred Dividends                                           $   76,912
                                                                              ==================

RATIO OF EARNINGS TO FIXED CHARGES
  AND PREFERRED DIVIDENDS                                                                (5.30)
                                                                              ==================

EX-23.1

                                                                    EXHIBIT 23.1

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-3 Registration Statement of Telephone and Data
Systems, Inc., of our reports dated January 24, 2001, included or incorporated
by reference in the Telephone and Data Systems, Inc. Form 10-K for the year
ended December 31, 2000, and to all references to our Firm included in or made
part of this Registration Statement.


                                             ARTHUR ANDERSEN LLP


Chicago, Illinois
October 12, 2001

EX-25

                                                                      EXHIBIT 25

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                             SECTION 305(b)(2) |__|
                           ---------------------------

                            BNY MIDWEST TRUST COMPANY
                 (formerly known as CTC Illinois Trust Company)
               (Exact name of trustee as specified in its charter)

Illinois                                               36-3800435
(State of incorporation                                (I.R.S. employer
if not a U.S. national bank)                           identification no.)

2 N. LaSalle Street
Suite 1020
Chicago, Illinois                                      60602
(Address of principal executive offices)               (Zip code)
                           ---------------------------

                        TELEPHONE AND DATA SYSTEMS, INC.
               (Exact name of obligor as specified in its charter)
Delaware                                               36-2669023
(State or other jurisdiction of                        (I.R.S. employer
incorporation or organization)                         identification no.)

30 North LaSalle Street
Chicago, Illinois                                      60602
(Address of principal executive offices)               (Zip code)
                           ---------------------------


                                 Debt Securities
                       (Title of the indenture securities)

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =





1.   GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:

     (A)  NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
          IT IS SUBJECT.


------------------------------------------------------------------------------------------------------------

                       Name                                                        Address
------------------------------------------------------------------------------------------------------------

                                                             
        Office of Banks & Trust Companies of the State           500 E. Monroe Street
        of Illinois                                              Springfield, Illinois 62701-1532

        Federal Reserve Bank of Chicago                          230 S. LaSalle Street
                                                                 Chicago, Illinois 60603


         (B)  WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

         Yes.

2.   AFFILIATIONS WITH OBLIGOR.

     IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
     AFFILIATION.

     None.

16.  LIST OF EXHIBITS.

     1.   A copy of Articles of Incorporation of BNY Midwest Trust Company
          (formerly CTC Illinois Trust Company, formerly Continental Trust
          Company) as now in effect. (Exhibit 1 to Form T-1 filed with the
          Registration Statement No. 333-47688.)

     2,3. A copy of the Certificate of Authority of the Trustee as now in
          effect, which contains the authority to commence business and a grant
          of powers to exercise corporate trust powers. (Exhibit 2 to Form T-1
          filed with the Registration Statement No. 333-47688.)

     4.   A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
          filed with the Registration Statement No. 333-47688.)

     6.   The consent of the Trustee required by Section 321(b) of the Act.
          (Exhibit 6 to Form T-1 filed with the Registration Statement No.
          333-47688.)

     7.   A copy of the latest report of condition of the Trustee published
          pursuant to law or to the requirements of its supervising or examining
          authority.


                                      -2-


                                    SIGNATURE


     Pursuant to the requirements of the Act, the Trustee, BNY Midwest Trust
Company, a corporation organized and existing under the laws of the State of
Illinois, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of
Chicago, and State of Illinois, on the 11th day of October, 2001.


                                             BNY Midwest Trust Company


                                       By: /s/ J. BARTOLINI
                                         ------------------------------------
                                           Name: J. BARTOLINI
                                           Title: VICE PRESIDENT




                                                           EXHIBIT 7 TO FORM T-1



                         OFFICE OF BANKS AND REAL ESTATE
                       BUREAU OF BANKS AND TRUST COMPANIES

                        CONSOLIDATED REPORT OF CONDITION
                                       OF

                            BNY MIDWEST TRUST COMPANY
                           209 WEST JACKSON BOULEVARD
                                    SUITE 700
                             CHICAGO, ILLINOIS 60606

Including the institution's domestic and foreign subsidiaries completed as of
the close of business on March 31, 2001, submitted in response to the call of
the Office of Banks and Real Estate of the State of Illinois.



                                 ASSETS                                          THOUSANDS OF DOLLARS
                                 ------                                          --------------------
                                                                             
1.  Cash and Due from Depository Institutions......................                   3,274
2.  U.S. Treasury Securities.......................................                   - 0 -
3.  Obligations of States and Political Subdivisions...............                   - 0 -
4.  Other Bonds, Notes and Debentures..............................                   - 0 -
5.  Corporate Stock................................................                   - 0 -
6.  Trust Company  Premises,  Furniture,  Fixtures and Other
    Assets Representing Trust Company Premises.....................                     226
7.  Leases and Lease Financing Receivables.........................                   - 0 -
8.  Accounts Receivable............................................                   3,542
9.  Other Assets...................................................
        (Itemize amounts greater than 15% of Line 9)

          Goodwill and Intangibles.........................90,321

                                                                                     90,392
10.     TOTAL ASSETS.............................................                    97,434




                                                                     Page 1 of 3




                         OFFICE OF BANKS AND REAL ESTATE
                       BUREAU OF BANKS AND TRUST COMPANIES

                        CONSOLIDATED REPORT OF CONDITION
                                       OF

                            BNY MIDWEST TRUST COMPANY
                           209 WEST JACKSON BOULEVARD
                                    SUITE 700
                             CHICAGO, ILLINOIS 60606


                                  LIABILITIES                                    THOUSANDS OF DOLLARS
                                  -----------                                    --------------------
                                                                             
11.  Accounts Payable...............................................                      - 0 -
12.  Taxes Payable..................................................                      - 0 -
13.  Other Liabilities for Borrowed Money...........................                      25,425
14.  Other Liabilities..............................................
        (Itemize amounts greater than 15% of Line 14)

                Reserve for Taxes.................................2,668
                Deferred Income.....................................879
                Accrued Expenses....................................782

                                                                                         4,429
15.     TOTAL LIABILITIES                                                               29,863
                                 EQUITY CAPITAL
16.  Preferred Stock................................................                      - 0 -
17.  Common Stock...................................................                       2,000
18.  Surplus........................................................                      62,130
19.  Reserve for Operating Expenses.................................                      - 0 -
20.  Retained Earnings (Loss).......................................                       3,441
21.  TOTAL EQUITY CAPITAL...........................................                      67,571
22.  TOTAL LIABILITIES AND EQUITY CAPITAL...........................                      97,434







I,  ROBERT L. DE PAOLA, VICE PRESIDENT
   -----------------------------------------------------------------------------
              (Name and Title of Officer Authorized to Sign Report)

of BNY Midwest Trust Company certify that the information contained in this
statement is accurate to the best of my knowledge and belief. I understand that
submission of false information with the intention to deceive the Commissioner
or his Administrative officers is a felony.

                                ROBERT L. DEPAOLA
                ------------------------------------------------
                (Signature of Officer Authorized to Sign Report)

Sworn to and subscribed before me is 27TH day of APRIL, 2001
                                     ----        -----------
My Commission expires MAY 15, 2001.
                      ------------
                                       JOSEPH A. GIACOBINO, Notary Public

(Notary Seal)



Person to whom Supervisory Staff should direct questions concerning this report.

    Christine Anderson                        (212) 437-5521
-------------------------------  -----------------------------------------------
           Name                        Telephone Number (Extension)