Exhibit 4.1


 


FOURTH SUPPLEMENTAL INDENTURE


 


This FOURTH SUPPLEMENTAL INDENTURE, dated as of November 16,
2010 (the “Supplemental Indenture”), is entered into by and among Telephone and
Data Systems, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (the “Company”), and The Bank of New York Mellon
Trust Company, N.A. (formerly known as The Bank of New York Trust Company,
N.A., as successor to BNY Midwest Trust Company), a  national banking association, as trustee (the
“Trustee”).


 


W I T N E S S E T H:


 


WHEREAS, the Company and the Trustee are parties to an
Indenture, dated as of November 1, 2001 (the “Indenture”), relating to the
issuance from time to time by the Company of its Securities on terms to be
specified at the time of issuance;


 


WHEREAS, Section 9.01(e) of the Indenture
provides that a supplemental indenture may be entered into by the Company and
the Trustee, without the consent of any holders of Securities, to establish the
form or terms of Securities of any series as permitted by Section 2.01 of
the Indenture;


 


WHEREAS, pursuant to Section 9.01(e) of the
Indenture, this Supplemental Indenture does not require the consent of any
holders of Securities;


 


WHEREAS, the Company desires to enter into this
Supplemental Indenture to provide for the establishment of a series of
Securities to be known as the 6.875% Senior Notes due 2059 (the “Notes”), the
form, substance, terms, provisions and conditions of which shall be set forth
in the Indenture and this Supplemental Indenture; and


 


WHEREAS, all acts and requirements necessary to make
this Supplemental Indenture a valid and legally binding agreement of the
Company and the Trustee, and a valid and legally binding amendment of and
supplement to the Indenture, have been done.


 


NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE
WITNESSETH:


 


For and in consideration of the premises and the
issuance of the Notes provided for herein, the Company and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective
holders of the Notes as follows:


 


ARTICLE ONE


 


RELATION TO INDENTURE; DEFINITIONS; RULES OF
CONSTRUCTION


 


SECTION 1.1 
Relation to Indenture. 
This Supplemental Indenture constitutes an integral part of the
Indenture.


 

















 


SECTION 1.2 
Definitions.  For all
purposes of this Supplemental Indenture, the following terms shall have the
respective meanings set forth in this Section 1.2.


 


“Assets” means the gross dollar amount of assets, as
defined by generally accepted accounting principles, less accumulated
depreciation and amortization.


 


“Capitalized Rent” means the present value (discounted
semi-annually at a discount rate equal to the weighted average rate of interest
borne by the Securities then Outstanding) of the total net amount of rent
payable for the remaining term of any lease of property by the Company
(including any period for which any lease has been extended); provided, however,
that no such rental obligation shall be deemed to be Capitalized Rent unless
the lease resulted from a Sale and Leaseback Transaction.  The total net amount of rent payable under
any lease for any period shall be the total amount of the rent payable by the
lessee with respect to such period but shall not include amounts required to be
paid on account of maintenance and repairs, insurance, taxes assessments, water
rates, sewer rates and similar charges.


 


“Capital Stock” means and includes any and all shares,
interests, participations or other equivalents (however designated) of
ownership in a corporation or other Person.


 


“Consolidated Assets” means the Assets of the Company
and its Subsidiaries determined on a consolidated basis as of the end of the
Company’s then most recently reported fiscal year or quarter, as the case may
be, including minority interests in Subsidiaries.


 


“Control” means ownership of voting power sufficient
to elect a majority of the directors or other members of the governing body of
any Person.


 


“Debt” means, with respect to a Person, all
obligations of such Person for borrowed money and all such obligations of any
other Person for borrowed money guaranteed by such Person.


 


“Depositary” 
means,  with respect to the Notes,
The Depository Trust Company,  New York,
New York, another clearing agency, or any successor  registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, 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 to the Indenture.


 


“Funded Debt” means any Debt maturing by its terms
more than one year from its date of issuance (notwithstanding that any portion
of such Debt is included in current liabilities).


 


“Lien” means any mortgage, pledge, security interest,
lien, charge or other encumbrance.


 


“property” means any directly-held interest of a
Person in any kind of property or asset whether real, personal or mixed and
whether tangible or intangible, and includes capital stock or other ownership
interests or participations in or indebtedness of  a subsidiary or other Person.


 


“Sale and Leaseback Transaction” means any arrangement
with any Person other than a Tax Consolidated Subsidiary providing for the
leasing (as lessee) by the Company of any property (except for temporary leases
for a term, including any renewal thereof, of not more than 


 


2

















 


three years (providing that any such temporary lease
may be for a term of up to five years if (a) the Board of Directors of the
Company reasonably finds such term to be in the best interest of the Company
and (b) the primary purpose of the transaction (of which such lease is
part) is not to provide funds to or financing for the Company)), which property
has been or is to be sold or transferred by the Company (i) to any
subsidiary of the Company in contemplation of or in connection with such
arrangement or (ii) to such other Person.


 


“Secured Debt” means Debt of the Company secured by
any Lien on property (including Capital Stock or indebtedness of subsidiaries
of the Company) owned by the Company.


 


“Subsidiary” or “subsidiary” means a Person which is
consolidated with TDS in accordance with generally accepted accounting
principles.


 


“Tax Consolidated Subsidiary” means a subsidiary of
the Company in respect of which, at the time a Sale and Leaseback Transaction
is entered into by the Company, the Company would be entitled to file a
consolidated federal income tax return.


 


“USCC” means United States Cellular Corporation.


 


SECTION 1.3 
Rules of Construction.  
For all purposes of this Supplemental Indenture:


 


(a)           capitalized
terms used herein without definition shall have the meanings specified in the
Indenture;


 


(b)           all
references herein to Articles, Sections and Exhibits, unless otherwise
specified, refer to the corresponding Articles, Sections and Exhibits of this
Supplemental Indenture;


 


(c)           the
terms “herein,” “hereof,” “hereunder” and other words of similar import refer
to this Supplemental Indenture; and


 


(d)           in
the event of a conflict with the definition of terms in the Indenture, the definitions
in this Supplemental Indenture shall control.


 


ARTICLE TWO


 


THE SECURITIES


 


There is hereby established a series of Securities
pursuant to the Indenture with the following terms:


 


SECTION 2.1 
Title of the Securities. 
The series of Securities shall be designated the 6.875% Senior Notes due
2059.


 


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SECTION 2.2  Limitation on Aggregate Principal Amount.  The Notes will be initially issued in an
aggregate principal amount of up to $230,000,000 (except for Notes
authenticated and delivered upon registration of transfer of, in exchange for
or in lieu of other Notes).  The Company
may, at its option, at any time and without the consent of the then existing
holders of the Notes, issue additional Notes in one or more transactions after
the date of the initial issuance of the Notes with terms (other than the
issuance date, first interest payment date and issue price) identical to the
Notes initially issued. Any additional Notes issued will be deemed to be part
of the same series as the Notes initially issued and holders of any such
additional Notes shall have the right to vote with holders of all other
previously issued Notes. No additional Notes may be issued if an Event of
Default under the Indenture has occurred and is continuing with respect to the
Notes.


 


SECTION 2.3  Form and Dating.


 


(a)           General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A
hereto.  The Notes may have notations,
legends or endorsements required by law, stock exchange rule or
usage.  Each Note shall be dated the date
of its authentication.  The Notes shall
be in denominations of $25.00 and integral multiples thereof.


 


The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Supplemental
Indenture, and the Company and the Trustee, by their execution and delivery of
this Supplemental Indenture, expressly agree to such terms and provisions and
to be bound thereby.  However, to the
extent any provision of any Notes conflicts with the express provisions of this
Supplemental Indenture, the provisions of this Supplemental Indenture shall
govern and be controlling.


 


(b)           Book-Entry
Provisions.  The Notes shall be
issued initially in global form and the Company hereby designates The
Depository Trust Company as the initial Depositary for the Global
Securities.  Except as provided in Section 2.11
of the Indenture, owners of beneficial interests in Global Securities will not
be entitled to receive physical delivery of certificated Notes.


 


SECTION 2.4 
Optional Redemption.  The
Notes may be redeemed at the option of the Company, in whole or in part, at any
time on and after November 15, 2015 at a redemption price equal to 100% of
the principal amount of the Notes being redeemed on the redemption date, plus
accrued and unpaid interest thereon to the redemption date.  The Company shall mail notice of any
redemption at least 30 days but not more than 60 days before the redemption
date to each registered holder of the Notes to be redeemed. Once notice of
redemption is mailed, the Notes called for redemption will become due and
payable on the redemption date and at the applicable redemption price, plus
accrued and unpaid interest to the redemption date.


 


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ARTICLE  THREE


 


ADDITIONAL COVENANTS OF THE COMPANY


 


SECTION 3.1 
Limitations on Secured Debt. 
So long as any of the Notes remain Outstanding, the Company will not
create or incur any Secured Debt without in any such case effectively providing
concurrently with the creation or incurrence of any such Secured Debt that the
Notes then Outstanding (together with, if the Company shall so determine, any
other Debt of or guaranteed by the Company ranking equally with the Notes and
then existing or thereafter created) shall be secured equally and ratably with
(or, at the option of the Company, prior to) such Secured Debt, unless
immediately after the incurrence of such Secured Debt (and after giving effect to
the application of the proceeds, if any, therefrom), the aggregate principal
amount of all Secured Debt, together with the aggregate amount of Capitalized
Rent in respect of Sale and Leaseback Transactions (other than Sale and
Leaseback Transactions described in clauses (a) to (g), inclusive, of Section 3.2),
would not exceed 20% of the Consolidated Assets; provided, however,
that the foregoing restrictions shall not apply to, and there shall be excluded
in computing Secured Debt for the purpose of such restrictions, Secured Debt
secured by:


 


(a)           Liens
on property existing at the time of acquisition of such property by the
Company, or Liens to secure the payment of all or any part of the purchase
price of property acquired or constructed by the Company (including any
improvements to existing property) created at the time of or within 270 days
following the acquisition of such property by the Company, or Liens to secure
any Secured Debt incurred by the Company prior to, at the time of or within 270
days following the acquisition of such property, which Secured Debt is incurred
for the purpose of financing all or any part of the purchase price thereof; provided,
however, that in the case of any such acquisition, the Lien shall not
apply to any property theretofore owned by the Company (including property
transferred by the Company to any subsidiary of the Company in contemplation of
or in connection with the creation of such Lien) or to any property of the
Company other than the property so acquired (other than, in the case of
construction or improvement, any theretofore unimproved real property or
portion thereof on which the property so constructed, or improvement, is
located);


 


(b)           Liens
on property of a person (i) existing at the time such Person is merged into
or consolidated with the Company or at the time of a sale, lease or other
disposition of the properties of a Person as an entirety or substantially as an
entirety to the Company, (ii) resulting from such merger, consolidation,
sale, lease or disposition by virtue of any Lien on property granted by the
Company prior to and unrelated to such merger, consolidation, sale, lease or
disposition (and not in contemplation thereof or in connection therewith) which
applies to after-acquired property of the Company or (iii) resulting from
such merger, consolidation, sale, lease or disposition pursuant to a Lien or
contractual provision granted or entered into by such Person prior to such
merger, consolidation, sale, lease or disposition (and not at the request of the
Company); provided, however, that any such Lien referred to in
clause (i) shall not apply to any property of the Company other than the
property subject thereto, at the time such Person or properties were acquired
and any such Lien referred to in clause (ii) or (iii) shall not apply
to any property of the Company other than the property so acquired;


 


5

















 


(c)           Liens
existing on the date of this Supplemental Indenture;


 


(d)           Liens
in favor of a government or governmental entity to secure partial progress,
advance or other payments, or other obligations, pursuant to any contract or
statute or to secure any Debt incurred for the purpose of financing all or any
part of the cost of acquiring, constructing or improving the property subject
to such Liens (including, without limitation, Liens incurred in connection with
pollution control, industrial revenue, private activity bond or similar
financing);


 


(e)           Liens
arising by reason of deposits with, or the giving of any form of security to,
any governmental agency or any body created or approved by law or governmental
regulation, which Lien is required by law or governmental regulation as a
condition to the transaction of any business or the exercise of any privilege,
franchise, license or permit;


 


(f)            Liens
for taxes, assessments or governmental charges or levies not yet delinquent or
governmental charges or levies already delinquent, the validity of which charge
or levy is being contested in good faith and for which any reserves required in
accordance with generally accepted accounting principles have been established;


 


(g)           Liens
(including judgment liens) arising in connection with legal proceedings so long
as such proceedings are being contested in good faith and, in the case of
judgment liens, execution thereon is stayed and for which any reserves required
in accordance with generally accepted accounting principles have been
established;


 


(h)           Liens
on any equity interests owned by the Company or by any of its subsidiaries in
any person or persons that are not directly, or indirectly through one or more
intermediaries, Controlled by the Company or by any of its subsidiaries;


 


(i)            Liens
upon or in any property or assets now owned or from time to time hereafter
acquired by USCC or any of its subsidiaries related in any way to the ownership
by USCC or by any of its subsidiaries of wireless telecommunications towers,
including, but not limited to, tower structures, land on which towers are
located, other real estate associated with such towers, leases for towers or
for tower sites, subleases, licenses, collocation arrangements, easements and
all other real property and other tangible or intangible assets related
thereto;


 


(j)            Liens
on any property used primarily as or for any of the following: data centers,
colocation, managed services, hosted services or cloud services.;


 


(k)           Liens
securing indebtedness of the Company or of any of its Subsidiaries to the Rural
Electrification Administration, Rural Utility Service, Rural Telephone Bank or
the Rural Telephone Finance Cooperative or successors thereto;


 


(l)            Liens
incurred and deposits made in the ordinary course of business to secure surety
and appeal bonds, leases, return-on-money bonds and other similar obligations,
exclusive of obligations for the payment of borrowed money; and


 


6

















 


(m)          any
extension, renewal or replacement (or successive extensions, renewals or
replacements) in whole or in part of any Lien referred to in the foregoing
clauses (a) to (l), inclusive; provided, however, that the
principal amount of Secured Debt secured thereby shall not exceed the principal
amount of Secured Debt secured thereby at the time of such extension, renewal
or replacement, and that such extension, renewal or replacement shall be
limited to all or a part of the property which secured the Lien so extended,
renewed or replaced (plus improvements to such property).


 


3.2  Limitation
on Sale and Leaseback.  The Company
will not enter into any Sale and Leaseback Transaction unless immediately
thereafter (and after giving effect to the application of the proceeds, if any,
therefrom), the aggregate amount of Capitalized Rent in respect of Sale and
Leaseback Transactions, together with the aggregate principal amount of all
Secured Debt (other than Secured Debt described in clauses (a) to (m),
inclusive, of Section 3.1), would not exceed 20% of Consolidated Assets; provided,
however, that the foregoing restrictions shall not apply to, and there
shall be excluded in computing the aggregate amount of Capitalized Rent for the
purpose of such restrictions, the following Sale and Leaseback Transactions:


 


(a)           Sale
and Leaseback Transaction entered into to finance the payment of all or any
part of the purchase price of property acquired or constructed by the Company
(including any improvements to existing property) or entered into prior to, at
the time of or within 270 days after the acquisition or construction of such
property, which Sale and Leaseback Transaction is entered into for the purpose
of financing all or part of the purchase or construction price thereof; provided,
however, that in the case of any such acquisition, such Sale and
Leaseback Transaction shall not involve any property transferred by the Company
to a subsidiary of the Company in contemplation of or in connection with such
Sale and Leaseback Transaction or involve any property of the Company other
than the property so acquired (other than, in the case of construction or
improvement, any theretofore unimproved real property or portion thereof on
which the property so constructed, or the improvement, is located);


 


(b)           Sale
and Leaseback Transaction involving property of a Person existing at the time
such Person is merged into or consolidated with the Company or at the time of a
sale, lease or other disposition of the properties of a Person as an entirety
or substantially as an entirety to the Company;


 


(c)           Sale
and Leaseback Transaction in which the lessor is a government or governmental
entity and which Sale and Leaseback Transaction is entered into to secure
partial progress, advance or other payments, or other obligations, pursuant to
any contract or statute or to secure any Debt incurred for the purpose of
financing all or any part of the cost of constructing or improving the property
subject to such Sale and Leaseback Transaction (including, without limitation,
Sale and Leaseback Transactions incurred in connection with pollution control,
industrial revenue, private activity bond or similar financing);


 


(d)           Sale
and Leaseback Transaction involving any property or assets now owned or from
time to time hereafter acquired by USCC or any of its subsidiaries related in
any way to the ownership by USCC or by any of its subsidiaries of wireless 


 


7

















 


telecommunications towers, including, but not limited
to, tower structures, land on which towers are located, other real estate
associated with such towers, leases for towers or for tower sites, subleases,
licenses, collocation arrangements, easements and all other real property and
other tangible or intangible assets related thereto;


 


(e)           Sale
and Leaseback Transactions involving any property used primarily as or for any
of the following: data centers, colocation, managed services, hosted services
or cloud services;


 


(f)            Sale
and Leaseback Transaction the net proceeds of which are at least equal to the
fair value (as determined by the Board of Directors of the Company) of the
property leased pursuant to such Sale and Leaseback Transaction, so long as
within 270 days of the effective date of such Sale and Leaseback Transaction,
the Company applies (or irrevocably commits to an escrow account for the
purpose or purposes hereinafter mentioned) an amount equal to the net proceeds
of such Sale and Leaseback Transaction to either (x) the purchase of other
property having a fair value at least equal to the fair value of the property
leased in such Sale and Leaseback Transaction and having a similar utility and
function, or (y) the retirement or repayment (other than any mandatory
retirement or repayment at maturity) of (i) the Notes, (ii) other
Funded Debt of the Company which ranks prior to or in a parity with the Notes
or (iii) indebtedness of any subsidiary of the Company maturing by its
terms more than one year from its date of issuance (notwithstanding that any
portion of such indebtedness is included in current liabilities) or preferred
stock of any subsidiary of the Company (other than any such indebtedness owed
to or preferred stock owned by the Company or any subsidiary of the Company); provided,
however, that in lieu of applying an amount equivalent to all or any
part of such net proceeds to such retirement or repayment (or committing such
an amount to any escrow account for such purpose), the Company may deliver to
the Trustee Outstanding Notes and thereby reduce the amount to be applied
pursuant to (y) of this clause (f) by an amount equivalent to the
aggregate principal amount of the Notes so delivered; and


 


(g)           Sale
and Leaseback Transaction involving the extension, renewal or replacement (or
successive extensions, renewals or replacements) in whole or in part of a lease
pursuant to a Sale and Leaseback Transaction referred to in the foregoing
clauses (a) to (f), inclusive; provided, however, that such
lease extension, renewal or replacement shall be limited to all or any part of
the same property leased under the lease so extended, renewed or replaced (plus
improvements to such property).


 


ARTICLE FOUR


 


ADDITIONAL REMEDIES OF THE TRUSTEE


AND SECURITYHOLDERS ON EVENTS OF DEFAULT


 


SECTION 4.1 
Additional Events of Default. 
In addition to the “Events of Default” provided for in Section 6.01
of the Indenture, the following shall also constitute “Events of Default” with respect
to the Notes as contemplated by Section 6.01(a)(6) of the Indenture:


 


8

















 


(i)  a default occurs under any instrument
(including the Indenture) under which there is at the time outstanding, or by
which there may be secured or evidenced, any indebtedness of the Company for
money borrowed by the Company (other than non-recourse indebtedness) which
results in acceleration (whether by declaration or automatically) of, or the
non payment at maturity (after giving effect to any applicable grace period)
of, such indebtedness in an aggregate amount exceeding 2% of Consolidated
Assets, in which case the Company shall immediately give notice to the Trustee
of such acceleration or non-payment and (ii) there shall have been a
failure to cure such default or to discharge all such defaulted indebtedness
within ten days after notice thereof to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 33% in principal amount of
the Notes then Outstanding (excluding, if such defaulted indebtedness includes
the Notes, such Notes) and such acceleration shall not be rescinded or
annulled; provided, however, that it shall not constitute an
Event of Default under the Indenture as long as the Company is contesting any
such default or acceleration in good faith and by appropriate proceedings.


 


ARTICLE FIVE


 


MISCELLANEOUS PROVISIONS


 


SECTION 5.1 
Ratification.  The
Indenture, as supplemented and amended by this Supplemental Indenture, is in
all respects hereby adopted, ratified and confirmed.


 


SECTION 5.2 
Governing Law.  This
Supplemental Indenture shall be governed by, and construed and enforced in
accordance with, the laws of the jurisdiction which govern the Indenture and
its construction.


 


SECTION 5.3 
Counterparts and Method of Execution. This Supplemental Indenture
may be executed in several counterparts, all of which together shall constitute
one agreement binding on all parties hereto, notwithstanding that all parties
have not signed the same counterpart.


 


SECTION 5.4 
Section Titles.  Section titles
are for descriptive purposes only and shall not control or alter the meaning of
this Supplemental Indenture as set forth in the text.


 


SECTION 5.5 
Trustee.  The Trustee makes
no representations and is not responsible for the sufficiency, validity or
legality of this Supplemental Indenture. 
The statements herein are deemed to be those of the Company and not of
the Trustee.


 


*              *              *


 


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


 


	
   

  	
  TELEPHONE AND DATA SYSTEMS, INC.,

  
	
   

  	
  a Delaware corporation  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LeRoy T. Carlson, Jr.

  
	
   

  	
  Name:

  	
  LeRoy T. Carlson, Jr.

  
	
   

  	
  Title: 

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth R. Meyers

  
	
   

  	
  Name:

  	
  Kenneth R. Meyers

  
	
   

  	
  Title:

  	
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as
  Trustee, a national banking association  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mary
  Callahan  

  
	
   

  	
  Name:

  	
   Mary Callahan  

  
	
   

  	
  Title: 

  	
  Assistant Vice President

  
	
   

  	
   

  
								



 


SIGNATURE PAGE TO FOURTH


SUPPLEMENTAL INDENTURE


 
















 


EXHIBIT A TO FOURTH SUPPLEMENTAL INDENTURE


 


Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein. 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 Depositary or to a successor Depositary or to a nominee of such
successor Depositary.


 


	
  No.             

  	
   

  	
  CUSIP: 879433 845

  



ISIN: US8794338454


 


TELEPHONE
AND DATA SYSTEMS, INC.


 


6.875%
SENIOR NOTES DUE 2059


 


	
  Principal Amount:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Stated Maturity Date:

  	
   

  	
  November 15, 2059

  
	
   

  	
   

  	
   

  
	
  Original Issue Date:

  	
   

  	
  November 23, 2010

  
	
   

  	
   

  	
   

  
	
  Interest Rate:

  	
   

  	
  6.875% per annum

  



 


TELEPHONE AND DATA SYSTEMS, INC., a corporation
duly organized and existing under the laws of the State of Delaware (herein
referred to as the “Company,” which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the Principal
Amount specified above on the Stated Maturity Date specified above, and to pay
interest on said Principal Amount from November 23, 2010 at the Interest
Rate specified above on February 15, 2011 and thereafter quarterly on May 15,
August 15, November 15 and February 15 of each year (each an “Interest
Payment Date”), until the Principal Amount will have been paid or duly provided
for.


 


On an Interest Payment Date, interest will be paid to
the persons in whose names the Notes (as defined below) were registered as of
the Record Date (the “Record Date”). 
With respect to any Interest Payment Date, while the Notes remain in the
form of a Global Security, the Record Date will be one Business Day prior to
the relevant Interest Payment Date.


 

















 


The amount of interest payable for any period will be
computed on the basis of twelve 30-day months and a 360-day year. The amount of
interest payable for any period shorter than a full quarterly interest period
will be computed on the basis of the number of days elapsed in a 90-day quarter
of three 30-day months. If any Interest Payment Date falls on a Saturday,
Sunday, legal holiday or a day on which banking institutions in the City of New
York are authorized by law to close, then payment of interest will be made on
the next succeeding Business Day and no additional interest will accrue because
of the delayed payment, except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, with the same force and effect as if made on such date.


 


Payment of the principal of this Note and the interest
thereon will be made at the office or agency of the Company in the Borough of
Manhattan, City and State of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.


 


The Notes are issuable only in registered form without
coupons in denominations of $25.00 and any integral multiple thereof.


 


The Notes will be redeemable at the option of the
Company, in whole or in part, at any time on and after November 15, 2015,
upon not less than 30 nor more than 60 days notice, at a redemption price equal
to 100% of the principal amount redeemed plus accrued and unpaid interest to
the redemption date.


 


In case of any partial redemption, selection of the
Notes for redemption will be made by the Trustee on a pro rata basis, by lot or
by such other method as the Trustee in its sole discretion shall deem to be
fair and appropriate, although no Note of $25.00 in principal amount at
maturity or less shall be redeemed in part. 
If any Note is to be redeemed in part only, the notice of redemption
relating to such Note shall state the portion of the principal amount thereof
to be redeemed.  A new Note in principal
amount at maturity equal to the unredeemed portion thereof will be issued in
the name of the holder thereof upon cancellation of the original Note.


 


This Note is one of a duly authorized series of
Securities of the Company (herein sometimes referred to as the “Notes”),
issuable in one or more series under and pursuant to an Indenture dated as of November 1,
2001 duly executed and delivered between the Company and The Bank of New York
Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust
Company, N.A., as successor to BNY Midwest Trust Company), as Trustee (herein
referred to as the “Trustee”), and have been designated pursuant to the Fourth
Supplemental Indenture thereto dated November 16, 2010 (such Indenture, as
originally executed and delivered and as thereafter supplemented and amended
being herein after referred to as the “Indenture”).  Reference is made to the Indenture and all
indentures supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Notes.  By
the terms of the Indenture, Securities are issuable in series which may vary as
to amount, date of maturity, rate of interest and in other respects as in the
Indenture provided.  This Note is one of
the series of Securities designated on the face hereof.


 


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Notes may be exchanged upon presentation thereof at
the office or agency of the Company designated for such purpose, for other
Notes 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 the Indenture.  In respect of any Notes so surrendered for
exchange, the Company will execute, the Trustee will authenticate and such
office or agency will deliver in exchange therefor the Note or Notes of the
same series which the Securityholder making the exchange will be entitled to
receive, bearing numbers not contemporaneously outstanding.


 


The Company will 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 “Note Register”) in which,
subject to such reasonable regulations as it may prescribe, the Company will
register the Notes and the transfers of Notes. 
The registrar for the purpose of registering Notes and transfer of Notes
will initially be the Trustee or such other person as may be subsequently
appointed as authorized by Board Resolution or Company Order (the “Note
Registrar”).


 


Upon surrender for transfer of any Note 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 will execute, the Trustee will authenticate and such office or agency
will deliver in the name of the transferee or transferees a new Note or Notes
presented for a like aggregate principal amount.


 


All Notes presented or surrendered for exchange or
registration of transfer will be accompanied (if so required by the Company or
the Note Registrar) by a written instrument or instruments of transfer, in form
satisfactory to the Company or the Note Registrar, duly executed by the
registered holder or by his duly authorized attorney in writing.


 


Except as provided in the Indenture, no service charge
will be assessed for any exchange or registration of transfer of Notes, or
issue of new Notes in case of partial redemption, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge in
relation thereto as provided in the Indenture.


 


The Company will neither be required (i) to
issue, exchange or register the transfer of any Notes 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 Notes and ending at the close of
business on the day of such mailing, nor (ii) to register the transfer of
or exchange any Notes or portions thereof called for redemption.


 


As long as this Note is represented in global form
(the “Global Security”) registered in the name of The Depository Trust Company
or its nominee, except as provided in the Indenture and subject to certain
limitations therein set forth, no Global Security shall be exchangeable or
transferable.


 


So long as any Notes remain outstanding, the Company
agrees to maintain an office or agency with respect to each such series, which
will 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 the 


 


3

















 


Indenture, where (i) Notes may be presented for
payment, (ii) Notes may be presented as for registration of transfer and
exchange, and (iii) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be given or served, such designation to
continue with respect to such office or agency until the Company will, 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.  The Company may also from time to time
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.


 


The Trustee or its agent at its offices in New York,
New York will initially act as Notes Registrar and paying agent for the Notes.


 


The Notes are not subject to any sinking fund.


 


If an Event of Default (as defined in the Indenture)
with respect to the Notes shall occur and be continuing, the principal plus any
accrued interest may be declared due and payable in the manner and with the
effect and subject to the conditions provided in the Indenture.


 


The Indenture contains provisions for defeasance at
any time of the entire indebtedness of this Note upon compliance by the Company
with certain conditions set forth therein.


 


Prior to the due presentment for registration of
transfer of any Notes, the Company, the Trustee, any paying agent and any Note
Registrar may deem and treat the person in whose name such Note will be
registered upon the books of the Company as the absolute owner of such Note
(whether or not such Note will be overdue and notwithstanding any notice of
ownership or writing thereon made by anyone other than the Note Registrar) for
the purpose of receiving payment of or on account of the principal of and
premium, if any, and (subject to the Indenture) interest on such Note and for
all other purposes; and neither the Company nor the Trustee nor any paying
agent nor any Note Registrar will be affected by any notice to the contrary.


 


The Company and the Trustee may execute supplemental
indentures without the consent of any holder of Notes for certain purposes as
specified in the Indenture and with the consent of the holders of not less than
a majority in aggregate principal amount of the Securities for certain other
purposes as specified in the Indenture.


 


No recourse will be had for the payment of the
principal of or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.


 


THIS NOTE WILL BE DEEMED TO BE A CONTRACT UNDER THE
LAWS OF THE STATE OF ILLINOIS, AND FOR ALL PURPOSES WILL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE, EXCEPT AS MAY OTHERWISE BE
REQUIRED BY MANDATORY PROVISIONS OF  LAW.


 


4

















 


All terms used in this Note which are defined in the
Indenture will have the meanings assigned to them in the Indenture.


 


5

















 


This Note will not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon will have been signed by
or on behalf of the Trustee.


 


IN WITNESS WHEREOF, the Company has caused this
Instrument to be executed.


 


	
   

  	
  TELEPHONE AND DATA SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  LeRoy T. Carlson, Jr.

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Kenneth R. Meyers

  
	
   

  	
   

  	
  Executive Vice President and Chief Financial Officer

  



 


TRUSTEE’S CERTIFICATE OF AUTHENTICATION


 


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


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NEW YORK MELLON

  	
   

  
	
  TRUST COMPANY, N.A., as Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
				



 


SIGNATURE PAGE TO 

GLOBAL SECURITY FOR

6.875% SENIOR NOTES DUE 2059

OF TELEPHONE AND DATA SYSTEMS, INC.


 


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ASSIGNMENT FORM


 


To assign this Note, fill in the form below:


 


I or we assign and transfer this Note to 


	
   

  	
   

  	
   

  
	
  Insert assignee’s Social Security or tax I.D. no.

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip
  code)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  and all rights thereunder and irrevocably appoint

  
	
   

  
	
   

  
	
   

  
	
  agent to transfer this Note on the books of the
  Company.  The agent may substitute
  another to act for him.

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice: 
  The signature to this assignment must correspond with the name as it
  appears on the first page of the within Note.

  
						



 


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