US Cellular 2008 Annual Report Download - page 89

Indemnification. We have agreed to indemnify TDS against certain losses, claims, damages or
liabilities, including those arising out of: (1) the conduct of our business (except where the loss, claim,
damage or liability arises principally from TDS’ gross negligence or willful misconduct); and (2) any
inaccurate representation or breach of warranty under the Intercompany Agreement. TDS will similarly
indemnify us with respect to: (1) the conduct by TDS of its non-cellular businesses before July 1, 1987
(except where the loss, claim, damage or liability arises principally from U.S. Cellular’s gross negligence
or willful misconduct); and (2) any inaccurate representation or breach of warranty under the
Intercompany Agreement.
Disposal of Company Securities. TDS will not dispose of any of our securities held by it if such
disposition would result in the loss of any license or other authorization held by us and such loss would
have a material adverse effect on us.
Transfer of Assets. Without the prior written consent of TDS, we may not transfer (by sale, merger
or otherwise) more than 15% of our consolidated assets unless the transferee agrees to become subject
to the Intercompany Agreement.
Registration Rights Agreement; Other Sales of Common Shares
Under a registration rights agreement, we have agreed, upon the request of TDS, to file one or more
registration statements under the Securities Act of 1933 or take other appropriate action under the laws
of foreign jurisdictions in order to permit TDS to offer and sell, domestically or abroad, any of our debt or
equity securities that TDS may hold at any time. TDS will pay all costs relating thereto and any
underwriting discounts and commissions relating to any such offering, except that we will pay the fees of
any counsel, accountants, trustees, transfer agents or other agents retained by U.S. Cellular in
connection therewith. TDS has the right to select the counsel we retain to assist it to fulfill any of its
obligations under the registration rights agreement.
There is no limitation on the number or frequency of the occasions on which TDS may exercise its
registration rights, except that we will not be required to comply with any registration request unless, in
the case of a class of equity securities, the request involves at least the lesser of 1,000,000 shares or 1%
of the total number of shares of such class then outstanding, or, in the case of a class of debt securities,
the principal amount of debt securities covered by the request is at least $5,000,000. We have also
granted TDS the right to include its securities in certain registration statements covering offerings by us
and will pay all costs of such offerings other than incremental costs attributable to the inclusion of our
securities owned by TDS in such registration statements.
We will indemnify TDS and its officers, directors and controlling persons against certain liabilities
arising under the laws of any country in respect of any registration or other offering covered by the
registration rights agreement. We have the right to require TDS to delay any exercise by TDS of its rights
to require registration and other actions for a period of up to 90 days if, in our judgment, any offering by
us then being conducted or about to be conducted would be materially adversely affected. TDS has
further agreed that it will not include any of our securities in any registration statement filed by us which,
in the judgment of the managing underwriters, would materially adversely affect any offering by us. The
rights of TDS under the registration rights agreement are transferable to non-affiliates of TDS.
Insurance Cost Sharing Agreement
Pursuant to an insurance cost sharing agreement, we and our officers, directors and employees are
afforded coverage under certain insurance policies purchased by TDS. A portion of the premiums
payable under each such policy is allocated by TDS to us on the same basis as premiums were
allocated before the insurance cost sharing agreement was entered into, if the policies are the same as
or similar to the policies in effect before the insurance cost sharing agreement was entered into, or on
such other reasonable basis as TDS may select from time to time. If TDS decides to change the
allocation of premiums at any time, TDS will consult with us before the change is made, but the decision
as to whether to make the change will be in the reasonable discretion of TDS. We believe that the
amounts payable by us under the insurance cost sharing agreement are generally more favorable than
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